Rent it out or sell?

Start with the yield

Gross yield = annual rent divided by the apartment’s value. In Estonia’s larger cities it typically lands between 3% and 6% — higher in smaller, cheaper areas, lower for expensive city-centre flats.

Get your own numbers from two estimates: what rent your apartment would earn and what it would sell for. City-level yields are compared in the rental section of our market report.

From gross to net: what survives

• Vacancy between tenants — budget about one month a year.
• Repairs and wear: refresh between tenants, appliances, the renovation fund.
• Taxes: 20% of rental income is a tax-free allowance; the rest is taxed.
• Your time — or the agent's fee (one month's rent per tenant found).

Rule of thumb: net often lands 1–2 percentage points below gross. A 4% gross yield is realistically ~3% net — plus (or minus) the change in the apartment’s value.

When letting wins

• The yield is decent for the area and tenant demand is strong (university, jobs).
• You believe in long-term price growth — rent then tops up the appreciation.
• You might return to the apartment yourself (work, children, parents).
• The remaining mortgage is small or cheap — rent covers costs with margin.

When selling wins

• You need the capital elsewhere: a new home, a business, a more diversified portfolio.
• The building faces major costs (roof, heating, façade) — they eat years of yield.
• The yield is low and you don’t believe in the area’s growth.
• You don’t want the landlord role: turnovers, late-night calls, arrears risk.

A tax nuance: selling your own permanent home is generally income-tax-free for a private person; gains on an investment apartment are taxed. If the apartment is still your home, the tax window favours selling sooner rather than after years of letting.

The third way: try a year

If in doubt, let it for a year and review the real numbers — actual rent, actual costs, actual feeling. You can always sell later. The practical letting steps and a proper rental agreement keep the risks under control.

Frequently asked questions

What is a good rental yield in Estonia?

A gross yield of 3–6% a year is typical; above 5% is already good in the larger cities. Net often lands 1–2 percentage points lower after costs and taxes.

Do I lose the tax exemption on sale if I rent it out?

Selling your own permanent residence is generally income-tax-free. If the apartment has been let for years and is no longer your residence, the gain may be taxed — factor this into the timing.

How much vacancy should I budget?

A conservative rule of thumb is one month a year — turnover, small repairs and finding the next tenant. A well-priced apartment may see less.