Montenegro’s coastal property market can offer attractive short-term rental yields, especially in areas such as Bečići near Budva. A two-bedroom apartment case study shows how investors may reach around 6% to 7% net annual yield, before considering personal tax treatment, while also gaining a usable holiday base and possible residence option under current property ownership rules.
The example apartment is in Bečići, close to Budva, on Montenegro’s Adriatic coast. It is a 61-square-metre, two-bedroom, one-bathroom apartment on the third floor of a building under construction. The price discussed was €120,000, or slightly under €2,000 per square metre.
The layout is compact but suitable for Airbnb. For seaside short-term rentals, smaller bedrooms can work because guests usually spend much of their time outdoors and tend to value the number of sleeping areas more than large room sizes. With two bedrooms and a sofa bed in the living room, the apartment could potentially host four to six guests, such as two families, two couples, or even three couples.
The apartment has an elevator, decent finishings, and a partial view toward Bečići. The construction quality was presented as a positive point because the developer had already completed two buildings, and similar properties from the same developer were already being rented.
Why Bečići attracts short-term renters
Bečići is positioned as a calmer alternative to Budva while still being close to it. Budva is known for nightlife and a younger party crowd, while Bečići tends to attract more families, couples, and higher-end tourists looking for beaches and a quieter stay.
The area has several practical advantages for short-term rentals:
- It is around a 20-minute walk or five-minute drive from Budva.
- The beach is spacious and has Blue Flag status.
- The promenade runs from Budva Old Town toward Sveti Stefan.
- Nearby beaches include Kamenovo, Rafailovići, Sveti Stefan, Jaz, and Trsteno.
- The area appeals to Balkan, Eastern European, Central European, and increasingly Western tourists.
- Tivat Airport is about 40 minutes away by car.
- Podgorica Airport is about 45 minutes away by car.
Compared with Tivat and Kotor, Bečići has stronger beach access. Tivat has fewer beaches, while Kotor offers a different bay setting rather than open sea and sandy beaches.
Rental season and expected occupancy
The short-term rental season is concentrated between May and October. July and August are the strongest months and can be heavily booked. Outside the main season, demand is weaker, but the apartment remains usable by the owner without significantly affecting rental yield.
This is important for investors who want both income and personal use. November can still be pleasant in Montenegro, and April can already offer sunny weather around 20°C. The off-season may be better for hiking and spending time locally rather than swimming.
Yield estimate
The rental manager’s estimate suggested a net annual yield of about 7.1% based on the €120,000 purchase price. A more conservative version of the numbers, using lower monthly income assumptions and adjusted occupancy, still came to around 5.9%.
A realistic range for this type of apartment was therefore presented as approximately 6% to 7% net yield for the investor, before considering personal income tax treatment.
The cost assumptions included:
- electricity
- water
- garbage fees
- internet
- annual property tax
- maintenance
- repairs
- wear and tear
- cleaning and guest turnover costs
- rental management
Property taxes in Montenegro were described as relatively low. Income tax on rental income was also described as low, but investors would still need to consider tax rules in their own country of tax residence and check whether a double tax treaty allows tax credits or prevents double taxation.
Parking question
The apartment did not include a garage space. A parking space was available for an additional €15,000. There were also some free open parking spaces, but parking is a common problem in Montenegro during summer.
The rental estimate without parking was still considered viable because many tourists arrive by plane or bus. However, having parking could allow the owner to charge around €10 more per night.
The extra purchase price for parking may roughly preserve the overall yield rather than sharply improve it, but parking can make the unit easier to rent and more convenient for guests.
View risk and construction risk
One key risk is the empty land in front of the apartment. The landowner was said to be the same owner behind the complex, with plans to build two houses at a lower level. Under the current plan, these houses should not block the view.
However, this cannot be treated as guaranteed. Rules can change, and local enforcement can vary. Bečići currently has a moratorium on new construction for at least two years, but investors still need to treat future construction and view obstruction as real risks.
This is the kind of issue buyers should investigate before purchasing coastal property in Montenegro. A good price may compensate for some risk, but the buyer should not assume that today’s view will remain unchanged forever.
Guest profile and wear-and-tear risk
Short-term rentals on the coast can involve damage, especially during summer. Guests may return wet from the beach, drink heavily, damage furniture, or cause extra wear.
Bečići may reduce some of that risk compared with Budva because it attracts more families and couples rather than a party crowd. Rental managers can also take deposits from guests, but investors should still budget for maintenance and replacement costs.
Durable furniture is important in high-turnover rentals. In some parts of Montenegro, landlords targeting tougher rental segments use very strong furniture and simple interiors to reduce damage risk.
Montenegro property as a residence option
Under the current rules described, owning property in Montenegro can allow the owner and family to apply for residence. This can make property ownership useful as a “Plan B,” not just as an investment.
However, the residence route is not effortless. To renew residence, the government expects the person to spend at least 10 months per year in Montenegro. This makes it more suitable for someone who may genuinely want to live there, relocate there, or keep Montenegro as a serious backup option.
The example given was that some Russians and Ukrainians who already owned property in Montenegro were able to move there and claim residence when conditions worsened in their home countries.
Practical investor takeaway
A compact two-bedroom apartment in Bečići can work well as a short-term rental if it is close enough to the beach, has good finishings, and is managed professionally. The numbers in this case suggest a realistic net yield of around 6% to 7%, with most income coming between May and October.
The main advantages are:
- stronger yields than many Western European markets
- personal use outside the rental season
- beach access and family-oriented tourism demand
- proximity to Budva without being in the main party zone
- potential Montenegro residence route through property ownership
The main risks are:
- possible future construction affecting views
- seasonal income concentration
- summer wear and tear
- parking constraints
- need to understand local tax and home-country tax treatment
- dependence on good rental management
For investors, the key decision is whether the yield, personal use value, and residence optionality justify the construction, seasonality, and management risks.
