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Montenegro's coastal cities deliver varying rental returns ranging from 4.6% to 7% gross yields as of September 2025. Podgorica leads with stable returns around 6.4%, while coastal destinations like Budva, Kotor, and Tivat offer higher seasonal income but increased volatility from tourism fluctuations.
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Kotor delivers the highest rental yields at 6-7% with premium Old Town properties reaching 10%, while Tivat shows lower yields at 4.64% due to premium pricing but strong luxury short-term rental potential.
Short-term rental income peaks dramatically in summer months, with top Budva properties earning €2,000+ monthly in August but dropping to €490 off-season, making coastal investments highly seasonal.
| City | Average Rental Yield | Property Price Range (€/m²) | Peak Monthly Airbnb Revenue | Long-term Rent (1-bed) |
|---|---|---|---|---|
| Podgorica | 6.39% | €1,700-€2,000 | €435 | €250-€400 |
| Budva | 5.85% | €2,700-€5,000 | €1,850 | €400-€600 |
| Kotor | 6-7% | €2,250-€3,900 | €1,440 | €400-€600 |
| Tivat | 4.64% | €3,500-€5,700 | €1,670 | €400-€600 |
What are the current rental yields in Podgorica, Budva, Kotor, and Tivat?
Podgorica leads Montenegro rental yields with an average gross return of 6.39% for apartments as of September 2025.
Kotor follows closely with rental yields ranging between 6-7%, while premium Old Town and waterfront properties can achieve up to 10% returns for well-positioned investments.
Budva delivers average yields of 5.85%, typically ranging from 5-7% depending on property type and precise location within the city.
Tivat shows the lowest average yields at 4.64%, primarily due to higher purchase prices in this luxury-focused coastal destination.
Studios in Podgorica can reach yields up to 6.9%, making them particularly attractive for investors seeking steady returns without seasonal volatility.
How much do properties cost to buy in each Montenegro city?
Property prices vary significantly across Montenegro's main cities, with coastal locations commanding premium prices over the capital.
| City | Apartments (€/m²) | Houses/Villas (€/m²) | Entry-level 1-bed |
|---|---|---|---|
| Podgorica | €1,700-€2,000 | €1,500-€3,000 | €85,000 |
| Budva | €2,700-€5,000 | €3,500-€7,000+ | €100,000 |
| Kotor | €2,250-€3,900 | €4,000-€7,000 | €110,000 |
| Tivat | €3,500-€5,700 | €4,800-€12,000+ | €150,000 |
Kotor Old Town and waterfront properties command €3,000-€5,000+ per square meter, while luxury Tivat developments can reach €7,200+ per square meter.
Villa prices in Tivat represent the highest segment, with luxury properties reaching €12,000+ per square meter in premium marina locations.
What are typical long-term rental prices in these areas?
Long-term rental prices reflect the significant gap between capital and coastal property markets in Montenegro.
Podgorica offers the most affordable long-term rentals, with one-bedroom apartments ranging €250-400 monthly, two-bedroom units €350-550, and three-bedroom apartments €500-750.
Coastal cities show remarkably similar rental ranges despite varying purchase prices, with one-bedroom apartments commanding €400-600 monthly across Budva, Kotor, and Tivat.
Two-bedroom coastal apartments typically rent for €600-900 monthly, while three-bedroom units reach €800-1,200 across all three coastal destinations.
Houses in coastal areas command €1,200-2,000 monthly for long-term rentals, with premium waterfront locations exceeding these ranges during peak demand periods.
How much can owners earn from short-term rentals in peak and off-seasons?
Short-term rental income shows dramatic seasonal variations across Montenegro's coastal cities, with summer peaks and winter valleys.
Budva properties achieve median annual Airbnb revenues around €12,900, with top-performing listings earning up to €1,850 monthly in August but dropping to just €490 monthly during off-season periods.
Kotor delivers stronger short-term performance with median annual income reaching €16,600, maintaining approximately 62% occupancy rates and peak daily rates around €80 in summer months.
Tivat shows more modest short-term returns with median annual income of €7,100, though peak months can generate €1,670+ monthly for well-positioned luxury properties.
Podgorica remains less attractive for short-term rentals, generating median annual income of just €4,350 with occupancy rates around 37% and average daily rates of €51.
Which cities attract the most tourists and how does this impact rental demand?
Budva and Kotor dominate Montenegro tourism, driving the strongest short-term rental demand throughout peak season.
Budva attracts visitors for its historic center, beaches, and summer festival calendar, creating intense competition for short-term rentals during July and August when demand peaks.
Kotor benefits from UNESCO World Heritage status and cruise ship arrivals, providing more consistent tourist flow from April through October compared to purely beach-focused destinations.
Tivat serves luxury tourism through Porto Montenegro marina and nearby Luštica Bay developments, attracting higher-spending visitors but in smaller numbers than Budva or Kotor.
It's something we develop in our Montenegro property pack.
Tourism seasonality creates significant rental volatility, with coastal properties experiencing 60-70% occupancy in summer but dropping below 30% during winter months.
What are the occupancy rates for long-term and short-term rentals?
Occupancy rates vary dramatically between rental types and locations across Montenegro's main cities.
Short-term rental occupancy peaks at 60-70% during summer months across coastal cities, with Kotor achieving the highest sustained rates at approximately 62% annually.
Tivat shows lower overall short-term occupancy at 28% annually, reaching peak occupancy of 45% during summer months due to intense luxury competition.
Podgorica maintains modest short-term occupancy around 37% annually, reflecting limited tourist appeal but more consistent business traveler demand.
Long-term rental occupancy remains high in Podgorica due to stable employment and government presence, while coastal areas experience moderate volatility from seasonal population shifts.
Winter occupancy drops significantly across all coastal destinations, with many short-term properties sitting vacant November through March unless converted to long-term arrangements.
What are the yearly costs for taxes, maintenance, and management?
Property ownership costs in Montenegro include several mandatory and optional expenses that impact net rental yields.
Annual property tax ranges 0.25%-1% of market value, with higher rates applying to prime coastal and luxury properties, and maximum rates of 5.5% for certain premium coastal assets.
Apartment maintenance costs typically run €1-2 per square meter monthly, with premium and serviced buildings commanding higher maintenance fees.
Property management fees range 10-20% of rental income for full-service short-term rental management, with lower fees for long-term rental oversight.
Utility costs average €80-100 monthly for typical apartments, while rental income tax applies at 15% after 30-50% cost deductions depending on rental type.
Short-term rental owners must register businesses and collect tourist taxes around €1 per guest per day, adding administrative complexity but generating additional revenue.
How quickly are property prices and rental rates rising in each city?
Montenegro property markets have shown strong appreciation across all major cities from 2020-2025, with coastal areas leading growth.
Budva and Kotor property prices have appreciated 3-7% annually over the past five years, driven by tourism infrastructure investment and foreign buyer demand.
Tivat luxury developments have experienced the strongest price growth, with some projects seeing up to 12% annual appreciation due to marina developments and luxury tourism expansion.
Podgorica shows more moderate price growth in the 3-5% annual range, reflecting steady economic growth and infrastructure improvements without tourism premiums.
Rental rates have followed similar patterns, with coastal short-term rentals showing the strongest growth during peak season periods while long-term rates grow more steadily.
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Which property types give the best rental returns in Montenegro?
Property type selection significantly impacts rental yields and management requirements across Montenegro markets.
Studios and one-bedroom apartments deliver the highest gross yields, offering easiest rental management for both long-term tenants and budget short-term travelers.
Luxury apartments and villas generate the best returns during peak short-term rental season, but experience higher volatility and occupancy challenges during off-season periods.
New or waterfront developments in Budva, Kotor, and Tivat rank among the most profitable for summer short-term rentals, commanding premium daily rates from tourists.
Villas and larger homes typically show lower yields for traditional year-round rentals, but can achieve excellent premiums for luxury short-term rentals during tourism influx.
It's something we develop in our Montenegro property pack.
What are the legal requirements for foreign investors renting out property?
Foreign property ownership and rental operations in Montenegro face minimal restrictions compared to many European countries.
Foreigners can freely buy, own, and rent out apartments and houses plus most urban land without residency requirements or ownership limitations.
Agricultural and forest land exceeding 5,000 square meters remains restricted to Montenegrin entities, but this rarely affects typical residential investment strategies.
Property rental requires registration with local tax authorities, while short-term and Airbnb rentals need business registration plus local hospitality tax registration.
Owners must report foreign guests and register all stays with authorities, plus collect and remit tourist taxes approximately €1 per guest per day.
Rental income faces 15% taxation after allowable deductions of 30-50% depending on rental type, plus annual property tax ranging 0.25%-1% of market value.
How easy is property resale in each city and what's the average selling time?
Property liquidity varies significantly between Montenegro's capital and coastal destinations, affecting exit strategy planning.
Coastal cities including Budva, Kotor, and Tivat maintain high demand, especially for well-located apartments and waterfront properties with average resale times of 4-6 months.
Premium and in-demand property types in coastal areas sometimes sell faster than average when priced at market rates, while luxury villas require longer marketing periods.
Podgorica offers a more stable but slower-selling market due to limited tourism appeal, focusing primarily on business and resident buyers with average resale times of 6-12 months.
Market conditions favor sellers in coastal areas during peak tourist season when buyer activity increases, while winter months typically see reduced transaction velocity.
Foreign buyers contribute significantly to coastal market liquidity, providing consistent demand for quality properties in prime locations across all three coastal cities.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Montenegro versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What infrastructure developments could boost rental returns in the next five years?
Montenegro infrastructure investments focus heavily on coastal tourism and connectivity improvements that should enhance rental property performance.
Tivat benefits from major Porto Montenegro marina expansion plus nearby Luštica Bay development, continuing to drive luxury tourism demand and premium rental rates.
Budva and Kotor infrastructure investments include marina upgrades, road and highway improvements, plus new hotel projects that will increase tourist inflow and support peak rental occupancy.
Airport connectivity improvements across all coastal regions enhance international accessibility, particularly benefiting short-term rental markets during shoulder seasons.
Highway development connecting coastal cities reduces travel times and increases property accessibility, potentially expanding rental market reach for each destination.
It's something we develop in our Montenegro property pack.
Overall Montenegro real estate continues experiencing 3-7% annual price increases, fueled by infrastructure investment and luxury tourism expansion especially along coastal areas.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Montenegro rental markets offer compelling opportunities for investors willing to navigate seasonal volatility and tourism dynamics.
Podgorica provides steady yields with lower volatility, while coastal cities deliver higher potential returns during peak season but require active management and seasonal planning for optimal performance.
Sources
- Global Property Guide - Montenegro Rent Yields
- MonoEstate - European Cities Rental Yields 2025
- InvestRopa - Budva Property Guide
- InvestRopa - Kotor Property Analysis
- InvestRopa - Tivat Property Market
- Airbtics - Budva Airbnb Revenue Data
- Airbtics - Kotor Airbnb Performance
- Omnia Capital - Montenegro Property Costs 2025
- Immigrant Invest - Montenegro Rental Prices
- Adriacom - Montenegro Rental Tax Guide