Budva vs. Kotor: Which Is the Better Real Estate Investment?

Should You Invest in Budva or Kotor?

Investing in real estate in Montenegro has become increasingly popular, with Budva and Kotor standing out as two prime locations. Each offers unique advantages, making it essential to compare them before making a decision. Choosing between Budva and Kotor depends on factors such as property value, rental income, and lifestyle preferences.

So, which city is the better real estate investment? Let’s break down the key aspects to help you decide.

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Key Takeaways:

Budva is best for short-term rentals and high tourist demand, while Kotor offers steady long-term value.

Kotor’s UNESCO protection limits new buildings, leading to higher property appreciation.

Budva has a more active real estate market, with new developments and strong seasonal rental income.

Investment in Kotor appeals to heritage buyers, while Budva is ideal for those seeking modern properties.

1. Property Prices and Growth

Budva and Kotor have different price trends. Budva’s market is driven by tourism and new developments, leading to steady price growth. Kotor’s UNESCO heritage status restricts new construction, creating a supply-demand imbalance that supports long-term appreciation.

Budva: Property prices range from €2,500 to €4,500 per sqm, depending on proximity to the coast.

Kotor: Prices are slightly higher, averaging €3,000 to €5,000 per sqm, especially in the Old Town and waterfront areas.

Investors seeking quick returns may prefer Budva’s fast-moving market, while those looking for long-term stability might favor Kotor.

2. Rental Income Potential

Rental income is a crucial factor in real estate investment. Budva’s vibrant tourism industry ensures high demand for short-term rentals, especially during the summer season. Kotor, while also a tourist hotspot, leans toward luxury and heritage stays, attracting long-term tenants and boutique rental opportunities.

Budva: Short-term rental yields range from 6-10%, with peak seasons driving higher returns.

Kotor: Long-term rental yields average 4-7%, with steady demand from expatriates and professionals.

For investors targeting high short-term rental income, Budva is the better choice. Those interested in stable, long-term tenants may find Kotor more attractive.

3. Location and Convenience

Both cities offer good infrastructure, but Budva has an edge in terms of accessibility and modern developments.

Budva: Well-connected by the Adriatic Highway, just 20 minutes from Tivat Airport, and home to major shopping centers and entertainment hubs.

Kotor: Closer to Tivat Airport (10 minutes away), but its Old Town’s preserved architecture limits large-scale infrastructure projects.

Budva’s modern amenities appeal to investors looking for new developments, while Kotor attracts buyers who value history and exclusivity.

4. Living Experience and Investment Appeal

Understanding the lifestyle and buyer preferences can influence investment decisions.

Budva: Best for investors targeting high-tourism demand, nightlife enthusiasts, and those looking for modern developments.

Kotor: Appeals to buyers who prefer a quiet, cultural atmosphere with historical charm and exclusivity.

Which City Is the Better Investment?

Budva is ideal for short-term rental investors and those seeking a fast-growing market, while Kotor is better for long-term appreciation and high-end buyers. The decision depends on investment goals—whether prioritizing quick returns or stable property value growth.

Both locations offer strong investment potential, but aligning your choice with your financial objectives is key to making the best decision.

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