How Much Do You Need to Invest in Real Estate?

Real estate is one of the most reliable ways to build wealth, preserve capital, and diversify your portfolio. Whether you're buying an apartment in Kotor, a seaside villa in Budva, or a small plot in Podgorica, many people start their investment journey by asking the same question: how much do you need to invest in real estate?

This happens all the time. People see those Instagram posts of luxury developments and think they need millions to get started. Others assume they can jump in with their Christmas bonus money.

The truth about how much you need to invest in real estate in Montenegro is way more complicated and interesting than most people realize.

It's a fair question and an important one. The amount you need to invest depends on a range of factors, including the type of property, the location, your goals, and even your risk tolerance.

In this article, we'll break down how much money is required to invest in real estate. And what is the lowest amount to invest in real estate? As well as help explore your options, and help you figure out the best way to enter the real estate market in Montenegro.

How Much Do You Need to Invest in Real Estate?

Let's start with some brutal honesty about how much money is required to invest in real estate in Montenegro.

We pulled up the latest listings while writing this, and here's what we found.  A decent one-bedroom apartment in Budva's Old Town? €180,000 minimum. That same money gets you a three-bedroom house in Nikšić. A studio apartment in Kotor that tourists will actually want to rent? €120,000 if you're lucky.

Meanwhile, €25,000 might get you a parking space in Tivat, if the seller is feeling generous.

However, there is no single answer to this question because the amount required varies depending on your approach. Are you planning to buy a small studio apartment, invest in commercial real estate, flip houses, or start a property management company?

There are some typical costs you'll have to consider:

• Property Price
• Down Payment
• Taxes and Fees

If you're buying an older property or planning to rent it out, factor in renovation costs and ongoing maintenance.

What Is the Lowest Amount to Invest in Real Estate? 

Everyone wants to know what the lowest amount is needed to invest in real estate, expecting some magic number that unlocks the market.

The real answer? It depends on how creative you're willing to get.

If you insist on buying prime coastal property outright, you're looking at €100,000+ minimum. But there are other options if you're a beginner who has just learnt real estate investing.

If you don't have the budget for a full property purchase, you can still invest in real estate through alternative strategies.

• Real Estate Investment Trusts (REITs): These allow you to invest in real estate indirectly through shares in a trust that owns and manages properties. Some platforms have minimum investments as low as €500 to €1,000.
• Crowdfunding Platforms: Crowdfunding platforms are becoming popular too. Some let you invest as little as €1,000 in larger commercial projects. You won't own the property directly, but you'll get a share of the rental income and appreciation.
• Partnerships or Joint Ventures: You can team up with others to buy a property, splitting the costs and profits.
• Real Estate Fund: A real estate fund is a pooled investment vehicle that collects money from multiple investors to purchase, develop, or manage real estate assets. Rather than owning individual properties directly, investors own shares of the fund, which holds the real estate.

So, what is the lowest amount to invest in real estate? Technically, you could get started with just a few hundred euros if you're investing through a trust or crowdfunding.

But if you're looking to buy your own property, you should realistically budget at least €50,000 to cover the property price, taxes, and fees, especially in Montenegro's residential market.

How Much of My Investments Should Be in Real Estate?

The question of how much of my investments should be in real estate is where things get personal.

Financial advisors usually recommend 5% to 10% of your portfolio, but that's based on traditional markets, not unique opportunities in Montenegro's real estate market.

How much you invest in real estate also depends on your age, goals, and risk tolerance. Real estate in Montenegro has been hot lately, but markets can change. Diversification isn't just smart, it's essential. 

The sweet spot for most investors is 20% to 25% of their portfolio in real estate once they've gained experience. This gives you meaningful exposure to the market's upside while protecting you from overdependence on any single asset class.

For younger investors who can tolerate more volatility. Older investors often prefer the stability and income real estate provides.

When deciding how much you should invest in real estate, consider the fact that real estate is not as liquid as stocks or bonds. But it also offers diversification so it protects against inflation and stock market downturns.

Ultimately, the right amount for you will depend on your unique financial situation and goals. If you're unsure, speaking with a financial advisor is a smart move. Keep in mind to never invest more than you can afford to lose.

How Much Money Do You Need to Start a Real Estate Business?

The question of how much money you need to start a real estate business is completely different from just buying investment properties. You're not just buying real estate, you're building a company that deals in real estate.

Real estate agencies require different startup amounts. One of our clients got her license and started her agency with €18,000. That covered licensing fees, office rent for six months, marketing materials, and enough working capital to survive until her first commissions came in. Typically you'll have to cover:

• Licensing and registration fees
• Office space and equipment
• Legal and accounting services
• Staff salaries
• Marketing and advertising

In Montenegro, starting a small real estate agency might require at least €10,000 to €20,000 to cover these initial expenses.

But the good news is that you don't necessarily need to start big. Many successful investors began as individual buyers, building experience and capital before expanding into full-fledged businesses.

The key with real estate businesses is understanding that you're not just investing in property, you're investing in systems, relationships, and expertise. The money requirements are lower than buying property, but the skill requirements are higher.

Montenegro's Real Estate Market

Here's what kills most beginner budgets: they only think about the purchase price. But buying real estate in Montenegro involves multiple additional costs that can add 10% to 15% to your total investment.

Transfer taxes are 3% of the property value. Legal fees typically run €1,000-3,000 depending on complexity. Property registration costs another €500 to €1,000. If you're financing the purchase, add loan origination fees and appraisal costs.

We always tell people to budget 20% above the purchase price for total acquisition costs, then another 3-5% annually for ongoing expenses. This prevents the surprises that derail so many investors.

The Montenegro real estate market offers opportunities at every price point. You just have to find the one that matches your situation and take action. Whether you've got €10,000 or €100,000, there's a strategy that can work.

If you'd like help finding your first property in Montenegro or advice on building your real estate portfolio, feel free to contact us today. Our professionals are here to guide you every step of the way.