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Profit in Montenegrin

01.07.2008
Author: Olga FEDOSEYEVA
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In Montenegro, the service began to offer real estate management recently, and this is understandable, because the interest in the country's resorts also came only about five years ago. Foreign investors rarely spend the whole year in Montenegro. However, because of the peculiarities of the local climate concern for housing in the winter in the absence of the owners is needed. Real estate management services, coupled with the delivery of its lease in the country provide both companies and individuals. Both options have their pros and cons.
The life of resort towns is usually divided into two parts – the "low" and "high" seasons, and Montenegro is no exception. In the height of summer, the coastal areas of Montenegro, as in any resort country, look like an anthill with crowds of vacationers, incessant music and restaurants open until morning. During the rest of the months on the coast, most of the houses look completely uninhabited.
Officially, the "high" season begins on May 1 and ends at the end of October – although, of course, it depends on the temperature of the sea. If the owner does not live in the house or apartment himself, then during this period he should worry about renting out housing. In autumn, the owners of real estate lock houses and, as a rule, open them only in the spring – at the same time, it is important that the house survive the winter without losses.

You can't do without help
Real estate management as such appeared in Montenegro only a few years ago. After the collapse of Yugoslavia, the hotel and tourism business declined, and the owners who hosted guests in the private sector managed on their own: lack of money and general devastation in the country did not allow hiring service personnel. Even 8 years ago, it was generally accepted that the hostess receives guests herself, provides them with everything they need, she and her husband work in the kitchen, feed homemade food to tourists, change their beds and throw out garbage.
In recent years, the local tourist market has shown unprecedented growth, real estate began to sell out rapidly, houses began to acquire a fashionable look both outside and inside, and more funds and efforts were required to maintain them. Tourists have become more demanding and now, when coming to Montenegro on vacation, they count on cleanliness, European comfort, good food, and the availability of necessary luxury items. It has become almost impossible to meet all these requirements on our own.
Now almost everyone who is connected with tourism or the sale of housing is familiar with real estate management in Montenegro. Many online resources offer standard services for preparing for the season and renting houses. However, the question is who exactly to entrust the care of the house to – a company or an individual, so that, on the one hand, not to overpay, and on the other – not to lose quality.

By contract or in a neighborly way?
It is not difficult for a local resident to come in to ventilate the premises, pick up bills and turn on the taps in winter, but for a foreigner this can become a problem – in this case, all possible options should be considered. The most common, inexpensive, but not always ideal way is to entrust the management of the house to friends. Another option is to pay for the services of individuals (it is better, of course, when the owner is already familiar with them or when they have recommendations). In this case, a contract is not always signed, often there is an oral agreement on a price that suits both, services and scope of work. The most reliable, but also expensive way is to sign a contract with an agency.
The main problem with real estate in Montenegro is humidity, especially during the rainy season, when the roof of the building may become unusable, and then you will have to spend additional funds on major repairs. In this regard, it is necessary to ventilate all rooms at least once a week and check the ceilings, otherwise a rotten smell may arise, which will be difficult to weather even in a few months – unlike, for example, suburban cottages that can be put in order in a couple of sunny days. To restore the atmosphere of the living space, it is better to heat the rooms with air conditioners, heaters or a stove for some time. The standard price for ventilation in the absence of the owners is 20-30 euros, depending on the size of the house, but with an agreement with a neighbor, such a service can be much cheaper.
The second important issue is paying bills. Montenegro has a penalty for unpaid bills, which is slightly higher than the Russian one. It can be quite difficult for foreigners to explain six months later why payments were not made on time, which can cause additional problems, up to turning off the water, which is still tense in the country. Electricity, water and telephone bills are paid every month at the post office. For such services, the agency will require about 40 euros – an amount sometimes exceeding all bills for empty premises. Therefore, in order to save money, you can also arrange this with someone you know. If the owner does not consider it necessary to spend money on full-fledged housing care, with regular cleaning and minor repairs, during the winter, it will be better to negotiate with a private person, however, for comprehensive maintenance of premises in the absence of the owners, it is still recommended to contact an agency.

Everything needs care
Most agencies offer a standard list of services, and the approval procedure also rarely differs. The client signs a contract (usually a six-month contract is the most profitable), specifies the basic requirements and pays for services in advance. Force majeure circumstances must be listed in the contract - in case of their occurrence, losses are then calculated and agreements are reviewed. It is very important to make sure that the agency has done everything possible to avoid losses or minimize them. For example, due to frequent power outages, a short circuit may occur, so an agency employee is obliged to travel around all facilities during such periods to check whether there are problems with wiring and whether electrical appliances are intact.
Standard prepayment discounts for 4 months are 5%, for 6 months – 10%, for a year – 20%. The prices for cleaning the premises depend on the city and the location of the apartment or house. The maintenance of an apartment in the Old Town in Budva costs twice as much as the maintenance of a similar facility in the suburb of Bar. Cleaning the building from the outside (on the stairs, terrace, veranda, porch, and in the entrance) will cost 20-30 euros. It is important to specify which detergents are used, as sometimes irreparable damage is caused to tiles or stone, and repairs are necessary after such cleaning. The cost of one indoor wet cleaning of an average-sized two-storey house costs 50-70 euros. Dry cleaning is estimated at 50 euros. It costs the same amount to wash windows throughout the house, in apartments they pay 3-5 euros for each window. As a rule, agency employees perform high-quality work.
The land requires special care, and the owner must clearly understand what he wants to see upon his return. In Montenegro, planting of garden crops and flowers begins in February, and the choice of plants that grow in the country – up to watermelons and tangerines – is quite large. If the owner dreams of a full-fledged orchard and a carefully manicured lawn, he should contact the gardener. One-time regular watering of a garden plot with an area of 400 sq. m. m costs 30 euros, mowing grass costs 1 euro per square meter, the cost of comprehensive care can vary from 100 to 300 euros per month, depending on the quality of service and the list of services. Gardeners buy seeds and seedlings themselves, then submitting a report, and recommend how to arrange the plants depending on the amount of sun and other horticultural subtleties. If the owner prefers to deal with the site on his own, care should be taken to ensure that the garden adequately survived the drought period: As a rule, about 20% of plants die in Montenegro during the summer.
Meanwhile, if you live in Montenegro permanently, the services will be inexpensive: about 100 euros per month will be spent on weekly wet cleaning, and about 30 euros – to pay for the work of a gardener mowing the owner's lawn next door to his own.

Without noise and dust
Recently, at least in Budva, housing is increasingly rented during not only the "high" but also the "low" season. Local companies offer rental services all year round, which include finding clients, concluding a contract, receiving payment, taking care of rented premises and cost 10-25% of the rent.
The price may include: minor household repairs, if necessary, services of a painter, plumber, electrician, washing of bed linen, towels, tablecloths. In this case, it is important whether there are necessary appliances in the house – a washing machine, dryer and ironing machine. It is also very important to take measures so that there is always water in the apartment or house (a tank is installed for this), because, for example, in Budva, water is often supplied only at night in summer.
If an agency is looking for tenants, then you need to be prepared for the fact that payment arrangements may be violated, since in Montenegro everything often has the price that, according to the seller, the client can pay. If the owner himself provides a schedule for the arrival and departure of tenants, then most likely there will be no problems. A car at home can also generate income, especially if it is difficult to get to the house on foot. The prices for renting a car in summer are very high – on average about 80 euros per day.
It must be said that in most cases, renting out housing in Montenegro is not without problems, mainly in summer. The agency, which is an intermediary, also assumes the functions of a psychotherapist for tenants. Anyway, they are waiting for interruptions in water and light, traffic jams, lost time and many more misunderstandings that can only be predicted by living here for a long time. However, if the agency is working well, the owner of the property will never find out about it, will quietly receive the amount he expects and will want to continuecooperation next year.

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