Moving to Estonia means a lot to many. Among the top things in the mind of someone planning a move to Estonia is a possibility of turning own life around and working all in earnest for self development. But did you know that to achieve any of the ambitions one has to find a base for, a humble abode of sorts from where to meditate, relax and enjoy. Therefore, the need for a good housing in Estonia can never be overemphasised and anyone gearing up to live in Estonia just needs to prioritise it.
The lucrative real estate / housing market in Estonia
Real estate in Estonia is a wise investment. Out of all countries in the world, Estonia does not seem like a country to make real estate investments. It is a highly underrated country which is why it is the last country anyone could think of purchasing a house. Estonia is not a bad destination. On the contrary, it may come as a surprise that purchasing property or renting in Estonia is not different from doing it in Italy or even Spain. That is how huge and successful the real estate market is in Estonia.
When planning to purchase or engage property rental in Estonia, understand how the real estate market is at that particular time. Know what you want before taking action. Also, learn about the processes of buying and renting. Lastly, contemplate the costs you will incur and the need for a real estate agent. Is this not a good way of understanding how things work?
Real Estate Market in Estonia
Estonia has not been in the lead when it comes to real estate. That is why many investors bypass this country without giving it a second thought. For many years, Estonia did not allow foreign real estate ownership. That has since changed. Foreigners as we speak have the green light to invest in Estonia as much as they like.
The fact is real estate is expensive. This is the same with Estonia. Purchasing a brand-new home will cost you more than someone who is renting. Some people consider taking payday loans to cover the costs. Others take out a mortgage loan. The advantage is you can use your credit card to make payments. With that, you can be certain you will get the home of your dreams.
Rental in Estonia
Interestingly, most Estonian houses don’t have a specified term for a rental. It means that there is no minimum term. For instance, you can find rentals for daily rent. You may also come across a lease either for a specified time or unspecified.
In Estonia, fixed-term leases are always open for renegotiation. When you want to leave, you must give three months’ notice. The best part is you can discuss this with the landlord and agree to a shorter notice period.
For unspecified leases, you have the liberty to leave the house at any time. But it would be kind if you would at least give the landlord a notice agreeable to both of you. However, it is interesting that the majority of the rentals operate without a lease. Engaging in such rentals can be pretty risky for you may end up losing a lot.
It would work out best if you are aware of your landlord. By doing that you will know what the landlord expects from you and vice versa. Never engage in a verbal contract. Ensure you receive the contract in writing and understand the parties to sign it.
When renting a house in Estonia, you have to pay a normal month’s rent plus a deposit. You will make payments after signing your lease and not before. The moment you want to vacate the property, the landlord will refund the deposit. However, if there are any damages on the property, there will be deductions from the deposit.
Moreover, n Estonia, you can get houses for rent in Facebook Groups, Facebook Marketplace, and some real estate portals. Unfortunately, for internationals, it may be difficult to grasp the content as they are mainly written in English. However, before you choose any rental property in Estonia, you should consider the following:
The Rights and Responsibilities of the Landlord and the Tenant
You need to read and understand your rights and responsibilities as a tenant. Apart from that, you need to know the responsibilities of the landlord. It should not just end with receiving the rent. The landlords also have some responsibilities. Remember, all these should be aligned with the Law of Obligations Act in Estonia.
Expectations and Communication for Rental in Estonia
As a tenant, you need to have a conversation with your landlord to know what is expected of you. Also, in case of anything, you need to immediately notify the landlord. Do not wait until it is too late that you cannot solve the issue.
Paperwork for Rental in Estonia
As I said earlier, ensure that you read the rental contract or agreement carefully before signing. In case you have a question, you can tell the landlord to clarify that clause. Also, ensure that you are fully aware of the utility costs.
Buying a House in Estonia
Without a doubt, Estonia provides a convenient platform for real estate investment opportunities. This is for both foreigners and Estonian citizens. As such, if you are planning to purchase a house in Estonia, you can do so without any hesitation.
It is quite impressive that the process of buying a house in Estonia is flawless. It is a straightforward process without any complications. This is thanks liberation of real estate laws by the government of Estonia. In the past, these laws were not friendly. Rather, they were cumbersome making many people not consider engaging in the real estate market.
When you come across a home that you are interested in, identify its owner first. The next step is to check for registration of the property with the Estonian Land Register. Bear in mind that Estonian laws will not consider any property without registration.
Interestingly, Estonia does not provide property deeds. What makes the property valid is the submission of a notarized application normally at the Land Register. It is the transfer of ownership to you as the buy done in the Land Register Book that makes the purchase valid.
Getting a mortgage in Estonia
As we all know, purchasing a home is not a walk in the park. It requires a lot of financing. That is why you can take a mortgage in Estonia to purchase a home. However, institutions have rules when it comes to mortgages. Estonia comprises two major types of mortgages. They are the loan-to-value (LTV) and the debt service-to-income (DSTI) ratio.
With this type of mortgage, the final price of the home is key. This is because the amount loaned is subdivided out of the final price of the home. That will act as the collateral. This is the most common type of mortgage in Estonia.
Debt service-to-income (DSTI) ratio
For this mortgage, the lending institution subdivides the monthly principal inclusive of the interest payments. This calculation is usually on your net income every month. What makes this type of mortgage interesting is that the ratio never goes beyond 50%.
In Estonia, there is a standard mortgage term. The maximum term is normally 30 years. Basically, this means within those 30 years you should have completed all pending mortgage repayments. Obviously, this is from the time you receive the loan.