Justin;
I built my son a miniature trade gun when he was about five, or six, from an old .410 barrel that I added the flats, and the wedding rings to. It was cute as a bug, and shot amazingly well for its size. But, he outgrew it in like a year and a half. So, my advice would be to either build it a little large for the kids current needs, and let them grow into it.
I still have the little tradegun just because it so cute hanging on the wall, and the kid has no interest in it.
Hungry Horse