Everaus Kinnisvara CEO Janar Muttik was recently a guest on Äripäev Radio’s Portfolio Growth Plansshow, which focuses on investment trends and opportunities.
Muttik said that many people have redirected the money they previously had in real estate into loans. “It’s more straightforward, so the numbers are more concrete,” he remarked. Where loans are concerned, returns also meet investors’ expectations. While double-digit returns on rented apartments are now more of a dream, they remain a reality for loans.
Of course, a distinction must be made between loan types: whereas secured loans are guaranteed by an asset, usually real estate, unsecured loans are backed by the reputation and trustworthiness of the developer. The interest rate on unsecured loans remains around 12%. “The downside is that investor interest is waning,” says Muttik. Secured loans present less of a risk, which is why their returns remain between 8-10%.
The radio show covered a range of issues: choosing a suitable block of land for investment; finding a reliable developer; the glut of stock-office commercial buildings and mini-warehouses; and the cost-effectiveness of doing business in semi-detached homes. The show is hosted by Simo Sepp.
