Croatia Offers Upfront Payments to Owners to Rent Out 600,000 Empty Homes — Is It Worth It?

Croatia’s bold fix for a split housing market

Croatia has a striking housing paradox: while the country needs about 230,000 additional residential units, roughly 600,000 homes and apartments sit empty. The government’s new Affordable Rental Programme, run by the Agency for Legal Transactions and Real Estate Brokerage (APN), aims to convert a share of those unused properties into long-term rental stock. For owners, the headline pull is cash paid upfront; for renters, it promises more supply and lower pressure on prices. For investors and expats, the scheme changes the rental-market map in small but meaningful ways.

We looked closely at what APN offers, what owners must hand over to join, and how this will affect the broader real estate Croatia market. The initiative may solve certain short-term frictions in the rental market, but it also introduces trade-offs that owners and outside investors need to weigh.

What the APN Affordable Rental Programme actually does

APN opened a public call on 18 December for owners of properties that have been unused for at least two years. The agency invites owners to enter a management contract for three to ten years. Under that contract APN takes over the property management, handles tenant relations, collects rent, pays utilities, and maintains the property. At the end of the contract the property is to be returned to the owner in its original condition.

Key operational points:

• Target properties: homes unused for at least two years (proof via electricity consumption data is required).
• Contract length: between 3 and 10 years.
• Management duties: tenant sourcing, rent collection, utility payments, upkeep.
• Payment structure for owners: 60% of the total agreed rent is paid at the start of the contract and the remaining 40% is paid halfway through the contract period.
• Application deadline: owners must submit documents by 15 February (year listed in the APN call).

APN has published illustrative earnings. For example:

• A 62 m² apartment in Osijek rented for 6 years at €7.90/m² yields €35,265.60 in gross rent; the owner receives €21,159.36 under APN’s payment schedule.
• A 95 m² house in Belišće rented for 7 years brings €27,052.20 to the owner.
• A 70 m² house in Đakovo rented for 10 years produces €31,701.60 for the owner.

These examples show how APN converts a long-term rental income stream into two lump-sum payments, reducing owner exposure to tenant default and administrative hassle.

Why APN thinks owners will sign up — and the real obstacles it is trying to remove

APN’s pitch focuses on barriers that have historically discouraged owners from renting. During interviews and in previous reporting, owners have cited:

• Fear of late or missed rent payments.
• Concern over damage to property and the cost of repairs.
• Difficulty managing a rental from another city or from abroad.
• Reluctance to take on ongoing administration and tenant screening.

By offering immediate or near-immediate cash and taking over all management duties, APN addresses those concerns directly. From an owner’s point of view this is attractive in several scenarios:

• For absentee owners who live abroad or in another Croatian city and would otherwise hire an expensive local agent.
• For older owners who prefer certainty and minimal administrative burden.
• For owners who want to avoid the risk of bad tenants and legal disputes.

But the programme also changes the risk profile for owners. Signing a multi-year agreement means locking in a gross payment structure that may underperform market rent growth in a rising market. We note three real risks owners should weigh:

1. Price risk: the APN examples use set per-square-metre rents that may be lower than what owners could achieve on the private market in high-demand areas.
2. Contractual lock-in: a 3–10 year management contract limits flexibility to sell, repurpose, or re-enter the private rental market at short notice.
3. Counterparty and bureaucratic risk: owners must trust APN to manage maintenance and return the property in original condition; disputes will involve public bureaucracy.

How this could change the rental supply and housing prices

Adding even a fraction of the 600,000 empty units into the rental stock would have an immediate supply effect. APN’s programme is unlikely to absorb all vacant homes, but the initiative could nudge supply in several ways:

• Short-term relief in secondary cities and towns where many empty homes are concentrated. Examples in the APN material are Osijek, Belišće and Đakovo, all in eastern Croatia.
• Reduced pressure on urban rents if roll-out targets suburban and provincial housing where vacancy is higher.
• Indirect effects on landlord behaviour: once a government-managed alternative exists, some private landlords may lower asking rents to remain competitive for tenants.

However, the magnitude of impact depends on uptake. Even with strong participation, adding tens of thousands of units will not erase the 230,000 property shortfall overnight. Implementation details matter: APN must run efficient tenant screening, maintenance, and rent-setting if the programme is to increase both supply and affordability.

What owners need to apply — paperwork, proof and timelines

APN’s application requirements are straightforward but strict. Owners who want to participate must submit:

• Proof of ownership and identification documents.
• Proof the property has been unused for at least two years; APN specifies electricity consumption data as acceptable evidence.
• Photographs of the property.
• Any required building permits or other legal permissions.

Applications are processed through the public call that began 18 December. The present call closes on 15 February. Missing documentation or inadequate proof of vacancy will likely disqualify an application. Owners should plan for time to assemble consumption records and official documents.

Practical advice for owners, investors and expats

We bring our real estate experience to concrete recommendations.

For property owners considering the APN programme:

• Run the numbers.