Croatia vs. Montenegro: Which is the Better Buy?

◼ Mike says: Hi Ronan, my wife and I have visited Croatia several times and love it there. We’d really like a vacation home along the coast, but we’ve also been to Montenegro and properties there seem more affordable. What’s your take on Montenegro real estate?

◼ Ronan says: I’m very positive on real estate in Montenegro. Of course, that’s with the caveat that you need to find the right real estate in the right location at the right price, just as you would in any destination. But in general, I expect real estate in Montenegro to do well. The country placed #16 on my index of the 20 best places in the world to buy real estate in 2024.

Tucked away in the Balkans, Montenegro is smaller than the state of Connecticut. But what it lacks in size, it makes up for in beauty. It boasts one of the most dramatic coastlines in all of Europe, as well as some of the continent’s wildest and most beautiful mountains. Montenegro’s 183-mile-long Adriatic coast is liberally sprinkled with historic towns, lively beach resorts, secluded coves, and white-stone fishing villages, all punctuated by strips of fine sand and pebbled beaches alike.

The wild, remote interior, meanwhile, is a landscape of snow-dusted peaks, crystal-clear lakes, rivers, forests, and canyons. Montenegro is said to be the only place where you can pluck an orange from a tree overhanging a beach while looking at snow-capped mountains.

This country is now being touted as the latest “it” spot of the Mediterranean—a place that’s still relatively unexplored by most Westerners, but with the potential to have the same phenomenal tourism growth that Croatia saw over the past two decades.

In fact, the world’s most exclusive hotels have already moved in. The Regent, the Chedi, and a One&Only resort are here, with a Ritz-Carlton set to open this year.

Yet real estate prices are, on average, much lower than just a few miles over in Croatia. Although Montenegro is as stunning as Croatia, in some cases you’ll pay half the price for the same kind of real estate. For instance, last year my scout was in Montenegro’s Kotor Old Town, widely regarded as the best-preserved medieval town in the Mediterranean and one of the country’s top tourist sites. Prices there have been rising fast in recent years. When he visited, there was nothing available in the Old Town for under €320,000. But you’d pay double that or more to own in Dubrovnik’s Old Town in Croatia.

But I don’t expect it to stay that way. As more and more tourists spill over from more expensive Mediterranean hot spots in Italy and Greece, my thesis is that the next five to 10 years will see Montenegro’s real estate values converge with neighboring Croatia’s, particularly in tourist areas, as the country establishes itself as a go-to. This, in turn, creates a very promising opportunity for real estate investors who get in now.

In fact, I’m currently talking to the developer of one of Montenegro’s foremost luxury communities about a potential deal to bring to members of my Real Estate Trend Alert group.

◼ Jonathan says: Can I use my regular attorney in the United States to help me buy real estate overseas, or do I need to find an in-country lawyer?

◼ Ronan says: Buyers can sometimes feel nervous about trying to find a good attorney overseas, so they turn to their regular lawyer to help them with their overseas real estate purchase. But this isn’t something I advise. Sure, you’ve got a comfort level with the attorney you’ve used for years. They know you. They know your personal situation—right down to the name of your partner, your kids, and your dog. And your attorney might know a lot about real estate in your part of the world.

What they don’t know is the legal system or the buying process in other countries. Without country-specific legal knowledge and experience, an attorney can walk you into trouble.

For example, some legal terms used overseas can sound very similar to ones used back home—but don’t mean the same thing. Additionally, the type of legal system overseas is likely different from the one you’re used to. Most of the US and Canada uses common law. In the world of real estate, common law is very forgiving if you make a mistake or something goes wrong. You argue your case, plead for forgiveness, and reach a compromise with the seller.

Overseas, most countries use civil law. Civil law is much less forgiving. It’s black and white. There’s no gray area. You’re either right or wrong.

For these reasons, your home attorney just won’t cut it. To make sure you’re getting the best legal advice overseas, you need to find a competent in-country attorney. To do so, look for word-of-mouth recommendations. If you have friends, family, or colleagues who have bought in a certain country, ask them which attorney they used and whether it was a good experience.

Don’t take just any recommendation, though. And do not—I repeat, do not—use the attorney your broker or developer recommends. You should make sure your attorney works only for you. That may sound like a given. But it’s not a given overseas. In many countries, an attorney can legally represent both sides in a transaction because that may not be seen as a conflict of interest. So, feasibly, the attorney could be representing you, the buyer, and the seller, all without telling you. Ask your attorney specifically if they have any connection with, or represent, the seller.

When I bring a deal to members of my Real Estate Trend Alert group, I share the name of the in-country attorney that I use in that particular destination. RETA members also have access to my rolodex of contacts, including the names and contact details of attorneys that I and other RETA members have used in various countries.