Best Cities to Buy Rental Property in Montenegro

Thinking about investing in real estate abroad? You’re not alone. With rising property prices in Western Europe, many investors are turning their attention to lesser-known but promising locations—like Montenegro.

Montenegro, a Balkan country on the Adriatic coast, is quickly gaining attention for its scenic beauty, favorable tax policies, and growing tourism industry. But where exactly should you buy rental property in Montenegro? And is it really a smart move?

In this guide, we’ll break down the best cities to buy rental property, backed by actionable insights to help you make an informed decision.

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Is It Worth Buying Property in Montenegro?

Yes—buying property in Montenegro is often worth it, especially if you’re looking for long-term rental income or property appreciation.

Here’s why:

• Low property taxes and no annual tax for non-residents.

• Growing tourism sector (Montenegro welcomed over 2.6 million tourists in 2023) (source).

• Easy access to Europe without being part of the EU.

• Montenegro investment residency program allows property buyers to qualify for residency under specific conditions (source).

That said, foreign buyers should still do due diligence regarding legal processes, zoning restrictions, and future development plans in each area.

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Best Cities to Buy Rental Property in Montenegro

If your goal is passive income or a diversified real estate portfolio, Montenegro offers multiple attractive entry points depending on your strategy.

Here’s

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Kotor – Best for Scenic Short-Term Rentals

Why Kotor? This UNESCO-listed old town is one of Montenegro’s most visited tourist destinations. Its medieval architecture and bay views attract thousands of travelers each summer.

Ideal for:

• Airbnb-style vacation rentals

• Investors targeting short-term income

Why it works:

• High demand during tourist season

• Limited space keeps property values stable

• Walkability increases appeal to foreign renters

If you're purchasing an investment property aimed at tourists, Kotor offers excellent yield potential.

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Budva – Best for High-Traffic Beach Rentals

Budva is the tourist capital of Montenegro, known for nightlife, beaches, and festivals.

Ideal for:

• Investors focused on rental income

• Younger expats or digital nomads

Why it works:

• Strong rental demand from May to October

• Plenty of property management services available

• Large supply of modern apartments and villas

Real estate investment properties in Budva often offer double-digit gross yields during peak season.

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Tivat – Best for Long-Term Expats and Luxury Rentals

Tivat is home to Porto Montenegro, the luxury marina development favored by wealthy expats and yacht owners.

Ideal for:

• High-end, long-term rentals

• Investors targeting luxury markets

Why it works:

• Close to Tivat Airport (international access)

• Upscale restaurants, schools, and services

• Stable demand from international professionals

If you're asking, "Where do the rich live in Montenegro?"—Tivat is the clear answer.

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Podgorica – Best for Year-Round Tenants

As the capital city, Podgorica is more functional than scenic—but it's ideal for investors looking for consistent rental income.

Ideal for:

• Long-term residential rentals

• Student housing or professional tenants

Why it works:

• Demand from locals, workers, and students

• Lower property prices compared to coastal towns

• Steady rental yield potential year-round

While it’s not the top pick for tourists, Podgorica remains a practical choice for real estate investment properties with low seasonality.

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Herceg Novi – Best for Affordable Coastal Living

Located near the Croatian border, Herceg Novi offers a mix of old charm and new developments.

Ideal for:

• Investors with mid-range budgets

• Buyers seeking a mix of lifestyle and ROI

Why it works:

• Affordable compared to Budva or Kotor

• Attractive to retirees and slower-paced travelers

• Good potential for appreciation

If you’re wondering, “Where is the best place for expats to live in Montenegro?”, Herceg Novi is often recommended for its relaxed pace and cost-effectiveness.

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Where Is the Easiest Place to Live as an Expat?

The easiest place to live as an expat in Montenegro depends on your priorities:

• Tivat for luxury and international community

• Herceg Novi for peace and affordability

• Budva for energy and convenience

Most expats prefer towns with access to international schools, English-speaking services, and good healthcare. Coastal towns tend to check more of those boxes than inland cities.

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Pros and Cons of Living in Montenegro

Pros:

• Low cost of living compared to Western Europe

• Stunning nature and outdoor activities

• Tax advantages for foreign property owners

• Access to the Montenegro investment residency pathway

Cons:

• Bureaucracy can be slow and unclear

• Limited job opportunities outside tourism

• Infrastructure varies between cities

• Winters can be quiet and isolating in coastal towns

These are all key considerations before investing in properties in Montenegro for rental purposes.

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Montenegro Investment Residency: What Property Buyers Need to Know

If you're considering living in Montenegro or spending extended time in the country, the Montenegro investment residency program is worth exploring.

What is the investment residency program?

Montenegro offers a residency permit to non-EU citizens who purchase property in the country. This allows you to live in Montenegro legally for a renewable one-year period, and eventually apply for permanent residency after five years (source).

Key Requirements:

• You must purchase real estate in Montenegro—there's no official minimum value, but higher-value properties improve your approval chances.

• Proof of sufficient income or savings to support yourself.

• Proof of accommodation (your owned property qualifies).

• You must reside in the country for a certain number of days per year to maintain your permit.

Benefits of Montenegro Investment Residency:

• Live legally in Montenegro without needing a visa.

• Family members can also qualify, including your spouse and children.

• Access to public services, healthcare, and education.

• Pathway to permanent residency after five continuous years of temporary residence.

• A potential step toward Montenegrin citizenship, though naturalization is more selective.

Is this the same as citizenship by investment?

No. Montenegro’s citizenship-by-investment program officially ended in 2022. The current investment residency route only provides legal residency—not a passport. However, it still provides a long-term legal basis for living and investing in the country.

Who is it best for?

• Retirees and digital nomads looking to live in Montenegro year-round

• Investors buying rental property who want to manage their assets directly

• Those interested in future EU integration benefits, as Montenegro is a candidate country

If you're purchasing an investment property with the goal of spending time in the country—or eventually relocating—the Montenegro investment residency option adds significant value to your real estate purchase.

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Final Thoughts

Montenegro offers real opportunities for rental income, lifestyle benefits, and long-term growth. From scenic Kotor to lively Budva and upscale Tivat, the best cities to buy rental property depend on your strategy.

With the added benefit of the Montenegro investment residency program, purchasing an investment property here can be both profitable and practical. Just be sure to do your research before investing in properties in Montenegro.

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