In August 2024, a report published by Africa Business Insider listed the top five most profitable major cities in Africa for landlords.
The report highlighted Durban and Johannesburg in South Africa as cities offering some of the highest gross rental yields on the continent.
It noted that a landlord’s revenue is primarily determined by the property’s Gross Rental Yield, which measures rental income relative to the property’s value.
Read the full story originally published on August 20, 2024.
The fundamental incentive behind any investment is its potential for profit, and the real estate industry in African cities is no exception.
Every landlord’s primary motivation is the amount of money that the rent on his or her property(s) yields periodically.
This revenue is based on the property’s Gross Rental Yield.
Gross rental yield is an important metric for real estate investors since it measures the profitability of rental properties. In Africa, where the real estate market is diverse and dynamic, gross rental yield becomes increasingly important as investors seek to negotiate the continent’s distinct economic climates.
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.
It goes without saying that a greater gross rental yield is desirable. A higher yield indicates more ROI for the landlord. With that in mind, here are the 5 greatest major African cities to become a landlord, according to Numbeo’s updated gross rental yield index for the half year.
Compared to the list during the first half of the year, Cameroon’s Douala now tops South Africa’s Durban. However, with the exception of marginal changes ito the indexes, not much has changed. The top 5 cities with the best gross rental yield in Africa during H1 2024 remain the same.
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.
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