Highest Rental Yield in Tallinn's Residential Areas
An analysis by the real estate portal Kinnisvara24 shows that apartments with the highest expected rental yields in Tallinn are located in the Mustamäe and Kalamaja districts, where the average annual expected rental yield is 5-6 percent.
Kinnisvara24 marketing director Martin Matsberg pointed out that apartment prices in residential areas have declined slightly this year. "The most popular rental apartment area this year is Mustamäe, which also has the highest expected rental yield. More than average rental apartment offerings have been available this year in the Kalamaja and Kadriorg districts as well."
Tallinn districts where the most rental apartments are offered this year:
- Mustamäe. A total of 50 rental offers. Expected rental yield 6.2%.
- Kalamaja. 42 rental offers. Expected rental yield 5.2%.
- Kadriorg. 31 rental offers. Expected rental yield 3.5%.
- Lilleküla. 29 rental offers. Expected rental yield 4.5%.
- Uus Maailm. 24 rental offers. Expected rental yield 4.7%.
In the previous year, the most rental apartments were offered in Kalamaja and Mustamäe. "Compared to 2022, the number of rental offers on the portal has grown by approximately 13% this year," said Matsberg.
Tallinn districts where the most rental apartments were offered in July 2022:
- Kalamaja. A total of 36 rental offers. Expected rental yield 5.3%
- Mustamäe. 29 rental offers. Expected rental yield 5.8%
- Kadriorg. 26 rental offers. Expected rental yield 4.5%
- Lilleküla. 18 rental offers. Expected rental yield 5.2%
- Pelgulinn. 12 rental offers. Expected rental yield 5%.
According to Algis Liblik, a real estate broker at 1Estate Kinnisvara, when analyzing rental yields, one should evaluate not only the district but also lending conditions and the apartment purchase price. "In general, it can be noted that due to the rapid price increases of the past couple of years, the rental yield of apartments in the city center and its immediate surroundings is no longer as good as in some districts further away from the center. For example, the exclusive waterfront areas of the City Center and Kalamaja, Kalaranna and Noblessner, are primarily suitable for those investors who are looking for liquidity and do not focus so much on cash flow yield but rather count on profits from real estate value growth, which these areas offer."
According to Liblik, Uus-Veerenni has become a new high-demand district in recent years, as this is where the unicorn companies Bolt and Wise have their offices. "The sale prices in that area are also growing at a rapid pace and therefore the yield, just like with other new developments, falls between 4-5%. Those who want to find a 6% or higher rental yield based on cash flow calculation need to look for good deals among older apartments. Such apartments can be found, for example, in Kopli or Sikupildi."
