Budva is the undisputed tourist capital of Montenegro, and the destination of the elite, the wealthy and the trendy. If one considers investing in property in the town for either capital growth or for rental income it is worth thinking high class and investing accordingly. Throwing your investment funds at a high rise development with small apartments may not be the best return as strategic planning shows that the tourist trend there is catering for the rich who expect far more than a bog standard letting.
The Russian investors have already been buying up luxury villas in the most elite part of Budva, the island of Sveti Stefan which connects to the mainland. Sveti Stefan attracts the presidents of foreign countries, and celebrities such as Sophia Loren and Claudia Schifer. It is a quiet oasis of natural beauty with narrow streets and picturesque squares. Investors who are looking for excellent long term capital returns could consider the island but will need plenty of Euros, and need to be able to offer high class luxury accommodation for vacationers.
Whilst the island may be an altogether too expensive investment, Budva itself remains an attractive opportunity. The coastline is 21kms and boasts 17 beaches. The Old Town of Budva was an important Adriatic fortification and is 2500 years old. Founded by the exiled ruler of Thebes its architecture is influenced by the numerous cultures which controlled the town, and features Roman, Byzantine, Venetian, Turk, French and Austro-Hungarian. The Venetian style is most in evidence.
It is possible to find property both in the old town and in the more areas of Budva. Those investing in Budva should be aware of certain factors which may influence their choice of location. Currently the town’s roads become over congested in summer and there is an inadequate parking supply so apartments which offer parking will be popular. There are plans afoot to invest in the traffic problem in Budva but no firm dates have been set.
Another problem which Budva has in the summer is caused by the lack of water as the infrastructure is not set up to cope with the amazing growth in tourism, so a property which features a back up water system would be a wise choice and a good point when letting the property. Budva is an area which has been previously devastated by earthquakes, the last in 1979, so be sure to check all relevant documentation to ensure that the property complies with earthquake building regulations and check out the reputation of the developer to make sure that cutting corners isn’t a habit. Also check that you are able to obtain insurance to cover the possibility of earthquakes.
Budva is full of lively bars and cafes which play loud music until 1am. In addition many beach parties continue through the night with loud music. This should be considered when purchasing as a property near to the lively center will most likely appeal to the young trendy tourists but not to the older tourist, so have your target holiday maker in mind when you make your investment.
As Montenegro is singled out as one of the top two growth areas for tourism in the world, in the next decade, investing in its tourism capital makes good sense. If the investment will bring a rental return it is most important to consider your market and what type of tourist you would be catering to. Currently it is a buyer’s market in Budva so negotiate prices down wherever possible and be aware that many properties are way over priced due to over inflated prices driven high by previous investors who bought before the recession.
Don’t buy in haste but shop around for realistic prices which will still provide both a good rental income and capital growth. Montenegro encourages foreign investment and there is a flat 3% tax on property purchases.