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Tanzania's rental market offers attractive yields ranging from 5% to 12% as of September 2025, with Dar es Salaam leading at $500-800 monthly for one-bedroom apartments in the city center. Short-term rentals in tourist areas like Zanzibar and Dar es Salaam significantly outperform traditional long-term leases, generating yields of 10-12% compared to 5-7% for conventional rentals.
If you want to go deeper, you can check our pack of documents related to the real estate market in Tanzania, based on reliable facts and data, not opinions or rumors.
Tanzania's rental market shows strong performance with Dar es Salaam commanding the highest rents and Zanzibar offering premium short-term rental opportunities.
Regional variations are significant, with city centers demanding 60-100% premium over suburban areas, while commercial properties yield $15-25 per square meter monthly in prime locations.
| Property Type | Location | Monthly Rent (USD) | Rental Yield |
|---|---|---|---|
| 1-Bedroom Apartment | Dar es Salaam City Center | $500-800 | 6-7% |
| 1-Bedroom Apartment | Dar es Salaam Suburbs | $300-500 | 5-6% |
| 3-Bedroom House | Dar Prime Neighborhoods | $2,900+ | 6-8% |
| Commercial Unit | Prime Locations | $15-25/m² | 7-9% |
| Short-term Rental | Tourist Areas | Varies | 10-12% |
| Studio Apartment | City Center | $300-350 | 5-6% |
| Luxury Villa | Premium Areas | $2,000-3,200 | 6-8% |
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What's the current average rent in Tanzania by property type?
As of September 2025, Tanzania's rental market shows significant variation across property types and locations.
In Dar es Salaam city center, one-bedroom apartments command $500-800 monthly, while suburban areas offer more affordable options at $300-500 monthly. Three-bedroom houses in prime neighborhoods like Masaki, Oyster Bay, and Upanga reach $2,900 or higher monthly.
Commercial properties follow a similar premium structure, with prime location office spaces renting for $15-25 per square meter monthly, while suburban commercial units range from $8-15 per square meter monthly. Studio apartments typically rent for $300-350 monthly in city centers.
The luxury segment, including villas and high-end properties, commands $2,000-3,200 monthly depending on size and location. These premium properties typically span 100-300 square meters and offer amenities that justify the higher rental rates.
It's something we develop in our Tanzania property pack.
How does rent vary across Tanzania's main cities and regions?
Dar es Salaam dominates Tanzania's rental market as the commercial capital and largest city.
Within Dar es Salaam, premium neighborhoods like Masaki, Oyster Bay, Upanga, and Msasani command the highest rents, with three-bedroom apartments reaching $2,900+ monthly. Suburban areas of Dar es Salaam offer more moderate pricing at $300-700 monthly for apartments.
Zanzibar represents a unique market focused heavily on tourism, with city center apartments selling at $3,700 per square meter and suburban properties ranging from $80,000-300,000 for purchase. The rental market reflects this premium positioning with higher short-term rental rates.
Secondary cities including Dodoma (the capital), Arusha, and Mwanza typically offer rents 30-40% lower than Dar es Salaam. Arusha apartments, for example, purchase at $700-1,100 per square meter, translating to proportionally lower rental rates.
Regional centers and smaller cities maintain the most affordable rental markets, though with correspondingly lower rental yields and limited luxury options.
What's the typical rent per square meter for different property types?
| Location | Property Type | Rent per sqm/month (USD) |
|---|---|---|
| Dar es Salaam City Center | Apartment | $10-27 |
| Dar es Salaam Suburbs | Apartment | $8-21 |
| Dar es Salaam Prime | Commercial Office | $15-25 |
| Dar es Salaam Suburbs | Commercial Office | $8-15 |
| Zanzibar City Center | Apartment | $25-35 |
| Secondary Cities | Apartment | $6-15 |
| Regional Centers | Mixed Use | $4-10 |
What's the total rental cost including management fees and utilities?
Total rental costs in Tanzania extend significantly beyond base rent when including utilities, management fees, and service charges.
Utilities for an 85-square-meter apartment average $64 monthly, covering electricity, water, and gas. Internet connectivity adds approximately $40.60 monthly for standard broadband service.
Service charges range from TZS 5,000-15,000 per square meter annually (approximately $1.94-5.80), while maintenance fees typically cost TZS 10,000-30,000 per square meter annually (around $4-12). Management fees generally represent 5-10% of annual rent.
For a practical example, a two-bedroom city center apartment with $600 monthly base rent would incur approximately $70 monthly for utilities, $60 monthly for service and maintenance charges, and $60 monthly for management fees (at 10%), creating a total monthly cost of approximately $790.
These additional costs represent roughly 25-35% above base rent, making accurate budgeting essential for both tenants and investors calculating net returns.
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How do property taxes and government fees affect net rent for owners?
Tanzania's property tax structure underwent significant changes in April 2025, implementing simplified flat rates for different building types.
Standard buildings now face TZS 18,000 annually (approximately $6.70), while multi-story buildings pay TZS 90,000 per floor annually (roughly $34 per floor). These rates represent a substantial reduction in tax burden compared to previous percentage-based systems.
Commercial properties face additional local authority service fees equivalent to 0.3% of company turnover, which can significantly impact net returns for businesses operating rental properties at scale.
Short-term rental properties incur hotel levy charges ranging from 1.5-5% of gross revenue, making this an important consideration for investors pursuing Airbnb or vacation rental strategies.
Overall, these government fees typically reduce net rental income by 2-4% for residential properties and 3-6% for commercial properties, representing a manageable but noteworthy expense for property investors.
What financing and mortgage options are available for rental property investors?
Tanzania offers distinct financing options depending on investor citizenship status and property type.
Local citizens can access mortgages covering up to 90% of property value for home purchase or construction, with interest rates typically ranging from 15-17% annually. Loan terms extend up to 15 years for residential properties.
Foreign investors face restrictions on land ownership but can secure 99-year leases, and recent years have seen improved access to financing compared to historical limitations. Microfinance institutions and personal loans provide alternative funding for smaller investment properties.
Commercial property financing typically requires higher down payments (30-40%) but offers longer repayment terms for qualified investors. Banks increasingly recognize rental income in loan qualification calculations, improving access for investment-focused borrowers.
Interest rates remain relatively high compared to developed markets, making cash purchases often more attractive for investors with available capital, particularly for properties targeting short-term rental markets with faster payback periods.
It's something we develop in our Tanzania property pack.
How do short-term rentals compare with long-term rentals in profitability?
Short-term rentals significantly outperform long-term rentals in Tanzania's key tourist and business destinations.
Short-term rental yields reach 10-12% annually in prime areas, compared to 5-7% for traditional long-term leases. Tourist hotspots like Zanzibar, Dar es Salaam's business districts, and Arusha near safari routes command premium short-term rates.
Occupancy rates vary considerably by location: Dar es Salaam achieves median 49% occupancy (approximately 179 nights annually), Zanzibar reaches 41% occupancy (around 150 nights yearly), while Arusha averages 24% occupancy for short-term rentals.
Long-term rental demand remains strong in suburban areas and university districts, offering more predictable income streams with lower management requirements. Vacancy rates for long-term rentals typically range from 8-12% in suburban areas and 15-20% in city centers.
The higher profitability of short-term rentals comes with increased management complexity, seasonal fluctuations, and higher marketing costs, making location selection crucial for success in this segment.
Can you provide concrete examples of current rental prices?
| Property Type | Monthly Rent (USD) | Typical Size (sqm) |
|---|---|---|
| Studio Apartment (City Center) | $300-350 | 30-35 |
| Studio Apartment (Suburbs) | $200-275 | 25-30 |
| 2-Bedroom Apartment (Prime) | $700-900 | 65-75 |
| 2-Bedroom Apartment (Standard) | $500-650 | 55-65 |
| Luxury Villa (Oceanfront) | $2,800-3,200 | 200-300 |
| Luxury Villa (Inland) | $2,000-2,500 | 150-250 |
| Commercial Office (Prime) | $15-25/sqm | Variable |
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Tanzania 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.
Who are the main renter profiles in Tanzania?
Tanzania's rental market serves diverse tenant profiles with distinct geographic and price preferences.
Local residents represent the majority of renters, particularly in suburban areas and affordable housing segments. This demographic typically seeks longer-term stability and gravitates toward properties under $500 monthly rent.
Expatriate professionals concentrate in premium urban districts including Masaki, Oyster Bay, Upanga, and Msasani in Dar es Salaam. These tenants often work for international organizations, embassies, or multinational corporations and accept higher rents for quality amenities and security.
Students create consistent demand near universities in Dar es Salaam, Arusha, and Dodoma, typically requiring smaller, more affordable units with good transportation links to campuses.
Business travelers and corporate tenants occupy commercial office spaces in city centers and growing industrial zones, with some requiring furnished corporate housing for extended business assignments.
Tourist renters, particularly in Zanzibar and safari-adjacent areas like Arusha, drive the short-term rental market with seasonal patterns and premium rate tolerance.
What are current vacancy rates by property type and area?
Vacancy rates in Tanzania's rental market reflect strong underlying demand with notable variations across property types and locations.
City center apartments experience vacancy rates of 15-20%, reflecting the premium pricing and selective tenant base in these prime locations. Competition among higher-end properties creates more tenant choice and longer marketing periods.
Suburban residential properties maintain healthier vacancy rates of 8-12%, benefiting from strong local demand and more moderate pricing structures. These areas attract long-term tenants seeking value and family-friendly environments.
Short-term rentals show different patterns, with Dar es Salaam Airbnb properties averaging 49% occupancy (effectively 51% vacancy), Zanzibar achieving 41% occupancy, and Arusha reaching median 24% occupancy rates.
Commercial properties in prime business districts typically maintain vacancy rates around 10-15%, while suburban commercial spaces may see 15-25% vacancy depending on location and accessibility.
The overall market shows healthy absorption of new supply, with most well-located and competitively priced properties finding tenants within 2-4 months of marketing.
What rental yields can investors expect and how do they compare historically?
Tanzania's rental yields have shown consistent improvement over the past five years, driven by infrastructure development and growing tourism.
As of September 2025, city center apartments deliver 6-7% annual yields, while suburban homes generate 5-6% returns. Short-term rentals in coastal and business areas achieve the highest yields at 10-12% annually.
Comparing to recent years, 2024 yields averaged 5-6% for city center apartments and 4-5% for suburban homes, with short-term rentals yielding 9-10%. The 2020 baseline showed 4-5% for city centers, 3-4% for suburbs, and 7-9% for short-term rentals.
This upward trajectory reflects several market drivers: increased tourism following post-pandemic recovery, infrastructure investments improving property access and amenities, and growing expatriate population in key cities.
Prime areas have benefited most from yield growth, particularly properties near new transportation links, business districts, and tourist attractions. The trend suggests continued yield expansion for well-positioned properties through 2025-2027.
It's something we develop in our Tanzania property pack.
What are the smartest investment choices today and how does Tanzania compare regionally?
Tanzania's current investment landscape favors specific property types and locations that capitalize on economic growth and tourism expansion.
Mid-income suburban developments represent excellent value, particularly in growing areas around Dar es Salaam with new infrastructure connections. These properties benefit from strong local demand and moderate pricing that ensures steady occupancy.
Tourist-focused short-term rentals in Dar es Salaam, Zanzibar, and Arusha offer the highest returns, with yields of 10-12% justifying higher management complexity. Safari route properties near Arusha and beachfront locations in Zanzibar command premium rates.
Compared regionally, Tanzania yields of 5-8% align with Nairobi but trail cities like Lagos where short-term rentals can reach 14%. However, Tanzania offers greater political stability and infrastructure development momentum.
Future projections suggest strong potential: 2025 should maintain current growth with robust tourism recovery, 2030 may see yields reaching 8-10% if urban and tourism investment continues, and by 2035, Dar es Salaam and Zanzibar could rival major African regional cities for investment returns.
Tanzania's strategic position, growing middle class, and government infrastructure focus create a compelling medium-term investment environment for strategic property investors.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Tanzania's rental market presents compelling opportunities for investors willing to understand regional variations and target appropriate tenant segments.
The combination of growing tourism, infrastructure development, and urbanization creates a foundation for sustained rental yield growth, particularly in strategic locations like Dar es Salaam and Zanzibar.
Sources
- TheAfricanVestor - Dar es Salaam Market Data
- TheAfricanVestor - House Prices Tanzania
- Exiap - Cost of Living Tanzania
- TheAfricanVestor - Apartment Maintenance Fees
- CMI - Property Tax Reforms Tanzania
- Aparthotel - Financing Property Tanzania
- Radarr Africa - Short vs Long Term Rentals
- Coldwell Banker - Dar es Salaam Rental Yield