Choosing a property for rent is difficult. In some cities, it is more profitable to work with long-term rentals, while in others it is more profitable to focus on the summer season. It is necessary to evaluate the following factors: occupancy, seasonality, profitability and demand.
In this article, we will explain what to focus on when choosing an object, what is important to know when buying and what to avoid.
What affects rental profitability in Montenegro?
The profitability of real estate in Montenegro depends on several factors at once. There is no universal formula here, but there are clear parameters that directly determine how much you will earn and how quickly the object will pay off.
1. Seasonality
Montenegro is primarily a destination for holidays in the warmer months. The main flow of tourists falls on June–September, and it is during this period that most of the annual income is generated.
During high season, the facility can be occupied up to 90-100% of the time.
In the off–season (October-May), demand drops, and the downtime rate can reach 60-70%, especially in purely tourist locations.
Therefore, income should be calculated not at the maximum price in August, but taking into account the months without tenants.
2. Type of property
Different objects bring different returns:
Studios and studio apartments offer the best percentage ROI: low entrance fees and high demand from couples, freelancers and single tourists.
2-room apartments are suitable for families and groups: the rate is higher, but the purchase price is also rising.
Apartments in complexes with a swimming pool/reception are easier to rent, especially to foreigners, but they have a maintenance fee that reduces the net profit.
Villas and the premium segment are a high check, but an expensive purchase. The ROI may be lower as a percentage, but the level of capital safety and liquidity is higher.
The profitability is also strongly influenced by the condition of the facility: fresh renovation, high-quality furniture, air conditioning, fast Internet. The better the equipment level, the higher the rate and the lower the downtime.
3. Location and infrastructure
A location in Montenegro solves almost everything. What increases profitability:
the beach is 5-10 minutes away,
restaurants and shops nearby,
bus/taxi access,
parking,
sea view.
4. Purchase price and rental rate
Profitability is directly related to the price at which you entered the transaction.
The lower the cost of an object (with the same level of demand), the higher the ROI and faster the payback.
Profitability is not only about the size of the lease, but also about the purchase price.
Therefore, studios can show a higher percentage of profit than villas: they cost 3-5 times cheaper, and rent is more stable.
5. Taxes and maintenance costs
To make the ROI calculation realistic, consider all mandatory expenses.:
The property tax is from 0.25% to 1% of the cadastral value.
The tax on rental income depends on who the owner is: an individual or a legal entity.
Utilities are calculated by meters.
Maintenance of the complex, if the accommodation is in a residence, is a fixed annual or monthly payment.
The fund for minor repairs is at least 3-5% per annum.
Top locations for rental business in 2026
According to the Global Property Guide, the most profitable rental investment destinations are Podgorica, Budva and Tivat. Each location works in its own way and is suitable for different strategies: short-term rental, long-term, premium segment or stable income with minimal management.
We have already compared these cities. You can read the material here.
Investor mistakes
Buying a property should be done thoughtfully, analyzing the conditions and weighing the pros and cons. What is best to avoid in order to achieve a successful result.
1. Buying “blindly” without analyzing occupancy
To see a beautiful view does not mean to buy a profitable object. Check the numbers beforehand and check:
the real average annual occupancy rate,
the seasonality of the location,
and the demand for a specific type of facility (studio / 2-bedroom).
2. Ignoring management costs
If the owner does not live in Montenegro, management is almost always transferred to the agency. The commission of the management companies is 20-30% of the rental income + cleaning and minor repairs.
Many investors consider “dirty income” rather than net profit, and as a result, ROI falls by 1-1.5 percentage points.
3. Choosing an object far from the sea or infrastructure
Even 600-800 meters to the beach can reduce the rental price by 20-40%.
Critical parameters:
distance to the beach;
parking availability;
the proximity of the market, supermarkets, cafes;
the quality of the access road.
If the tourist is uncomfortable, he chooses another option.
4. Underestimating the tax burden
Income from rents, if the owner is an individual, is taxed at 15% of 70% of revenue (i.e. actually 10.5%). Many investors do not take tax into account in ROI calculations, and returns are lower than expected.
We cannot name the only most profitable place to invest. Some locations offer high seasonal returns, while others offer year–round stability. The optimal choice depends on your budget, strategy, and how much time you are willing to devote to management.
What we can definitely do is show the actual real estate options. Our catalog contains various apartments, apartments, and land plots in a dozen cities, with a wide price fork. We publish only verified properties so that you don’t waste time on formalities and you only have to choose your options.
And you can offer your object for purchase in the “Add object” section. We will check everything carefully and include it in our catalog.
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