How to Buy Investment Property in Mongolia as a Foreigner

One of the first questions many people ask when considering buying real estate in Mongolia is whether foreign ownership is even allowed.

YES - Foreigners are allowed to own property in Mongolia, but there are certain conditions. Foreigners are permitted to own buildings and apartments in Mongolia, but not the land beneath them. Land ownership is restricted to Mongolian citizens. However, foreigners can lease land for specific purposes, with lease terms typically ranging from 15 to 60 years, depending on the intended use and agreements with local authorities.

Investing in Mongolia's Real Estate Market

Mongolia's real estate market, particularly in the capital city of Ulaanbaatar, has been experiencing growth, driven by urbanization and economic development. The city's central districts, such as Sukhbaatar and Khan-Uul, are popular for residential and commercial investments. These areas offer modern amenities and are in proximity to business centers, making them attractive for both long-term residents and short-term visitors.​

The rental market in Ulaanbaatar shows promising returns. According to our recent research, average gross rental yields for residential properties in Mongolia are around 11%. This can make Mongolia an appealing destination for foreign investors seeking rental income.

Rental Yields

Gross rental yields in Mongolia for long-term tenants hover around 11%. The real NET yields are likely somewhere around 9% - 10%.

• Ulaanbaatar dwellings earn a rental yield between 7.80% to 13.71%, with an average of 11.07%.

For those interested in short-term rentals, platforms like Airbnb have a presence in Ulaanbaatar. As of early 2025, the city had approximately 527 active listings, with an average occupancy rate of 50% and a daily rate of $42. While the short-term rental market is still developing, it offers potential for growth, especially during peak tourist seasons.

Popular investment destinations in Mongolia (2025):

Ulaanbaatar - As the capital and economic hub of Mongolia, Ulaanbaatar offers the widest range of real estate investment opportunities. The city is home to over 45% of the country's population, and demand for residential and commercial property continues to grow. Central districts like Sukhbaatar, Chingeltei, and Khan-Uul are especially attractive to investors due to their modern infrastructure, government offices, business centers, and cultural institutions. These areas see consistent demand from both local professionals and expats, making them ideal for long-term rentals and commercial leasing.

Erdenet - Mongolia's second-largest city, Erdenet, is known for its massive copper mining industry. While smaller and quieter than the capital, it presents solid investment potential in residential housing, particularly for workers and professionals tied to the industrial sector. Infrastructure developments and steady employment in the region make it a stable market for long-term rentals.

Darkhan - Located in northern Mongolia, Darkhan is an emerging urban center with a growing population. Its strategic location near the Russian border makes it a key industrial and transportation hub. Investors may find opportunities in affordable housing developments and commercial properties supporting local businesses and logistics services.

Khovd - As a regional center in western Mongolia, Khovd is seeing increasing attention from eco-tourism and rural development initiatives. Its unique culture and scenic location near the Altai Mountains provide niche opportunities for hospitality investments such as boutique lodges, eco-resorts, and short-term rentals targeting adventure travelers.

Terelj National Park Area - Located just outside Ulaanbaatar, the Terelj region is a popular destination for both tourists and city dwellers seeking nature retreats. Investment in vacation homes, guesthouses, or sustainable tourism properties here is growing, supported by improved road access and year-round visitor interest.

Finding Properties for Sale

Here is the most popular property portal in Mongolia:

• http://Unegui.mn

If you're serious about buying or investing in Mongolia, be sure to contact local brokers and visit the properties in person. This will give you a better understanding of the market and help you decide whether to move forward with a purchase or determine that it's not the right fit for you.

Due Diligence and Sales Contract

Due diligence is a critical step when purchasing real estate, especially for foreign buyers. This process includes verifying the legal ownership of the property, checking for any encumbrances such as mortgages, tax debts, or disputes, and ensuring the land use rights and zoning regulations are aligned with the buyer's intended purpose. In Mongolia, land is owned by the state, but private individuals and entities can own structures and lease land for up to 60 years, with the option to renew.

The title search is typically conducted through the General Authority for State Registration, which maintains records of ownership and legal status. It's advisable to work with a local lawyer or licensed real estate agent to navigate the legal and bureaucratic aspects of the transaction.

The purchase process generally involves a formal sales contract, known as a "Hudaldakh, Hudaldan Avakh Gereen" (Sales-Purchase Agreement), which details the property description, sale price, payment method, transfer date, and responsibilities of each party. This agreement must be notarized and submitted to the local registration office for the official transfer of ownership. The buyer must also ensure that all taxes and transaction fees are paid before the property is legally registered in their name.

While the Mongolian legal system offers basic protections for property transactions, buyers should be thorough in their due diligence, especially given the evolving nature of property laws and foreign ownership regulations.

Financing for Non-Residents

Financing real estate as a foreigner in Mongolia can be challenging, as mortgage options for non-residents are limited. Most Mongolian banks and financial institutions primarily offer home loans to Mongolian citizens or permanent residents. Foreign buyers are generally required to finance real estate purchases through personal funds or obtain financing from international banks or private lenders based outside of Mongolia.

If a foreigner does qualify for a mortgage in Mongolia, typically through a locally registered company or in partnership with a Mongolian national, they must meet strict requirements. These include providing proof of stable income, a solid credit history, and a clear investment purpose. Loan-to-value (LTV) ratios are usually conservative, often requiring a down payment of 30% to 50% of the property's value.

Interest rates in Mongolia can be relatively high compared to those in developed markets, reflecting the country's economic environment and inflation levels. Given these limitations, many foreign investors opt for all-cash purchases or explore creative financing strategies such as forming joint ventures with local partners.

Property Buying Costs and Taxes in Mongolia

Further reading: Guide to Property Taxes in Mongolia.