Recommendations shared by Maia Daljajev, Head of Arco Vara’s Estonian Brokerage Unit

1. If one were to purchase an apartment in a good building in the Tallinn’s City Centre and sell it after 5 or 10 years, the real estate will still be liquid and its value will have increased over time.

2. In a new building, an apartment can be purchased unfurnished, allowing interior decorating to be done according to one’s own vision. If desired, all apartment furnishings, i.e. home appliances, etc., can also be purchased from the real estate developer. The cost of doing so will likely be cheaper than furnishing the apartment on one’s own.

3. The cost of a decent two room apartment in Tallinn’s City Centre, in a newly completed building, is between EUR 150,000-200,000. Apartments are more expensive in Tallinn’s Old Town, with its unique milieu, and in buildings that have been the subject of high quality renovation and which possess culturally historic value. In the case of apartments that are too cheap, hidden defects may later become apparent.

4. EUR 100,000 will not purchase a new apartment in Tallinn’s City Centre, although in the Mustamäe and Lasnamäe districts a small apartment can be purchased for around EUR 50,000. A good investment may turn out to be the purchasing of parking spaces in the City Centre.

5. When purchasing a new apartment it does not pay to save money at the expense of a parking space and storeroom, since the deficit in parking spaces in Tallinn’s City Centre worsens with each passing year. If the apartment owner does not need the parking space himself, he can lease it to someone else for EUR 60-100 per month.

6. In the case of older apartments, the condition of the entire building needs to be assessed and it must be determined what the current residents have invested in and what is already available from the invested money. One might ask the apartment association board about when the seller of the apartment is planning to perform the promised maintenance works.

7. In the last year, real estate prices in Tallinn’s historic urban regions with timber buildings have grown significantly faster than the market average. When investing, one should therefore be cautious when acquiring apartments in old or partially renovated timber buildings located in culturally valuable areas.

8. The rental market is always active in Tallinn’s City Centre. Small rental apartments are also a very hot item in proximity to institutions of higher education, in Mustamäe and Lasnamäe. The rate of return on rental apartments is currently 5-8%, although over the last three years lease prices have grown by nearly 60% and growth is continuing.

9. Since renovation costs must be borne by the investor, without knowing whether they will be recouped or not, the costs of and decisions regarding the biggest expenditures could be left to the buyer to make on their own. One should refrain from performing renovations and reconstructions which the buyer will likely end up tearing out anyway.

10. It is quite common that real estate is purchased as an investment in the name of a company. This simplifies accounting and the payment of taxes is calculated from rent and sales.