The Tallinn market for relatively new rental apartments has undergone changes over the past two to three years; the profitability of two-room apartments, which were previously valued higher, is now inferior to the profitability of three-room apartments, said consultant Helena-Laura Lesment. “If you compare the income per square meter, the monthly rent a three-room apartment in a prestigious new building in close proximity to the city center should be about a fifth higher than a two-room apartment, but, in fact, the difference can be much greater,” comments the 1Partner consultant and gives an example – finding a tenant for a new two-room apartment with a monthly a fee of 800 euros can be much more difficult than for a three-room apartment in the same house for 1300-1500 euros. Helena-Laura Lesment explains that a large number of two-bedroom apartments have been purchased by rental property investors over the past five years, which has led to an oversupply of this class, so owners will either have to be patient or lower prices, reducing expected income. “There are clearly fewer new three-room apartments on the rental market, and there is even a slight shortage of them,” says Lesment, emphasizing that this applies to apartments located in newer buildings. According to the expert, the demand for three-room apartments is generated by a separate group of families who have until now postponed the purchase of a new home because they did not want to compromise on the quality of everyday life. Regardless of the size, apartments furnished with the help of professional designers have an advantage in the rental market. “People’s expectations for both interior design and quality are much higher than they were five to ten years ago,” emphasizes the experienced consultant. In the case of older apartments for rent and located in so-called “bedroom” areas, a 2-room apartment for 400-450 euros is still a very popular product. “There is, of course, no such excitement as two years ago, when several tens of thousands of war refugees arrived in the Estonian capital in a short period of time, but even now the search for a tenant should not take too much time,” comments Helena-Laura Lesment.
