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
Rental yields in Addis Ababa in 2026 vary widely by neighborhood, property type, and whether you're looking at furnished or unfurnished units.
This blog post breaks down gross and net yields, vacancy rates, costs, and the best areas to invest in Addis Ababa right now.
We constantly update this article, so you're always getting the freshest data on Addis Ababa rental yields.
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
- Average gross rental yield in Addis Ababa in 2026 sits around 7.5%, but smaller apartments in Megenagna or Gerji can push above 9%.
- Net yields typically drop to around 5% after rental income tax, maintenance, and the city's power and water intermittency costs.
- Addis Ababa shows a 3 to 5 percentage point yield spread between prestige areas like Bole (5 to 6%) and high-demand neighborhoods like CMC (8 to 10%).
- Furnished rentals in expat areas like Kazanchis see 8 to 12% vacancy, compared to 4 to 7% for unfurnished mid-market units.
- Studios and one-bedrooms deliver the highest gross yields (8 to 10%), while villas compress to 4.5 to 7% due to higher capital values.
- Property Tax Proclamation No. 1365/2025 signals more formalized recurring taxation, so don't model net yields as if property tax is zero.
- The $10 billion Bishoftu mega-airport project is expected to strengthen rental demand along the Bole and Airport corridor.
- Full-service property management costs 8 to 12% of rent, plus around one month's rent for tenant placement.
What are the rental yields in Addis Ababa as of 2026?
What's the average gross rental yield in Addis Ababa as of 2026?
As of early 2026, the average gross rental yield in Addis Ababa across all property types is around 7.5%.
Most residential properties fall within a 6% to 9% gross yield range, depending on location and property type.
This puts Addis Ababa higher than many African capitals, largely because property prices remain accessible while rental demand stays strong due to the city's housing shortage.
The key factor influencing gross yields right now is market segmentation: expat-oriented furnished rentals often have lower yields but stable tenants, while local mid-market unfurnished units typically deliver higher yields.
What's the average net rental yield in Addis Ababa as of 2026?
As of early 2026, the average net rental yield in Addis Ababa across all property types is around 5%.
The typical gap between gross and net yields is about 2 to 2.5 percentage points, wider than some markets due to Addis Ababa's unique cost structure.
Maintenance and repairs most significantly reduce gross to net yield, because power and water intermittency increases wear-and-tear and often requires landlords to cover backup generator or water tank costs.
Most investment properties deliver net yields between 3.5% and 6.5%, depending on whether the landlord pays for utilities (common in furnished expat rentals) or the tenant covers them.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Addis Ababa.
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.
What yield is considered "good" in Addis Ababa in 2026?
In Addis Ababa in 2026, a gross yield of 8% or higher (or net yield of 5.5%+) is considered "good," provided the property offers solid tenant quality and reliable rent collection.
The threshold separating average from high-performing properties is around 8% gross, but since rent control regulations affect what you actually collect, "good" yield is about stability and collectability, not just headline returns.
How much do yields vary by neighborhood in Addis Ababa as of 2026?
As of early 2026, the spread in gross yields between highest and lowest-yield neighborhoods is typically 3 to 5 percentage points.
Highest-yield neighborhoods have strong local renter demand and price-sensitive purchase markets: Megenagna, CMC, Gerji, Gurd Shola, Ayat, Jemo, Saris, and Lebu.
Lowest-yield neighborhoods are prestige and expat-heavy areas where prices run ahead of rents: Bole, Kazanchis, Old Airport, Sarbet, Arat Kilo, and Sidist Kilo.
Yields vary because prestige areas attract buyers paying premium prices for tenant quality and location, compressing yields, while everyday-demand areas offer better yield math since property prices haven't risen as fast as rents.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Addis Ababa.
How much do yields vary by property type in Addis Ababa as of 2026?
As of early 2026, gross yields range from around 4.5% for large villas up to 10% for studios and one-bedrooms, with townhouses and mid-size apartments in between.
Studios and one-bedrooms deliver the highest yields (8% to 10%) because they command higher rent per square meter and relet faster.
Villas and larger houses deliver the lowest yields (4.5% to 7%) because high capital values aren't offset by proportionally higher rents.
Yields differ because smaller units attract broader renter pools and turn over quickly, while larger properties depend on narrower tenant bases and trade yield for lease stability.
By the way, you might want to read the following:
What's the typical vacancy rate in Addis Ababa as of 2026?
As of early 2026, the average residential vacancy rate in Addis Ababa is around 7%.
Vacancy ranges from 4% to 7% in mid-market unfurnished areas up to 8% to 12% in prime furnished neighborhoods.
The main driver is rental type: unfurnished units benefit from the city's housing shortage, while furnished rentals face more seasonal and turnover-driven vacancies.
Compared to regional averages, Addis Ababa's mid-market vacancy is relatively low because rapid urbanization and housing deficit keep demand strong.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Addis Ababa.
What's the rent-to-price ratio in Addis Ababa as of 2026?
As of early 2026, the average rent-to-price ratio in Addis Ababa is around 0.6% per month (roughly 7.2% annually).
For buy-to-let investors, a ratio of 0.65%+ per month (around 8% annually) is considered favorable, and this ratio directly determines your gross yield.
Compared to other East African capitals, Addis Ababa's ratio is attractive because property prices haven't inflated as rapidly while rental demand remains strong.
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.
Which neighborhoods and micro-areas in Addis Ababa give the best yields as of 2026?
Where are the highest-yield areas in Addis Ababa as of 2026?
As of early 2026, highest-yield neighborhoods include Megenagna, CMC (along the CMC-Summit-Goro axis), Gerji, Gurd Shola, Ayat, Jemo, Saris, and Lebu.
In these areas, gross yields typically range from 8% to 10% when properties are purchased at reasonable prices.
These high-yield areas share a common characteristic: they sit in the path of corridor upgrades, have strong everyday renter demand, and haven't yet seen prices inflate to prestige levels.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Addis Ababa.
Where are the lowest-yield areas in Addis Ababa as of 2026?
As of early 2026, lowest-yield neighborhoods include Bole (prime commercial strips), Kazanchis, Old Airport, Sarbet, Arat Kilo, Sidist Kilo, Piassa, and Mexico.
In these areas, gross yields typically range from 5% to 7%, sometimes lower for high-end villas.
Yields are compressed because purchase prices reflect prestige and expat demand, but rents haven't kept pace with elevated property values.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Addis Ababa.
Which areas have the lowest vacancy in Addis Ababa as of 2026?
As of early 2026, neighborhoods with lowest vacancy include Megenagna, CMC, Gerji, Gurd Shola, and Jemo.
In these areas, vacancy rates typically range from 4% to 7%.
The main demand driver is the large pool of local renters seeking affordable housing near transport nodes and employment centers.
The trade-off: while occupancy is high, tenants have less purchasing power, so rental rates per square meter tend to be lower than in premium areas.
Which areas have the most renter demand in Addis Ababa right now?
Strongest renter demand is in Bole (business travelers/expats), Kazanchis (furnished corporate rentals), Megenagna and CMC (everyday commuters), and Gerji and Gurd Shola (families seeking newer stock).
In Bole and Kazanchis, demand comes from expats, diplomats, and NGO staff; in Megenagna, CMC, and Gerji, typical renters are local professionals or families seeking affordable unfurnished housing.
In high-demand areas like Megenagna and CMC, well-priced units fill within one to three weeks; furnished units in Bole and Kazanchis may take three to six weeks due to higher rents.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Addis Ababa.
Which upcoming projects could boost rents and rental yields in Addis Ababa as of 2026?
As of early 2026, top projects expected to boost rents include Corridor Development Phase II (Meskel Square to Megenagna to South Gate), the $10 billion Bishoftu mega-airport, and ongoing road and transit upgrades.
Neighborhoods most likely to benefit include areas along corridor pathways (Megenagna, Gurd Shola, Gerji) and the Bole/Airport corridor.
Investors might realistically expect 10% to 20% rent increases in directly impacted micro-areas, though full impact may stretch over several years.
You'll find our latest property market analysis about Addis Ababa here.
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What property type should I buy for renting in Addis Ababa as of 2026?
Between studios and larger units in Addis Ababa, which performs best in 2026?
As of early 2026, studios and one-bedrooms outperform larger units on gross yield, while two- to three-bedrooms win on occupancy stability and lower turnover.
Studios typically deliver 8% to 10% gross yields (roughly ETB 8,000 to 12,000/month for a 300,000 to 400,000 ETB unit, or $65 to $100 USD / 60 to 90 EUR), while larger apartments yield 6.5% to 8% with longer tenant stays.
Smaller units outperform on yield because they command higher rent per square meter and attract a broader pool of renters.
However, if targeting families or corporate tenants who prefer stability, a two- to three-bedroom in Gerji or CMC may be better since these tenants sign longer leases and reduce vacancy risk.
What property types are in most demand in Addis Ababa as of 2026?
As of early 2026, the most in-demand property type is the well-located unfurnished apartment, particularly two- to three-bedrooms near transport nodes.
Top three by demand: (1) unfurnished apartments in mid-market areas, (2) practical family units near transport links, and (3) selectively furnished units in Bole and Kazanchis.
The city's structural housing shortage combined with rapid urbanization drives this pattern, meaning everyday renters far outnumber expats.
Currently underperforming: large unfurnished standalone villas in non-prestige areas, since few local renters can afford them and corporate tenants prefer furnished options in prime locations.
What unit size has the best yield per m² in Addis Ababa as of 2026?
As of early 2026, smaller units (30 to 50 square meters) deliver the best gross yield per square meter in Addis Ababa.
For that optimal size, typical gross yield per square meter is ETB 250 to 350/month ($2 to $3 USD / 1.80 to 2.70 EUR), compared to ETB 150 to 200 for larger units.
Larger units have lower yield per square meter because total rent doesn't scale proportionally with size, while smaller units benefit from renters willing to pay a premium for convenience.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable 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 costs cut my net yield in Addis Ababa as of 2026?
What are typical property taxes and recurring local fees in Addis Ababa as of 2026?
As of early 2026, annual property tax is evolving under the new framework, but budget for 0.5% to 1% of assessed value annually (roughly ETB 15,000 to 40,000, or $120 to $330 USD / 110 to 300 EUR, for a mid-range apartment).
Beyond property tax, budget for condo/HOA fees (typically ETB 500 to 2,000/month, or $4 to $16 USD / 3.50 to 15 EUR) covering security, cleaning, and utilities management, plus rental income tax.
Together, these typically represent 5% to 10% of gross rental income.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Addis Ababa.
What insurance, maintenance, and annual repair costs should landlords budget in Addis Ababa right now?
Annual landlord insurance typically costs ETB 5,000 to 15,000 ($40 to $125 USD / 35 to 115 EUR), though many landlords self-insure for smaller issues.
For maintenance and repairs, budget 1% to 2% of property value annually (ETB 30,000 to 80,000, or $250 to $660 USD / 225 to 600 EUR).
The expense that most catches landlords off guard is power and water intermittency costs: generator repairs, water tank maintenance, and pump replacements.
Total realistic budget: ETB 40,000 to 100,000/year ($330 to $825 USD / 300 to 750 EUR) for insurance, maintenance, and repairs combined.
Which utilities do landlords typically pay, and what do they cost in Addis Ababa right now?
For standard unfurnished rentals, tenants pay utilities directly; for furnished/serviced rentals (common in Bole and Kazanchis), landlords often cover electricity, water, and internet.
When landlords pay utilities, monthly cost typically runs ETB 3,000 to 8,000 ($25 to $65 USD / 22 to 60 EUR), depending on usage and included services.
What does full-service property management cost, including leasing, in Addis Ababa as of 2026?
As of early 2026, full-service management costs 8% to 12% of collected rent monthly (roughly ETB 800 to 3,000, or $6.50 to $25 USD / 6 to 22 EUR).
Tenant placement fees are usually around one month's rent, charged each time a new tenant is found.
What's a realistic vacancy buffer in Addis Ababa as of 2026?
As of early 2026, budget around 8% of annual rental income for standard unfurnished units, or 12% to 17% for furnished/prime rentals.
In practice, that means four to six weeks vacancy per year for unfurnished mid-market units, and six to nine weeks for furnished rentals in Bole and Kazanchis.
Buying real estate in Addis Ababa can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
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.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Ethiopian Statistical Service | Ethiopia's official statistics agency for macro and price-level context. | We used it to anchor the early 2026 macro backdrop. We treat it as ground truth to sanity-check private rent and price indicators. |
| National Bank of Ethiopia | The central bank, most credible for financial and macro indicators. | We used it to frame financing constraints affecting buyer prices and yields. We cross-checked macro sources when translating rents into return expectations. |
| UN-Habitat | Leading international authority on cities, with Addis-specific report. | We used it to ground what's unique about Addis Ababa: housing deficit, urbanization, and resilient rental demand. We justified why vacancy differs by segment. |
| Knight Frank / EMC | Globally recognized real estate advisory with professional market briefing. | We used it for market segmentation (prime vs non-prime) and demand drivers. We avoided relying on single crowdsourced datasets for neighborhood yields. |
| Numbeo | Transparent methodology with internally consistent rent-to-price ratios. | We used it as quantitative spine for rent-to-price and gross yield math. We used its price-to-rent ratio to estimate citywide gross yield ranges. |
| Ethiopia Ministry of Justice - Property Tax | Official government legal repository for tax laws. | We used it to describe recurring property taxation direction. We used it to structure the net yield cost stack for early 2026. |
| Property Tax Proclamation No. 1365/2025 | Full text of the proclamation for verifiable reference. | We used it to confirm the proclamation's scope. We avoided rule-of-thumb tax claims without primary documentation. |
| Ethiopia Ministry of Justice - Rent Control | Official law source for rent regulation affecting yield outcomes. | We used it to flag regulatory risk around rent increase limits. We justified why good yield means stability, not just headline returns. |
| Federal Income Tax Proclamation No. 979/2016 | Legal foundation for rental income taxation and deductions. | We used it to explain rental income tax as net yield drag. We built realistic net yield estimates instead of assuming zero tax. |
| Income Tax Amendment Proclamation No. 1395/2025 | Direct copy of amended law text as primary reference. | We used it to confirm recent rental income taxation updates. We avoided outdated tax assumptions for early 2026. |
| Ministry of Revenue | Government body responsible for tax administration. | We used it as reference for where rules are operationalized. We triangulated proclamation descriptions with tax authority context. |
| Ethiopian Electric Utility | The utility provider, most authoritative for electricity tariffs. | We used it to estimate landlord-paid utility exposure. We included it in net yield cost stack for serviced rentals. |
| Addis Ababa Water & Sewerage Authority | City's water authority, most credible for water tariffs. | We used it to quantify recurring utility costs landlords sometimes cover. We kept net yield assumptions realistic for water intermittency. |
| Ethio telecom | National telecom operator with verifiable pricing. | We used it to cost landlord-included internet bundles. We explained why bills-included rentals show lower net yield. |
| Ethiopian News Agency | State news agency, reliable for official project milestones. | We used it to identify public works shifting micro-area desirability. We pointed to corridors likely to see upward rent pressure. |
| Ethiopian Airlines | Primary issuer of the project, high-confidence source. | We used it to support upcoming projects with verifiable statements. We connected aviation investment to rental demand along Bole-Airport axis. |
| African Development Bank | Top-tier multilateral lender with highly verifiable releases. | We used it to validate the airport investment scale. We justified why some Addis Ababa submarkets stay liquid despite macro volatility. |
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