Top 5 least profitable major cities in Africa to become a landlord mid-2024

Africa’s real estate market is highly diverse, with each area presenting distinctive opportunities and problems. Economic stability, urbanization rates, government policies, and housing demand have contributed to the growing gross rental yields, across major cities on the continent.

Cities such as Lagos, Nairobi, Johannesburg, and Accra are frequently the focus of investors, with significant potential returns due to expanding populations and increased demand for both residential and commercial areas.

Gross rental yield is computed by taking a property’s yearly rental revenue, dividing it by the purchase price, and multiplying the result by 100 to show the percentage.

This measure represents the possible return on investment (ROI) from rental revenue, eliminating expenditures like maintenance, taxes, and management fees.

As a result, a landlord is better off with a larger gross rental return. A larger yield increases the landlord’s return on investment. This however, is not always the case, as some cities simply boast very low gross rental yields

Investing in African real estate offers both obstacles and opportunity. While certain markets have high gross rental rates, investors must deal with concerns such as political unrest, legal difficulties, and economic volatility.

Naturally, anywhere from 5 and 8% is considered a good gross rental yield, while 7 to 8% or beyond are the best yield on property investment you can hope for. With that said, here are the top 5 least profitable major cities in Africa to become a landlord for the second half of 2024, according to Numbeo’s updated gross rental yield index for the half year.

Much like the first half, 4 of the 5 cities all fall within the North African region with the exception of Ethiopia’s Addis Ababa. SEE LIST HERE….

It is also important to note that Numbeo for this list ranks major cities, particularly the economic hubs across Africa and not the entirety of the continent.