When considering real estate investments in Montenegro, one of the most common questions is: Is it more profitable to buy an apartment or a commercial space? Both options have their advantages and disadvantages, and the final decision often depends on the investor’s profile, future plans, and the specifics of the market they are investing in.
In recent years, Montenegro has seen growing demand for real estate, especially in coastal municipalities and Podgorica. Foreign investors are increasingly purchasing apartments, while at the same time, the need for commercial spaces has been rising due to the growth of small and medium-sized enterprises, as well as the expansion of tourism, hospitality, and service sectors.
Buying an Apartment as an Investment
Apartments are the most common choice for both domestic and foreign investors. The reason is simple – residential space is a universal need, and the demand for rental apartments continues to grow.
Advantages of buying an apartment:
- Stable demand – Students, young couples, employees in Podgorica and on the coast, as well as tourists, all make up a wide pool of potential tenants.
- Short-term and long-term rentals – In Podgorica, long-term rentals are more profitable, while on the coast, short-term seasonal rentals bring higher income.
- Capital security – Apartment values are generally stable in the long run and usually increase, especially in attractive locations such as Budva, Tivat, or central Podgorica.
- Easier resale – If the investor decides to sell, an apartment is usually easier to place on the market than a commercial space.
Disadvantages of buying an apartment:
- Requires ongoing maintenance and adaptation to the market (furnishing, renovations, modern interior).
- High competition – especially on the coast where almost everyone rents apartments during the season.
- Taxes and obligations (e.g., income tax on rentals).
Buying a Commercial Space as an Investment
On the other hand, commercial spaces offer a different type of opportunity. Their potential depends on location, type of property, and economic activity in the area. In Podgorica and on the coast, demand is growing for shops, offices, and spaces for hospitality businesses.
Advantages of buying a commercial space:
- · Long-term tenants – Businesses that rent space often stay for years, bringing investors stable income without frequent tenant changes.
- · Less responsibility for furnishing – Commercial spaces are usually rented “as is,” while tenants invest in the interior according to their needs.
- · Higher yield per square meter – In prime locations (Podgorica city center, main streets in Budva, Kotor, or Bar), rental prices for commercial spaces can be significantly higher compared to residential units.
- · Lower competition – The supply of commercial properties is narrower than that of apartments.
Disadvantages of buying a commercial space:
- Vacancy risk – a commercial space can remain empty for long periods if a tenant is not found.
- Dependence on economic conditions – in times of crisis, businesses may close, while demand for housing rarely drops significantly.
- Harder resale – the commercial property market is less liquid than the residential one.
Which Is More Profitable in Montenegro?
If we are talking about a safer and more flexible option, apartments are still the first choice for most investors. One-bedroom and two-bedroom units in Podgorica and on the coast are especially attractive, as they offer the best balance between purchase price and rental income potential.
However, commercial space can bring higher returns if the investor is willing to take on more risk. Shops on main streets in Budva or Bar, or offices in modern business buildings in Podgorica, often generate higher annual yields than apartments.
A Combination as the Best Strategy
Many experienced investors choose to diversify – buying an apartment as a secure base, and a commercial space as a potentially more lucrative project. This way, they balance risk while increasing the chances of achieving overall profitability.
Conclusion
On the Montenegrin real estate market, there is no universal answer to the question of whether it is better to buy an apartment or a commercial space. If you are looking for stability and quick liquidity, an apartment is the logical choice. If you are prepared to take on more risk in exchange for potentially higher profits, commercial property can be the right opportunity.
The most important thing is to analyze location, current and future demand, and your own financial goals. In any case, investing in real estate in Montenegro remains one of the safest and most promising options for investors, whether they choose an apartment or a commercial space.
For any additional information or guidance when buying property, feel free to contact us — we’re here to help you make the right choice.
