Real estate in Montenegro

[Dreamy]

In this country, you can currently buy real estate with cryptocurrency. The choice is huge, from inexpensive studios in resort towns like Budva up to 100k, and estates for 500k and above. How interesting do you think this idea is? Buying real estate there for cryptocurrency for the purpose of short-term seasonal or long-term rental. Prices have not yet increased significantly. When Montenegro joins the European Union, and this will happen sooner or later, prices will go up. Perhaps someone has an apartment there that you are renting through an agency? I would be satisfied with a stable 4% per annum with the prospect of an increase in the property's price.

 

[Wellington]

Nominal Property Prices will appreciate in the EU from debasement of the currency as per following the US, UK etc (west) but loose ~2% pa (back to 2013)... so it depends on whether the rent demand is there or whether will be demand for these properties post joining the EU.

EU membership usually results in a mass increase in costs for goods and services as a alignment occurs, also usually results in migration (Youth to North, Old to South/East) whether it will benefit from that or not needs to be considered.

Also with the more controlling / surveillance the EU is becoming (mix between Soviet Union / USA) it needs to be considered whether the main middle income retirees will be interested in the place opposed to say South America, East / West Africa and SE Asia...

I'd hazard a guess Argentina is the place to invest.

 

[Dreamy]

Sorry, but we do not discuss backward third world countries in this thread. The question was about real estate in Montenegro. Regarding pensioners - funny. Most pensioners from Scandinavia and UK, for example, still prefer to retire in Spain, Portugal, France, French overseas territories and other civilized countries and places, rather than go to a country where the national currency is depreciating, military coups are taking place, or it is ruled by a dictators.

Eastern and Western Africa? Are you laughing? What would it be like to be a walking wallet there, a white sheep among wolves, without access to medicine, without the ability to walk wherever you want in the dark time? No thanks.

Also, I didn't understand actually, why you started offering investments in other countries in a topic that included a question about Montenegro.

 

[John Spectre]

I was in your situation a few years ago and searched properties in various countries including Montenegro with payment via crypto.

My few cents on it:

- In case you need to liquidate crypto asap you could invest there as it is a good place generally.

- In case your primary goal is to have good rental income, I suggest you do good research by yourself and don't believe all the words that real estate agents will tell you. I guess that I know of agencies who propose crypto options as I contacted few of them.

- I suggest you decide if you want to go with short term rental options or long term rental options prior to making a deal, because Montenegro is a small, relatively poor country and demand for long term properties for locals and short term tourists is quite different. And final property is unlikely to be a good option for both types of rental.

- Having in mind the point above there are not so big options to have a good maintenance company to assist you with short term rent. It is much more profitable for them to have their own properties instead of maintaining your apartments for a commission. You simply could end up with a company which will not be interested in the good delivery of your objects and you will not receive the desired income.

Selecting property for the long-term is just simpler here, but harder to get a good big income.

- If you have a big enough budget to invest in high-end properties in Montenegro like a Dukley or Lustica bay it could be a good option as the same family of companies do development, maintenance, rental with guaranteed income. But they are definitely overpriced for this country.

- Important thing if you look to use this property by yourself, do you want to control the rental business or not, where you actually reside, etc.

- If we speak about new or relatively new properties, it is unlikely you will get a big price rise after EU joining. This aspect of property price is already included in what sellers want.

Personally I didn't find property in Montenegro at time of search because market options were limited and I selected other countries. However, I am still considering this country as a good option compared to neighboring Croatia, Albania or Greece.

 

[Dreamy]

Thank you very much for your detailed answer, John Spectre! I agree with you.

- As far as I understand, you think that it is more effective to focus on long-term rentals there for locals or expats, rather than short-term ones for tourists, which can be quite expensive and can cause headaches, correct?

- Regarding the large income, I would be satisfied with 4% after all payments and commission. I don't know if this is a big or not a big income for you.

- Regarding the rise in prices after joining the EU, this is more of a possible bonus, and not my main goal.

Montenegro attracted me because of:

- Normal geographical location where everything is close, climate, sea, quality of products, friendly population, safety, minimal percentage of any migrants, etc.

- Cheap (for now) prices for ordinary apartments in resort towns such as Budva

- Ability to pay with cryptocurrency without any questions asked

But that's why I created a thread on this forum, because I have no idea about the profitability of this property and its liquidity - how difficult it is, say, to sell this property at at least the same price in a year or two

 

[John Spectre]

In case you don't have experience with region\business long term option would be simplier.

This mean that you would need around 7% of net income. I would say it would be hard for any long or short term option. You need very specific property with specific price to reach such income. Don't forget that tourist season in Montenegro is quite small comparing for example to Greek islands or Turkey.

Current problem aka bottleneck of Montenegro not in a question of EU, but in a weak infrastructure of small airports, weak roads etc - it simply can't be suitable by a big number of tourists. It will take a years after joining the EU to expand infrastructure to level of Croatia or similar.

Here you need to decide if you select it for a personal living or to generate income.
Who care about migrants if property will give you 10% pa? And minimal migrants will not solve problem if property will generate only 1% pa. I think for investment property pros\cons should be somehow different.

Personally I didn't go properties Montenegro few years ago because actual prices of desired apartments in Montenegro was bigger than my other options.
But I didn't looked for a cheapest properties. Dealing with old houses in coastal region it's definitelly not what I looking for.

In 2023 you could easily found property to pay with crypto in coastal area of Europe/Mediterrain. Starting from Portugal and Spain in west, ending with Greece, Cyprus, Turkey. Sure with crypto it would be much simplified due deligence.
But actual number of questions/KYC/etc will be depend on specific property\agents\lawyers. Don't think Montenegro is pure leader here.

Generalize all Montenegro in single object are wrong here.
Any country, as well as Montenegro could have a good objects for invest and sell in couple of years, another projects are good for rental, etc. But you need to know local market very well.
In case this destination is popular, why you think that you will be first prior locals if exact object is a hot cake?
Most of cases, if object are long time on the market and any expat are able to buy it, if agent promote it for sale for crypto (btw some agents still think that because of crypto, they could rise price for it), etc - the object is far from ideal.

It's a better to show specific property you are selecting and we could discuss pros and cons of it.

 

[Dreamy]

Okay, a little bit off - what from these countries you think is best for real estate investment?

 

[John Spectre]

I don't think we could have somewhere in the world or from the list above define 'best country' for investing. And any person who will promote some single country just wants to sell it.

Each country has different pros and cons, different local laws, regulations, rules, requirements, mentality of the people, etc. Additionally some countries could have benefits for investors.

For example good short term rental return you could get with coastal regions of Spain, where properties are relatively cheap and rental is high. But you have/would work with cons like squatters, tax regime there, permanent manana, etc.

Nobody will care about KYC and SOF for money in Turkey and you will even be able to get benefits like a residence permit or even a passport. But you have\would work with terrible construction quality and muslim mentality when they see European people opposite, etc.

And we could have long threads discussing any country and real estate market there.

Some universal recommendations I could give you here:
- better to invest in the country of your residence or not far away from your country if possible(if you don't have special requirement to hide your property as far as possible from you\your country).
- your passport and residency matter when dealing with other countries if we speak about authorities, banks, etc. Some countries didn't like other countries and citizens\residents from there.
- think about your business plan for many years in the future. What would be if you would have much more funds and need to invest for 1-5-10 additional properties or another case need to liquidate property fast? Do you need to have a company that will own properties or not?
- spend time on market research and local laws in any country that you consider to invest in. You would never get truth cons about the country or property from the agents as they are willing to sell only.

 

[aragon]

I'm curious why you would want to trade your crypto for real estate, as opposed to just renting real estate or borrowing against your crypto? I can't imagine real estate ever being a better investment than crypto (Bitcoin).

 

[Dreamy]

Diversification and reliability. I somehow believe more in a small apartment in Paris or Berlin, which I will rent out consistently for next 30 years than some records in the blockchain on a flash drive, or worse, on some “exchange” like Binance, which could disappear tomorrow. Houses in France for example have been standing for hundreds of years, are rented out, and bring a normal, stable income. But cryptocurrency still exists and remains a high-risk tool for quick enrichment. I can't predict what will happen to cryptocurrency in 10 years. But I can predict that an apartment in New York or a house somewhere in Italy will always be well rented out and generate a stable income. Let it be 3-4% per annum, but stable.

 

[uranium]

I get your point. You want a portfolio of crypto real estate stocks..
I would avoid those exotic real estate markets because I am not a local and I have no idea about the people the mindset, law, what if tenants don't pay, can I kick them out ?
How long will it take to kick them out by court order ?
What about costs and repairs?
If you really want real estate investment, buy a studio in Paris better than a villa in Turkey. Because in real estate there is one rule: location, location, location
I prefer to invest in some low cost etf because that is investment in the whole economy and to avoid having to manage some property. Maybe you can pay agency to rent it for you but still low yield, i believe with etfs you get better yearly return and you can sell it anytime with one click
You may say but real estate is safer, I say if economy go bust then we all do and so does the tenant!

 

[jafo]

I think it is imperative for any intellectual discussion that the interlocutors are aware of the true definition and correct use of the terminology they employ. So, for those who are unfamiliar with Cold War terminology, here's a terse introduction.

Awesome educational video source:
During the Cold War, the Three-World Model was developed to describe a country's alignment with either capitalism or communism. First-world countries sided with the United States and their allies in the North Atlantic Treaty Organization (NATO) and supported capitalism. Second-world countries were those who aligned themselves with the Soviet Union and used communism as their preferred method of government. If a country sided with neither party, then it became classified as a third-world country. Those named as 3rd-world countries typically did not have a government to be able to choose a side and were generally underdeveloped compared to the major world powers.

(1) The countries in BLUE are first-world countries (that's what they called auto-denominated themselves)

(2) The countries in RED are second-world countries (That's what # 1 labeled them as)

(3) The countries in GREEN are third-world countries (that's what #1 labeled them as since they were considered spineless for NOT siding with #1, and because they really had no power and they also dissed #2, they got sh@t on by #1 and put in last place, i.e 3rd place)

Class dismissed 😎

 

[JimBeam]

Montenegro is attractive as they will become the member of EU sooner than later. But that alone won't solve the problems they have with infrastructure (in the summer you need 1 hour to for 10km), depopulation will increase, lack of workforce in hospitality will increase, they are trying to position them selves as a luxury destination and in reality they are not.

I doubt that the real estate prices will rise after they join the EU as for most of EU they are not that attractive destination. They are simply not easy to get there. Drive from Munich to Budva is about 15 hours while from Munich to Croatian coastline is 6-7 hours (and most of Germans will drive that in their BMW's and Mercedes cars without an issue). Sure you could fly - but a lot of Germans just want to drive their new german cars and also take their bikes with them etc. Put simply, montenegro is at least 10 hour drive from the rest of EU that has money and that they want to attract and the road in between is not that good (mountains, pot holes, borders with hours of waiting etc).

I don't find long term rentals safer as if the tenant may simply not pay the rent and bills (as he knows you're a foreigner so he can mess with you) and there isn't much you can do. How long does it take to get him evicted? One year? Two years? How efficient are their courts and police in these cases? That simply doesn't happen in tourist rentals. Yes, they are high maintenance and more difficult to deal with but if someone came for a vacation - he will pay for it in advance and will leave as he got his place back home and he needs to get back to work.

How you could borrow against your crypto?
That can also be risky if Bitcoin goes down 80% or so you can get liquidated.
Also the interest rate you will be paying could vary a lot.

Have you considered buying a property in Dubai? They are also crypto friendly. Foreigners could easily buy real estate. Rents are usually paid the full year in advance (so less risk for you) and you could easily get double than these 3-4% you're looking for. Prices are quite high at this moment (might not be the best time to buy right now) but it's worth looking into.

Also, don't forget the taxes.
Make sure you understand how they will treat the income you generate from renting the property.

 

[Dreamy]

Thanks for all replies guys!

 

[Liam13]

What did you end up deciding out of curiosity? I am also considering real estate with crypto, and I saw Portugal can offer that as well. Did you look at Porto or Lisbon. I agree with the above as for my first investments, after literally visiting more than 20 flats across many Asian markets, I went back to "boring" Paris/London.
PS: Some developers in Cyprus also accept crypto, but I am skipping anything "south of the Mediterranean" as I believe the climate outlook is very negative, and I am buying for the next 20-30 years...

 

[hatsuri]

are you sure you can buy property with crypto in Portugal and Spain?

 

[JosephLL]

Yes. These are just rumours. Fishermen stories...

 

[clemens]

You are from Portugal to confirm this ?

 

[JosephLL]

No. I'm just sayin' the burden if proof should ve on those claiming such things. Haven't read here anything more substantial then here say.

 

[John Spectre]

Real estate sectors as well as banking sectors are quite dirty markets.
Despite all AML, KYC and another things which must show at facade that they are clean. And those people do much much worse things than selling real estate for crypto 😉

It's a only matter of meet right people in that country who will know workarounds and serve for this kind of transaction for you personally.
And note that you do not resident of country, they don't know you and for sure don't want to get a problems because of you, so one of tasks to convince that you are safe to work.
For sure you will not get in SPA(in most cases) information that transaction are based in crypto.
Contract should follow all local laws and regulations.
Thus, the real payment of cryptocurrency for real estate will be hidden behind an agreement with payment in cash, bank payment from a 3rd party, sale of the company owning the real estate, etc. But in fact you will pay crypto and get ownership in one or another way for the property.