Please could you tell me the recent capital growth and rental income achieved in Montenegro and the potential for the next 5 years? What are the advantages and problems with buying property here? What aboutt the Russians?

hi, Do a search in the forum section with keyword ´montenegro` cos this country was discussed in forum a few months ago. liam

I bought in Montenegro in Jan 2006 off plan for euro124,000. Similar apartments in the same development are now selling for euro215,000.I have now moved to Montenegro and have set a business providng furniture to investors buying apartments off plan [web address removed by admin]See below for the pros and cons of investing now in montenegro as I see it.ProsMortgage finance has been difficult but is now starting to filter through - this will increase demand in the future.Peter Monk, Canadian investor is building supermarina in Tivat which will put country on map and bring in high rollers.Tourist market has yet to take off. Budget airlines have not discovered Monty yet, when they do should be good for the market. Lonely plant published Montenegro in it's top 30 must see places in the world, and Monty is currently the fastest growing tourist destination in the world. The Russian's love Monty because they can visit without a visa and buy here easily. This money is underpinning the market.ConsInfrustructure needs to improve, but it is expected too soon. Corruption is a problem, you need to have a good lawyer and check everything.Supply of finished apartments at moment is limited, however the is about 10,000 apartemetn planned for the next two years. What will this increase in supply do to prices?Prices are high, how much higher can they go. I personally think they have at least another 30-40% to go to compare with other European locations. In terms of Rental income, check out ownersdirect.com. Annual rent on a two bed apartment should be between 10K and 15K per annum (there is very high occupancy at the moment as there is a shortage of accommodation) Rental rates have not changed much yet but I expect them to increase as Monty targets western tourists.

James I to have bought in Montenegro, a development by "Someplace Else" called Boka Heights in Dobrota, do you know of this ? I would be interested in having your contact details (if you email PS they may give you my email) as my apartment should be ready for next summer and i will need some furniture. Who do you reccomend for mortgages ? Where have you bought. Rob M

Hi Rob, I know Someplace Else and I know of the Boka Heights development in Dobrota. Dobrota is a very popular location I would expect your investment to do very well indeed. With regard Mortgages if have heard that Hypo Group Alpe Adira are the most progressive in Montenegro and the are developing and launching new mortgage products all the time. I think interest rates are still high 7-9% (which I do not understand as Montenegro uses the Euro)and the best branch to visit is located in Podgorica. I plan to visit them early in the new year to understand what they can offer for my self. I have bought in Prcanj in the Katica Development. We are due to move into apartmnet in January. I really like Prcanj and we are very happy with our purchase. I will try and contact you by asking property secrets for your email address. Alternatively if you google search "Montenegro Furniture Packages" we appear number two in the listings. James

James I'd be interested to hear how you get on with Hypo for a mortgage, i have spoken with their London brach, the only problem is that they will not release the funds until the property is registered with the courts (normally 3 months after completion) therefore i can not pay the developer unless he will take the guarantee of the bank. Had a search on google, trouble is there are a few and i don't see your name on them. Rob

It would seem you have more experience than me with Hypo. My hope is that they are developing financial products all the time and the market will gradually become more flexible and less expensive. I guess the key is to be first in the queue when it happens. I asked for your details but they will not pass them on becuase of data protection but I have asked them to pass on mine. James Horgan (PSM)

www.frontiersfs.com have also started doing mortgages in Montenegro, but also quite dear at over 9%. For info click on the map to get to Montenegro. I know PS does not like Montenegro, but there is a lot of FDI going into the country (the largest per capita in Europe I believe) and I read they are looking to reduce their taxes to one of the lowest levels in Europe. This super marina in Tivat is what I think will propel property prices though as it will be quite special. I bought within Kotor old town and have had it solidly rented thoughout the holiday season, and then since september a long winter let to one of the company employees of the new marina. I had several other enquiries for the winter as well. However I guess I would agree with PS when they say stay off the beach as that way you are more likely to get all year round rentals

Hi

Just to add to the discussion on Montenegro, the Montenegrin government has recently backed a draft law which will allow foreign citizens to buy land in the country.

Currently in order to buy land for personal uses or development, investors are required to set up a Montenegrin company - a daunting task I have been told.

I am not familiar with planning restrictions in Montenegro but I have not heard they are stringent. Lets hope the planned law change does not lead to over development on the coast.

In terms of PS not liking Montenegro, it would make an excellent holiday destination as it is a stunningly beautiful country. The Government has been changing its approach to investment in the last few years, as it attempts to speed up its EU membership application. It still remains a holiday/coastal desination for us.

Noreen