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Hi Rick,
There is no such thing as "Titles companies" here in Montenegro.
However, land registries are accessible online freely, and it is easy to check if there are any liens on any properties.
That doesn't guarantee 100% that some hidden claims won't ever show up, but it is some sort of guarantee.
When you sign any purchase contract at a Notary office, the Notary always makes sure to specify in the contract that if ever any claim from a third party showed up, the seller is responsible for taking care of it.
Of course, you can also hire the Notary or a Lawyer to investigate further into the archives of the land registry and to look up for potential family issues that could cause future claims.
Hope that helps !

Thank you, Tsarine.  That is very helpful. 

At the moment, the only other big question that comes to mind is...if the purchase contract specifies that the seller is responsible for third party claims, what would happen if either the seller could not be located, was no longer in MNE, or was unable or unwilling to take responsibility for those claims? 

I apologize if I'm being difficult.  I think I'd actually like to buy a house in MNE but I'm not a rich person.  So I need to make sure I understand the risks.

Again, thank you all for educating me.

Hi Rick,

Well, nothing is ever without any risk, so the best you can do is to take as many precautions as you can.

Luckily Montenegro is a very small country, and each municipality is a village really, so it is quite easy to find out possible issues within families for ex. mostly by word of mouth, or with basic research. That is if you buy from a local person.

If the person you buy from has more properties, then in case of any future claim there is always the possibility for the court to put a mortgage on other properties of the seller. You should probably engage a lawyer to check what are all the possible options to protect you.

To be honest, in 13 years of business here, I haven't heard so many "horror stories" about purchases that have gone wrong. For quite some years now, the land registries have been doing their job properly, and I think there are less and less cases where you can run into problems, but of course, you never know. It only needs to happen once!

Overall, I believe it is pretty safe now to invest here, and you should just invest in legal advice to the level of your fear

Cheers!
Carine

Good advice, Carine.  Thank you.  I made notes in my plans to be sure to engage a lawyer and to keep those things in mind.

Have a great weekend!

Rick

I saw a YouTube video from "The Wandering Investor" saying that about half the properties are not legalized.  He described it as mostly red tape.  It sounded like building permits. 

I live in Spokane but am interested in Montenegro due to low taxes and apparently pro-landlord legal system.  Here we had a prohibition on evictions since last March.

If you find a good property manager and decent rental yields (cap rates) after management fees, homeowners association fees, etc., on legalized property, I would be very interested to hear.  -Deepak

Hi Deepak,

I'd also seen that info on legalization, and have noticed while browsing real estate listings that some mention that they are 'legalized' or in the process.  Others say they are 'registered' which I take to mean that they have completed the legalization process, but I guess it could mean something else.

I am early in my research, but I will share what I learn. 

Good luck,

Rick

Got me what the difference is.  I don't know that I'd feel comfortable with a hillside property that was built without permits.  It is perhaps best to hire a lawyer who is not recommended by the real estate agent as well as an experienced building inspector.   The agent wants a closed deal and typically works for the seller.

A good or bad property manager can make or break your investment.   I haven't had much luck finding one yet. That's probably a good place to start, to get unbiased information.  Checking references by landlords (tenants often complain) seems to be the best way to screen property managers.

The coastal areas seem to have a three month long season.  I've never had much luck with vacation rentals.  The higher management fees, utilities,  cleanings, wear and tear, repairs, vacancies between tenants plus during the off season eats up much or all of your rent and HOA fees take the rest. I've tried in Cabo and it doesn't work anywhere nearly as well as investing in working cities.  It sounds like Tivat has more year round tenants than Kotor so that'smy primary area of interest.

Good luck in your quest.  If you do end up deciding to travel there, I'd pay for a hotel night and dinner or two in exchange for some research.   Please keep in touch.   

Deepak

A lot of different parties suggested here...

Personally I am none of them (I am a property developer, not an agent or a property manager), but in the business for 13 years, dealing with all these different parties, so I can give a quite enlightened opinion on a few points:

1. First of all, it is certainly not recommended to buy a property without a BUILDING PERMIT. Although there would be exceptions, with old stone houses, ruins, etc. A property that is in the process of legalization, is not necessarily without a BUILDING PERMIT. Sometimes, some developers have decided to build a few more square meters, or not respect 100% the projects, and need to go through legalisation to legalise the things that were changed from the initial project and obtain the final USAGE PERMIT.  Most of the time properties going under legalization, indeed didn't have a building permit (that would be the case of properties built a long time ago for example) but most of the time they were built according to a project. So really you have to check case by case. I believe the info of Ladislas (the wandering investor) about 50% of properties not being legalised is not relating to the case of properties without building permit, but referring to properties without a usage permit. Certainly a high number of properties do not have Usage Permit (the final permit you obtain after the finish construction), although most of these did have a building permit and are usually totally fine.

2. Regarding the recommendation of a lawyer by an agent, I have to disagree. I am usually not so much on the side of agents (for other reasons than them "just wanting to close a deal") however, an agent who has been on the market for many years, will most likely be of good advice when it comes to lawyers, as there are good ones and bad ones. Same goes for Notaries btw. Montenegro is so small that it is also very easy to double check any information. You will very often find out that there is a good reason why a professional has been recommended, or not, by another professional, and it is not just to quickly close a deal, it is often to protect everyone's interests. Good agents in Montenegro have to maintain a good level of professionalism as reputation is everything in this country. No good agent would take the risk to recommend a bad lawyer to speed things up, because eventually, if there was any problem, that would affect their reputation. So 1st thing to do, in case you want to hire an agent, check his/her reputation first.

3. Property Managers... Here I have to agree, it is impossible to find any good one yet....In 13 years here, developing properties, I haven't found any good one. Those I tried, caused more issues than anything else. There are very few of them still. We wish there was some good ones, as we would like to hand over our properties, once finished, to a good property management company, but in the absence of it, we do all the property management and rental management inhouse (we do not offer our services to owners of properties that we didn't build FYI). It is not our core business, but we have to do it in order to maintain a good level of "after sale" service. My opinion on this is that it is not a very profitable business, and it is extremely time and energy consuming, this is why there are few providers in my opinion.

4. Coastal areas do have a full time 100 days summer season, but if well managed, it is possible to rent off season as well. Our properties, for example, were booked all winter to digital nomads. Certainly at a reduced daily rate, but still at a better rate than when we rent on a yearly basis.  But you need to watch the trends, adapt to the demand, understand the clients needs, provide excellent service. We only use airbnb for example, as we can select tenants (we do not accept requests of guests who do not have 5 star reviews from other hosts, which ensures that they take care of the property as well).

5. Kolasin is definitly a place to watch if you are after year round yields. It has a 2-3 months winter high season (last winter the whole city was fully booked for 2-3 months) and also has very good rental potential the rest of the year. With an initial investment of a lower amount, the yield can potentially be higher than on the coast.

Good luck to both of you!

Interesting information,  thank you. 

What is an example of a fully legalized and completely built place that you would manage, that is for sale, that would have good rental yields after your management fees and condo association (strata, building maintenance,  I don’t know what you call it) fees?  In a new country, I would want to start with something small, like under 150,000 Euros, if that is possible.

Is it possible to open a bank account without being there?  Alternatively,  I do have a Euro account in France.  Could you deposit net proceeds into it?

-Deepak

We do have many options under 150k, because there's a lack of them in the market and we like to fill such gaps when there's a good demand

Feel free to send me a DM, ½ûÂþÌìÌà righteously doesn't like any advertising on their forum, which I respect.

You cannot open a bank account without being present but you can receive the income from your property in your French account indeed.