This blog provides a comprehensive overview of the key factors that influence the profitability of investing in a rental apartment, with a special focus on the real estate market in Makarska and its surroundings.
Location as the Key Factor in Rental Apartment Profitability
When it comes to real estate investment, location is the most important factor. That’s why Makarska is recognized as one of the most desirable destinations for buying rental apartments on the Croatian coast.
The city of Makarska and nearby towns such as Tučepi, Baška Voda, Brela, and Podgora attract a large number of tourists every year, ensuring high demand and excellent occupancy rates.
Factors that make Makarska an attractive location:
- Long summer season and stable climate
- Excellent transport connections (highway, ferries, proximity to Split)
- Well-developed tourist infrastructure
- Rising property prices and high market liquidity
Makarska is also appealing because of its combination of natural attractions - Biokovo mountain, beaches, the sea - and urban amenities that provide everything guests need for a pleasant stay.
Short-Term vs. Long-Term Rentals in Makarska
The type of rental significantly affects the expected return on investment. In Makarska, where the season lasts from May to October, short-term rental is the dominant form of leasing, though long-term rental also has its advantages.
Short-Term Rentals During the Tourist Season
Short-term rentals for guests from Europe and beyond generate high daily income, especially during July and August. In this period, well-equipped apartments can achieve rates of over €150 per night.
Advantages:
- High earning potential during the season
- Flexibility in managing the property
- Faster return on investment
Challenges:
- Dependence on the season
- Maintenance and cleaning costs between guest stays
- Need for calendar management, guest communication, and marketing
Long-Term Rentals Outside the Season
After the tourist season, apartments are increasingly rented to students, field workers, and digital nomads. Many owners use the period from October to May for a stable monthly income.
Advantages:
- Less effort required for property management
- Steady income without seasonal fluctuations
- Lower operating costs
Combination Strategy
Owners aiming to maximize income often apply a hybrid model - short-term rental in summer and long-term rental during the winter months.
Costs to Factor Into the Investment
To accurately calculate the profitability of an apartment in Makarska, it’s important to include all related costs, not just the purchase price.
Basic Costs:
- Real estate transfer tax: 3%
- Notary and legal fees
- Real estate agency fee (if mediation is used)
- Furnishing the apartment for rental
- Renovation and refurbishment (if needed)
Operational Costs:
- Monthly utilities (electricity, water, internet, building maintenance fee)
- Cleaning and apartment maintenance
- Advertising on platforms such as Booking and Airbnb
- Potential agency commission for property management (20-30%)
Properly planning these costs allows for realistic ROI expectations and ensures the long-term sustainability of the investment.
Legal Aspects of Renting Apartments in Makarska
Legally regulated renting is key to a sustainable and lawful business. Every apartment offered for rent must be registered and categorized in accordance with Croatian law.
Registration for Short-Term Rentals
- A permit is required to operate rental activities
- Mandatory categorization of the apartment by the competent office
- Registration of the property in the eVisitor system for guest check-in
Tax Obligations
- Lump-sum income tax or reporting of actual income
- Payment of tourist tax and contributions to the local tourist board
- Keeping business records, even for individuals
For long-term rentals, it is recommended to draft a rental agreement to protect your rights and obligations.
Current Real Estate Market Trends in Makarska
Makarska is experiencing rising property prices along with steady growth in demand, particularly among foreign buyers seeking apartments for personal holidays and rentals.
Current Trends:
- Apartment prices have increased by an average of 12-15% over the past two years
- Luxury apartments with sea views offer the fastest ROI
- Higher demand for apartments with additional amenities such as pools, parking, and terraces
- Growing interest from digital nomads looking for off-season accommodation
Buyers are increasingly seeking “ready-to-rent” apartments, creating opportunities for faster investment monetization.
Tips for First-Time Buyers Investing in an Apartment in Makarska
If you are considering investing in an apartment on the Makarska Riviera, it’s important to make informed decisions and have a clear strategy.
Practical Tips:
- Hire a local real estate agency familiar with micro-locations and price ranges
- Create a detailed financial plan with a budget for costs and expected income
- Invest in quality furnishing and modern design - this directly affects rental prices and reviews
- If you don’t live nearby, consider working with a local property management agency
Study legal regulations and tax obligations to ensure compliance from the very start.
Conclusion
Buying an apartment for rent in Makarska can be an extremely profitable investment if properly planned. The key to success lies in a good location, a clear rental strategy, accurate ROI calculation, and lawful business practices.
Makarska offers the ideal balance between tourist demand, quality of life, and market stability, making it one of the best locations for real estate investment on the Adriatic.
If you are considering investing, now is the right time to conduct a detailed analysis and take concrete steps.
