Authored by the expert who managed and guided the team behind the Ethiopia Property Pack
Yes, the analysis of Addis Ababa's property market is included in our pack
If you're a foreigner thinking about buying a property in Addis Ababa to rent it out, this guide covers everything you need to know about legal ownership, rental yields, tenant demand, and the numbers that actually matter in early 2026.
Ethiopia only recently opened residential property ownership to foreign nationals, so the rules are fresh and the market is adapting quickly.
We constantly update this blog post as new data and regulations emerge, so you're always getting the latest information.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Addis Ababa.
Insights
- Ethiopia's Proclamation No. 1388/2025 now allows foreign nationals to own residential houses for the first time, but you must meet a $150,000 minimum investment threshold and cannot use Ethiopian bank financing.
- Addis Ababa rental yields in 2026 range from 8% to 12% gross, with prime expat areas like Bole delivering 6% to 8% while emerging neighborhoods like CMC can push past 10%.
- Short-term rental occupancy in Addis Ababa averages around 47%, but top-performing properties with backup power and reliable Wi-Fi can achieve 60% to 80% occupancy.
- The average nightly rate for Airbnb listings in Addis Ababa sits at approximately $44, though premium properties in Bole command $84 or more per night.
- Long-term furnished 1-bedroom apartments in Addis Ababa rent for around 50,000 to 130,000 Ethiopian Birr per month, which is roughly $320 to $840 at current exchange rates.
- Foreign owners must budget roughly 20% to 25% of rental income for holding costs, including property management fees of 8% to 12% and reliability upgrades like generators.
- Addis Ababa's rent control framework under Directive No. 7/2024 requires formal lease documentation and registration, making informal agreements riskier than before.
- Vacancy rates for well-managed long-term rentals in Addis Ababa run around 5% to 9%, meaning landlords should budget for about one month empty per year.
- The Ethiopian Birr trades at approximately 155 ETB per US dollar in early 2026, and foreign exchange controls mean you need careful planning to repatriate rental income.
Can I legally rent out a property in Addis Ababa as a foreigner right now?
Can a foreigner own-and-rent a residential property in Addis Ababa in 2026?
As of early 2026, foreigners can legally own residential houses in Addis Ababa and rent them out, thanks to Proclamation No. 1388/2025, which marked the first time Ethiopia allowed foreign nationals to hold residential property.
The main ownership structure available to foreigners in Addis Ababa is direct freehold ownership of residential buildings on leasehold land, since Ethiopian law keeps all land under state ownership while allowing you to own the structure itself.
The most common limitation foreigners face in Addis Ababa is the $150,000 minimum investment requirement, plus the restriction that you cannot finance your purchase through Ethiopian banks and must use foreign currency transferred from abroad.
If you're not a local, you might want to read our guide to foreign property ownership in Addis Ababa.
Do I need residency to rent out in Addis Ababa right now?
You do not need to be a resident of Ethiopia to legally own and rent out a property in Addis Ababa, though you will need to establish a local operating structure with a property manager and bank account.
A local tax identification number is effectively required in Addis Ababa because rental income falls under Ethiopia's Federal Income Tax Proclamation, and you will need to file and pay taxes through the Ethiopian system.
A local Ethiopian bank account is practically mandatory for collecting rent in Addis Ababa since tenants pay in Birr and all local expenses like utilities, repairs, and service charges must be settled locally.
Managing a rental property in Addis Ababa entirely remotely is feasible if you hire a reliable local property manager who can handle showings, tenant screening, lease compliance, and the day-to-day maintenance issues that arise frequently due to power and water reliability challenges.
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What rental strategy makes the most money in Addis Ababa in 2026?
Is long-term renting more profitable than short-term in Addis Ababa in 2026?
As of early 2026, long-term renting in Addis Ababa is generally the simpler and steadier option, while short-term renting can outperform if you invest in reliability features like backup power and professional hosting, but it requires significantly more operational effort.
A well-managed long-term rental in Addis Ababa might generate around 75,000 to 100,000 Birr per month (roughly $480 to $650 or EUR 450 to EUR 610), while a well-managed short-term rental in a prime location could bring in 100,000 to 150,000 Birr monthly ($650 to $970 or EUR 610 to EUR 910), though with higher vacancy risk and operating costs.
Properties in Bole near the airport, Kazanchis in the business district, or buildings with 24/7 security and reliable utilities tend to favor short-term renting in Addis Ababa because they attract the diplomatic, NGO, and business traveler segments who are willing to pay premium nightly rates.
What's the average gross rental yield in Addis Ababa in 2026?
As of early 2026, the average gross rental yield for residential properties in Addis Ababa sits at approximately 8% to 10%, with 9.5% being a reasonable single-number estimate for planning purposes.
The realistic gross rental yield range in Addis Ababa spans from about 6% in prime expat neighborhoods like Bole and Old Airport, up to 12% or more in emerging areas like CMC, Ayat, and Summit where purchase prices have not yet caught up with rental demand.
Smaller units like studios and 1-bedroom apartments typically achieve the highest gross rental yields in Addis Ababa because they attract the largest tenant pool of young professionals, NGO workers, and business travelers who value location and reliability over space.
By the way, we have much more granular data about rental yields in our property pack about Addis Ababa.
What's the realistic net rental yield after costs in Addis Ababa in 2026?
As of early 2026, the realistic net rental yield for a foreign owner using a property manager in Addis Ababa ranges from about 5.5% to 7%, with 6% being a sensible planning figure.
Most landlords in Addis Ababa actually experience net yields between 5% and 7.5%, depending heavily on how well they manage vacancy, maintenance costs, and whether they invested in reliability upgrades that reduce tenant turnover.
The three main cost categories that reduce gross yield to net yield in Addis Ababa are property management fees (8% to 12% of rent), reliability infrastructure like generators and water storage (ongoing maintenance and fuel costs), and the rental income tax that ranges from 10% to 35% depending on your income bracket.
You might want to check our latest analysis about gross and net rental yields in Addis Ababa.
What monthly rent can I get in Addis Ababa in 2026?
As of early 2026, typical monthly rents in Addis Ababa run approximately 50,000 Birr ($320 or EUR 300) for a studio, 80,000 to 130,000 Birr ($520 to $840 or EUR 485 to EUR 785) for a 1-bedroom, and 130,000 to 200,000 Birr ($840 to $1,300 or EUR 785 to EUR 1,215) for a 2-bedroom apartment in decent condition.
A realistic entry-level monthly rent for a decent studio in Addis Ababa ranges from 40,000 to 65,000 Birr, which works out to roughly $260 to $420 or EUR 240 to EUR 390.
A typical mid-range 1-bedroom apartment in Addis Ababa commands 80,000 to 130,000 Birr per month, approximately $520 to $840 or EUR 485 to EUR 785, depending on neighborhood and building quality.
A mid-to-high range 2-bedroom apartment in Addis Ababa rents for 150,000 to 250,000 Birr monthly, which translates to $970 to $1,615 or EUR 905 to EUR 1,510, with the premium end reserved for furnished units in Bole or Old Airport with reliable utilities.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Addis Ababa.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Ethiopia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What are the real numbers I should budget for renting out in Addis Ababa in 2026?
What's the total "all-in" monthly cost to hold a rental in Addis Ababa in 2026?
As of early 2026, the total "all-in" monthly cost to hold a typical rental property in Addis Ababa runs approximately 20% to 25% of your monthly rent, which for a 1-bedroom earning 100,000 Birr would mean around 20,000 to 25,000 Birr ($130 to $160 or EUR 120 to EUR 150) in holding costs.
The realistic monthly cost range for most standard rental properties in Addis Ababa spans from 15,000 to 40,000 Birr ($97 to $260 or EUR 90 to EUR 240), depending on building quality, age, and what reliability systems you maintain.
The single largest contributor to monthly holding costs in Addis Ababa is typically property management fees combined with reliability maintenance, because paying someone to handle day-to-day issues plus keeping your generator fueled and water systems working costs more here than in cities with stable utilities.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Addis Ababa.
What's the typical vacancy rate in Addis Ababa in 2026?
As of early 2026, the typical vacancy rate for well-managed long-term rentals in Addis Ababa sits at approximately 5% to 9%, which translates to roughly 0.6 to 1.1 months empty per year.
Landlords in Addis Ababa should realistically budget for about 1 month of vacancy per year, because even in high-demand neighborhoods, tenant turnover happens and finding quality replacements who pass screening takes time.
The main factor that causes vacancy rates to vary between Addis Ababa neighborhoods is building reliability, since units without backup power, consistent water supply, or proper security can sit empty much longer than similar units in buildings where these basics work every day.
Peak tenant turnover in Addis Ababa typically occurs around September and October, coinciding with the Ethiopian New Year and the end of the rainy season, when many leases naturally expire and tenants relocate for work or family reasons.
We have a whole part covering the best rental strategies in our pack about buying a property in Addis Ababa.
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Where do rentals perform best in Addis Ababa in 2026?
Which neighborhoods have the highest long-term demand in Addis Ababa in 2026?
As of early 2026, the three neighborhoods with the highest overall long-term rental demand in Addis Ababa are Bole (near the airport and commercial strip), Kazanchis (the business and office corridor), and CMC/Gerji (newer housing stock popular with both locals and expats).
Families looking for long-term rentals in Addis Ababa tend to concentrate in CMC, Ayat, and Summit, where newer developments offer more space, a calmer residential feel, and increasingly good access to international schools and amenities.
Students in Addis Ababa generate the strongest rental demand around Sidist Kilo and Arat Kilo near Addis Ababa University, as well as parts of Piassa where older but centrally located apartments remain affordable.
Expats and international professionals consistently prefer Bole, Old Airport, Kazanchis, and Sar Bet in Addis Ababa, where proximity to embassies, international organizations, and the airport combines with better building standards and security.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Addis Ababa.
Which neighborhoods have the best yield in Addis Ababa in 2026?
As of early 2026, the three neighborhoods with the best rental yields in Addis Ababa are CMC/Gerji, Megenagna, and parts of Summit/Ayat, where purchase prices remain more reasonable relative to the strong rental demand.
The estimated gross rental yield range in these top-yielding Addis Ababa neighborhoods runs from approximately 9% to 12%, compared to the 6% to 8% you might achieve in premium areas like Bole or Old Airport.
The main characteristic that allows CMC, Megenagna, and Summit to achieve higher yields than Bole or Old Airport is that these neighborhoods attract strong local professional demand at good rent levels, while their purchase prices have not yet been pushed up by expat premium pricing.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Addis Ababa.
Where do tenants pay the highest rents in Addis Ababa in 2026?
As of early 2026, the three neighborhoods where tenants pay the highest rents in Addis Ababa are Bole (especially near the airport), Old Airport, and Kazanchis, where monthly rents for quality apartments can reach 200,000 to 400,000 Birr ($1,300 to $2,600 or EUR 1,215 to EUR 2,430).
A standard 2-bedroom apartment in these premium Addis Ababa neighborhoods typically rents for 180,000 to 300,000 Birr per month, which works out to $1,160 to $1,935 or EUR 1,085 to EUR 1,810.
The main characteristic that allows Bole, Old Airport, and Kazanchis to command the highest rents in Addis Ababa is their concentration of international organizations, embassies, and corporate offices, which creates a dense pool of expat tenants with housing allowances who prioritize security, location, and building reliability over price.
The typical tenant profile in these highest-rent neighborhoods includes diplomats, NGO staff, UN employees, multinational executives, and diaspora Ethiopians returning for extended work assignments, all of whom expect furnished units with backup power, fast internet, and 24/7 security.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Ethiopia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What do tenants actually want in Addis Ababa in 2026?
What features increase rent the most in Addis Ababa in 2026?
As of early 2026, the three property features that increase monthly rent the most in Addis Ababa are backup power systems (generator or inverter), reliable water supply with storage, and 24/7 security with good building management, because these solve the daily reliability problems that tenants in this city worry about most.
A functional backup power system alone can add a 15% to 25% rent premium in Addis Ababa, since power outages are common and tenants, especially expats and remote workers, will pay significantly more to avoid the disruption.
One commonly overrated feature that landlords invest in but tenants do not pay much extra for in Addis Ababa is high-end decorative finishes, because most tenants care far more about whether the utilities work reliably than whether the kitchen has granite countertops.
One affordable upgrade that provides strong return on investment for landlords in Addis Ababa is installing a quality Wi-Fi router and ensuring fiber internet connectivity, since this costs relatively little but matters enormously to the business travelers and remote workers who can pay premium rents.
Do furnished rentals rent faster in Addis Ababa in 2026?
As of early 2026, furnished apartments in Addis Ababa typically rent 30% to 50% faster than unfurnished ones because the tenant segments willing to pay premium rents, such as expats, NGO workers, and business travelers, almost universally need move-in-ready units.
Furnished apartments in Addis Ababa command a rent premium of approximately 20% to 40% over comparable unfurnished units, though this premium only materializes if the basics like power backup and water reliability are also in place.
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How regulated is long-term renting in Addis Ababa right now?
Can I freely set rent prices in Addis Ababa right now?
Landlords in Addis Ababa have moderate freedom to set initial rent prices, though the city now operates under a rent control and administration framework established through the Residential House Rent Control Proclamation and Addis Ababa's Directive No. 7/2024, which means you need formal lease documentation and should expect more oversight than in the past.
Rent increases during a tenancy in Addis Ababa are subject to the directive's administrative framework, and while market-rate negotiations still happen, landlords who ignore the formal registration and contract requirements face higher enforcement risk if disputes arise.
What's the standard lease length in Addis Ababa right now?
The standard lease length for residential rentals in Addis Ababa is typically 1 year, especially in the professional and expat tenant segment, though shorter terms exist for furnished units targeting temporary stays.
Security deposits in Addis Ababa are typically negotiated but commonly range from 1 to 3 months of rent, which for a 1-bedroom at 100,000 Birr monthly would mean 100,000 to 300,000 Birr ($645 to $1,935 or EUR 605 to EUR 1,810), and the rent administration directive encourages landlords to align their deposit terms with compliant lease standards.
At the end of a tenancy in Addis Ababa, the security deposit should be returned within a reasonable period after accounting for any damages beyond normal wear and tear, though the specific timeline and deduction rules are best documented in your written lease to avoid disputes.
We made this infographic to show you how property prices in Ethiopia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
How does short-term renting really work in Addis Ababa in 2026?
Is Airbnb legal in Addis Ababa right now?
Airbnb-style short-term rentals operate at scale in Addis Ababa with over 1,300 active listings in early 2026, which strongly suggests they are not broadly prohibited, though the regulatory framework is less formalized than in many Western cities.
Addis Ababa does not have a single, widely documented license-and-cap system like European cities, but you may need some form of local business or tourism registration if operating at scale, and checking with a local manager who knows current enforcement practices is highly recommended.
There is no clear publicly documented annual night limit for short-term rentals in Addis Ababa, though building rules and condominium regulations often matter more than city-level restrictions in practice.
The most common consequence for non-compliant short-term rental operation in Addis Ababa is typically building-level enforcement, meaning your condo association or building management may restrict your activity, rather than city authorities issuing formal penalties.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Addis Ababa.
What's the average short-term occupancy in Addis Ababa in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Addis Ababa sits at approximately 40% to 50%, with 47% being a reasonable single-number estimate based on AirDNA market data.
The realistic occupancy range for most short-term rentals in Addis Ababa spans from about 30% for average listings to 60% to 80% for top-performing properties that have solved the reliability challenges with backup power, fast internet, and professional hosting.
Peak occupancy months for short-term rentals in Addis Ababa typically include September through November and January through March, coinciding with the Ethiopian New Year celebrations, the dry season, and the African Union summit periods that bring business and diplomatic travelers.
The lowest occupancy months for short-term rentals in Addis Ababa usually fall during the rainy season from June through August and around December, when both tourism and business travel slow down significantly.
Finally, please note that you can find much more granular data about this topic in our property pack about Addis Ababa.
What's the average nightly rate in Addis Ababa in 2026?
As of early 2026, the average nightly rate for short-term rentals in Addis Ababa is approximately $40 to $50 (6,200 to 7,750 Birr or EUR 37 to EUR 47), with $44 being a reasonable market average according to AirDNA data.
The realistic nightly rate range in Addis Ababa spans from about $25 to $30 (3,900 to 4,650 Birr or EUR 23 to EUR 28) for entry-level listings, up to $84 or more (13,000+ Birr or EUR 78+) for premium properties in Bole with excellent amenities and reviews.
The typical nightly rate difference between peak season and low season in Addis Ababa runs approximately $10 to $15 (1,550 to 2,300 Birr or EUR 9 to EUR 14), though professional hosts using dynamic pricing can capture larger spreads by optimizing for high-demand events.
Is short-term rental supply saturated in Addis Ababa in 2026?
As of early 2026, the short-term rental market in Addis Ababa is moderately competitive but not fully saturated, with approximately 1,300 active listings and occupancy rates around 47%, suggesting demand exists but is not unlimited.
The number of active short-term rental listings in Addis Ababa appears to be growing steadily as more property owners recognize the opportunity, though the market rewards quality over quantity, meaning new listings without reliability features struggle to compete.
The most oversaturated neighborhoods for short-term rentals in Addis Ababa are parts of Bole near the airport corridor, where many similar furnished apartments compete for the same business traveler segment without clear differentiation.
Neighborhoods in Addis Ababa that still have room for new short-term rental supply include well-located parts of Kazanchis, Sar Bet, and CMC, where demand from business travelers and longer-stay guests remains underserved by quality listings with reliable utilities.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Addis Ababa, we always rely on the strongest methodology we can, and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Ethiopia Ministry of Justice (Proclamation 1388/2025) | Official government source for Ethiopian legal and policy updates. | We used it to confirm that foreigners can now own residential houses in Ethiopia. We anchored our legal ownership section to this official proclamation trail. |
| Ethiopia Ministry of Justice (Property Sector) | Official legal portal organizing proclamations and property sector rules. | We used it to confirm Addis Ababa's rent control framework exists. We referenced it for the regulatory context around long-term rentals. |
| Federal Income Tax Proclamation No. 979/2016 | Official government source codifying Ethiopia's rental income taxation. | We used it to state that rental income is taxable at 10% to 35%. We factored this into our net yield calculations. |
| Dablo Law Firm | Professional legal analysis tied to official proclamation references. | We used it to translate legal text into practical landlord requirements. We relied on their Directive No. 7/2024 breakdown for compliance guidance. |
| National Bank of Ethiopia | Central bank that sets binding banking and foreign exchange rules. | We used it to explain why collecting rent and moving money out requires planning. We translated this into practical banking setup advice. |
| AirDNA | Most widely used STR analytics provider with transparent methodology. | We used it to estimate short-term occupancy, nightly rates, and market saturation. We treated it as the primary STR data source for Addis Ababa. |
| AirROI | Structured STR dataset with transparent metrics and clear methodology. | We used it to cross-check AirDNA's occupancy and ADR figures. We did not treat it as the sole source but as directional validation. |
| Numbeo | Transparent crowdsourced index with clear sample size and update timing. | We used it to build a consistent rent, price, and yield picture for Addis Ababa. We cross-checked rent levels against listings portals. |
| Ethiopia Property Centre | Aggregates many active listings, useful for real market-range checks. | We used it to cross-check whether Numbeo's rent levels match real asking prices. We expressed rents in Birr ranges matching local quoting practices. |
| Trading Economics | Widely trusted source for currency exchange rates and economic data. | We used it to convert between Ethiopian Birr, USD, and EUR throughout the article. We applied the current rate of approximately 155 ETB per USD. |
We have made this infographic to give you a quick and clear snapshot of the property market in Ethiopia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
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