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 How we created our slice of Croatian paradise 

Croatians living abroad have made investments in Croatia’s booming tourism sector

(Private album)

A number of Croatians living abroad have made investments in Croatia’s booming tourism sector. Being split between two countries can make it challenging to say the least realising a project, but someone who has managed it is Croatian-American Justin Mihalinec and his family. 

“I can’t even begin to tell you the number of discussions my father and I have had over the decades about investing in Croatia. At every family holiday event, it was always the main topic of conversation. Our dream was to always build or remodel a villa that our entire family would want to visit every season and to also share a piece of our beautiful homeland with friends and future guests for a lifetime. We wanted a place that we could call home when we visited the homeland but one that could also generate income for us when we were abroad, and this is what really made this dream a reality for us as we needed the property to be both, our little slice of Croatian heaven but also become a revenue driver for us,” Justin starts off telling us.

Justin was born in the US to parents who immigrated from Croatia in the 1970s. His father was born in Rijeka, whilst his mother comes from the island of Susak.

“They met in Hoboken, NJ. I was raised in New Jersey, and eventually moved to Los Angeles in 2008 and reside today in the Palos Verdes area. For my fellow Croats, just south of Palos Verdes lies San Pedro, a southernmost community on the Palos Verdes Peninsula. San Pedro is home to one of the largest Croatian communities in the country, with an estimated 30,000 people with Croatian roots, living in San Pedro. My wife’s Croatian lineage actually started here, as the first destination from Croatia.”

During the summer of 2019, Justin and his family stumbled upon a charming, old stone villa in the bay of Žrnovska Banja on Korčula Island during their annual visit to Croatia. 

“As luck would have it, the villa was available, and there began the journey of what ultimately became Stowaway Suites. We realized that we would need to do a full remodel down to the studs, I knew this was going to be one of the hardest things I had ever done in my life. We quickly learned that doing business in Croatia was very different from the US, there were a lot of obstacles we had to overcome, language barrier (for me), delivery challenges, and even traveling to Croatia during the height of the pandemic (multiple times), as we ended up acting as our own General Contractors for the project,” says Justin, who then explains in detail how he came across his slice of Croatian paradise.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Justin working on the infinity pool (Private album)

“My wife and I married in September 2018 and visited thereafter to celebrate for our honeymoon. Although my father is from Rijeka and my mother is from the island Susak, the Dalmatian Coast has always been my favorite part of Croatia, sorry Mom, and Dad! The Dalmatian islands is also where my wife’s heritage is (Stari Grad, Hvar), so I was excited to share show her our beautiful country and the beauty of the islands.

During our honeymoon we visited Split, Hvar, Dubrovnik, and Korčula. During our time in Korčula, we stayed at the charming boutique hotel, Tara’s Lodge, which we are now partnered with Tara’s Lodge as our property manager of Stowaway Suites.

One morning while enjoying breakfast at Tara’s Lodge, which overlooks the bay of Žrnovska Banja, I had received a text from my father (who was stateside at the time), with a link to a real estate listing. 

Now keep in mind, my father had no idea where I was in Croatia at the time of our honeymoon. At previous times when we would share real estate listings via texts, the properties varied across many different areas of the Dalmatian Coast, and the listing were vague, not stating exact location only providing the detail of the island in which the listing was based in, such as “Korčula”.

While I was reviewing the listing’s photos of the property, I noticed it looked familiar. As I gazed upon the bay, of Žrnvoska Banja, I saw a home directly in front of our vantage point, which looked to appear to be the property in the listing’s photos.

After showing the photos to my wife, she agreed that the villa looked exactly like the property in the description my father had sent me. With a feeling of fate in mind, I was committed to seeing this listing in person and locating the listing agent in the final days of our stay.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Žrnovska Banja and the villa (Private album)

That afternoon, I was able to get a hold of the listing agent and we scheduled a showing the next morning which was our last day in Korčula. After seeing the property, although the listing was over our budget, I immediately saw the potential, and knew we had to negotiate to secure this property.  

We were able to put together an offer quickly, slightly below the listing price, but unfortunately, the owners declined our offer, and we were unwilling to budge due to the extensive renovations needed to restore the property, knowing the costs and possible headaches associated.

My family and I were devastated as we really thought we had finally found our dream project.

Fast forward a year later, we took a trip to once again, to Korčula, with my entire family that summer, as it has always been one of my families’ favorite islands in Croatia. When we arrived in Korčula, my father and I immediately went to the real estate office that had originally listed the property to learn what the status was of the residence. We were told that it was no longer available, and the listing had been removed from their site. We both looked at each other with the face of disappointment, AGAIN.

Later that day, we went for a swim in the bay of Žrnovska Banja, and noticed a dog barking near the property, which was odd as the original owners also had a similar dog when I had visited last year. I convinced my dad to swim across the bay with me to investigate as I was positive it was the owner’s dog, and they must be there. As we approached the dock, we noticed that the owner was outside and we called out to him, from the water, to see if he would be okay with speaking with us.

Croatians living abroad have made investments in Croatia’s booming tourism sector

The villa (Private album)

He agreed and invited us into his home. As we approached the stairs, we were in our swim trunks, soaking wet, and began to inquire about the sale of the property. 

He was extremely transparent and shared that the current offer he accepted had complications and the buyers were having financial challenges. After hearing this news, we knew we had one last chance to acquire this villa and spent the next two hours sitting with the owner of the property. 

After multiple glasses of Karlovačko, we made our case to be the future owners of his residence and were able to agree on terms for the sale of the villa that made sense for both parties. After shaking hands, the owner promised to cancel the existing terms he had with the other buyers, we followed up later that evening with the appropriate paperwork for the sale, and there began the journey of what ultimately became Stowaway Suites. It truly was fate!”

Croatians living abroad have made investments in Croatia’s booming tourism sector

Night view (Private album)

Justin, who has a 9-5 job selling digital advertising and helping grow technology startups in the Southern California area, has always had a real passion for real estate.

“Real estate has been the heart of my side hustle for over a decade now, as I have successfully completed multiple projects throughout the SoCal area. I absolutely love the process of a home renovation, there is something special about the transformation of an older home into a newly and beautifully crafted residence;” he says.

This passion helped get Justin through some testing moments, which he will explain later. 

First though, we asked him what advice would he give someone from abroad wanting to do something similar?

For an eager and like-minded Croatian, I would be happy to share my thoughts to possibly inspire someone.

When my father and I started our search a decade ago, we always knew we wanted to not only invest in a family residence for us to call home abroad, but we also wanted to be able to support local Croats, through Croatia’s booming tourism sector. This was important for my family.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Before and after – loft bedroom (Private album)

With that said, knowing this would be an investment property, my first piece of advice is to create a D.O.O, which is basically a business entity, or a L.L.C. When purchasing real estate in Croatia, an individual buyer incurs a three percent real estate transfer fee, Which is process of changing the ownership title from a preview owner the new owner.

If the purchase occurs via a D.O.O. or business entity, the new buyer or business is exempt from paying this three percent transfer fee.

Unfortunately, and unknowingly at the time, we did not originally create a D.O.O. For example, with a two hundred and fifty thousand euro investment, you would have saved over seven thousand euros+ in savings, with the real estate transfer fee exempt. I would confirm this with a local real estate attorney, as I am not credited to give legal advice, it was just explained to me after the fact.

My next piece of advice is to follow your dreams, with tenacity.

My father and I both dreamt of owning a property in Croatia, but had many reservations: another financial commitment, unsure on what type of investment return we could achieve, and an unknown with undergoing a renovation in a foreign country.

Based on what I discovered just with the home buying process, was that in general, the real estate prices had not (at the time) appreciated like many other markets, such as the United States or other major European countries.

We were able to acquire a waterfront property in a booming tourism sector for a fraction of what it would cost in the US.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Stowaway Suites – exterior (Private album)

From a short-term rental/micro perspective, tourism demand has never been better, there is an incredible lack of supply for modern accommodations, and average nightly rates continue to skyrocket YoY which leads to a tremendous amount of upside for a “foreign” investor. Tourism revenues for 2022 officially surpassed the pre-pandemic record of 2019, and it is just the beginning as Croatia is becoming one of the hottest vacation destinations in the world.

I recommend that anyone who is serious about investing in a home in Croatia to isolate two areas of interest: 1) Reach out to multiple real estate agents within each market to better understand areas of opportunity and feasibility.

Websites such as realestatecroatia.comcroatiapropertysales.com, and croestate.com may help you filter down your search in the meantime.

2) You may want to follow the same real estate logic we have stateside, and that is: find a location that is easily accessible, one that is within striking distance of one of the main international airports, and a property that either has a view or is waterfront for rental purposes (if you have the Dalmatian islands or coast in mind). 

You know the old saying, location, location, location…even if the property needs work, don’t worry, securing the property is the first and most important hurdle.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Stowaway Suites (Private album)

The entire process of identifying, renovating, and designing a property may seem overwhelming and challenging, which don’t get me wrong, we have had our challenges, but with that being said it has also been one of the most rewarding accomplishments for both my father and I.

I am brought by joy and happiness to speak of our property in Croatia, that we also now get to call a second home.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Stowaway Suites – exterior (Private album)

What were the biggest challenges of the project?

Every successful renovation is achieved through thorough preparation, hard labor, clever remodeling, and interior design. Yet, there was not enough planning that would have prepared us for this experience.

For one, there has been an exodus of skilled craftsmen from Croatia as many have looked for more lucrative work in affluent Western EU countries, and with the limited amount of quality workers, you will learn that best craftsman may not be available when you need them. 

Secondly, the construction is seasonal and comes to a haunt during the summer. From June to September, your remodeling project may be on hold, and you may have to plan accordingly for this setback. Thirdly, and most importantly, as much as you want to control and manage the project from abroad, I very diligently and desperately tried my best, it can be extremely difficult; due to time differences and language barriers.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Stowaway Suites –

For our next project, we will hire a third-party project manager to oversee the entire build. You may notice a slightly slower pace in Croatia, in comparison to the states, and if you are in Dalmatia, you are probably familiar with the fjaka state of mind, or should I say, the sweetness of doing nothing during those hot summer days.

Our remodeling project took a lot longer than we expected to complete, with a countless number of delays, knowing this now, we will have a project manager on the ground, for the next opportunity.

Croatians living abroad have made investments in Croatia’s booming tourism sector

During construction (Private album)

After a successful soft launch this summer in Korčula, Justin anticipates the official opening of Stowaway Suites to be in April 2023.

“We recently finished our website, https://stowawaysuites.com/, and have partnered with one of the most charming boutique hotels in Korčula, Tara’s Lodge, to manage the property on the ground, in the location of our villa, Žrnovska Banja. We offer a unique accommodation as our guests appreciate all the benefits of a private waterfront residence but with access to all the amenities of a hotel – which is a huge differentiator and point of value for us.

During high season (June to early September), guests will have the ability to rent the entire residence, which consists of three separate floors of the property. For the shoulder season, guests can rent individual suites/each floor.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Stowaway Suites – exterior (Private album)

We are now accepting booking reservations for next season through our website or email: [email protected]. We are also excited to announce that we will be rehabbing our entire waterfront area this offseason, so our future guests will have an entirely brand-new area with a cabana to enjoy on the Adriatic. Feel free to follow us on Facebook or Instagram for updates or reach out with any questions.”

We chatted with Justin just as he was about to head off with his father to support Croatia at the 2022 FIFA World Cup which starts next week. The two made a pact in 2004 to attend every World Cup together that Croatia was in and have stuck to this plan, attending the 2006 World Cup in Germany, 2014 in Brazil, and 2018 in Russia.

What has the best memory been from the World Cups you have been to with your father?

If you love Croatia, you know you must love “futbol” too, and there is not another experience in the world like attending an international Croatia soccer game in person, in my opinion. To all my fellow Croats, add this to your bucket list as nothing can replicate the feeling of singing along with the Croatian supporters in person as we get ready for battle, just the thought of it sends chills down my spine.

The best memory to-date has to be our experience in Nizhny Novogorod on June 21st, of 2018. For those of you not familiar, Nizhny Novogorod is a six-hour car drive east of Moscow, Russia. 

The Vatreni were preparing to take on the two-time World Cup winners Argentina, and I remember my father and I walking the streets of Nizhny before the game with the rest of the Vatreni supporters in our red and white checkered jerseys surrounding the heckling Argentina fans who claimed we stood no chance. 

As we circled in on the Argentinian fans, one section of Croats screamed “U Boj, U Boj!”, while our section responded, “Za Narod Svoj!!”, in translation, “To the battlefield, to the battlefield, for your people”, it felt like the Croatian fans were going to war against Argentina that day, as we took over the streets of Nizhny and prepared for the rivalry against the almighty Argentinians.

We could not have asked for a better outcome that night as Luka Modrić scored one of the best goals of his entire career and we walked away victorious with a convincing 3-0 win that officially put Croatia on the map as a World Cup contender.

The highlight of the day was when my father and I walked to a local bar after the game with the rest of the Croatian supporters and we asked the Russian bartender to play, “Moja Domovina”, “Nije u Soldima Sve” and many other Croatian bangers on repeat into the early morning. I could not have asked for a better father and son experience.

Croatians living abroad have made investments in Croatia’s booming tourism sector

Before the Croatia vs Argentina match at the 2018 World Cup in Russia (Private album)

How do you think Croatia will perform in Qatar?

I am hopeful and proud to be supporting my Croatian team. Although I am a devoted fan, I don’t think the team gets shown the honor or respect on the world stage, even as the runners up in the 2018 World Cup. In 2018, we were labeled a “dark horse” by so-called analysts, or a team that could be dangerous, and the same is true again in 2022. 

When you have the maestro, Luka Modrić, as the heart of your team, and with the midfield we have, anything is possible! If you watched during the recent UEFA Nation’s League games, it was easy to see that Croatia was finally back in form, we are playing well as a unit and have won our last four matches against strong competition, France, Denmark (twice), and Austria. The Croatian team has some of the best players in the world along with young talent making their way up the ranks. 

Personally, I am really excited to see how Joško Gvardiol and Borna Sosa play. Although, I am not sure how much playing time Luka Sučić will get during this World Cup, the twenty-year-old is Croatia’s future firepower.

Croatia is going to be an absolute force this upcoming World Cup and, in the future, I am not saying this because I am Croatian, or that I am biased, but look out Doha, THE VATRENI ARE COMING!

Croatians living abroad have made investments in Croatia’s booming tourism sector

In Manaus, Brazil in 201 for Croatia vs Cameroon (Private album)

Finally, we asked Justin if he had plans to move to Croatia on a more permanent basis.

“My wife (who is also part Croatian) and I have always talked and dreamed about becoming “digital nomads” in Croatia, but in reality, the nine-hour time difference and the recent expansion of our family here in Los Angeles would make logistics rather challenging. Our dreams of living in Croatia may have to wait until retirement and for another phase of our lives.

Although, my parents are semi-retired and have hopes of spending time during their summers enjoying their homeland and the slower pace of the islands,” he concluded. 

Croatians living abroad have made investments in Croatia’s booming tourism sector

Justin and his father in Zagreb (Private album)

 

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