Authored by the expert who managed and guided the team behind the Tanzania Property Pack
Yes, the analysis of Dar es Salaam's property market is included in our pack
Dar es Salaam's property market offers rental yields ranging from 5% to 12% depending on location and property type. The best returns come from well-managed apartments in emerging neighborhoods like Mikocheni and Kariakoo, where yields can reach 9%.
As Tanzania's economic hub, Dar es Salaam attracts expatriates, young professionals, and international businesses, creating steady rental demand across different price segments. The city's ongoing infrastructure development and urban expansion continue to drive property appreciation while maintaining attractive rental yields.
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.
Rental yields in Dar es Salaam average 6-8% for apartments in central areas and can reach 12% for short-term rentals. Commercial properties typically yield 8-12% while luxury areas like Masaki offer more stable but lower yields at 5-7%.
The best investment opportunities are in emerging neighborhoods like Mikocheni, Kariakoo, and Kigamboni where property prices remain moderate but rental demand is strong from professionals and expatriates.
| Property Type | Average Rental Yield | Best Areas |
|---|---|---|
| Apartments (1-3 bed) | 6-8% | Masaki, Oyster Bay, Upanga |
| Short-term Rentals | 10-12% | City Center, Tourist Areas |
| Houses & Villas | 5-7% | Bahari Beach, Salasala |
| Commercial Units | 8-12% | Kariakoo, Upanga |
| Emerging Areas | 7-9% | Mikocheni, Sinza, Kigamboni |
| Budget Areas | 5-6% | Mbagala, Outskirts |
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What property types offer the best rental returns in Dar es Salaam?
Apartments deliver the strongest rental yields in Dar es Salaam, averaging 6-8% in central districts like Masaki, Oyster Bay, and Upanga.
Short-term rental apartments can achieve yields of 10-12% when properly managed, especially in tourist areas and business districts. These properties require active management but offer significantly higher returns than traditional long-term rentals.
Commercial units including offices and retail spaces generate yields of 8-12%, particularly in mixed-use buildings in Kariakoo and Upanga where demand from businesses remains consistently strong.
Standalone houses and villas typically yield 5-7%, with luxury beachfront properties in Bahari Beach and Salasala at the lower end due to higher purchase prices. Budget houses in suburban areas like Mbezi Mwisho offer similar yields but with lower total investment requirements.
Serviced apartments targeting expatriates and business travelers can reach 12% yields but demand professional management and higher maintenance standards.
Which neighborhoods deliver the highest and lowest rental yields?
| Neighborhood | Rental Yield Range | Property Type Focus |
|---|---|---|
| Mikocheni, Sinza, Kariakoo | 7-9% | Mid-range apartments, emerging areas |
| Masaki, Oyster Bay, Upanga | 6-9% | Premium expat housing, stable tenants |
| Kigamboni, Tegeta, Ubungo | 6-8% | Affordable housing, strong appreciation |
| Bahari Beach, Salasala | 5-7% | Luxury houses, high investment required |
| Mbagala (outskirts) | 5-6% | Budget properties, lower demand |
How does property size affect rental yields in the city?
Smaller units under 50 square meters command higher rents per square meter but generate lower total rental income.
These compact properties appeal to young professionals and students who prioritize location over space, creating strong demand in central areas. The higher price per square meter translates to premium rental rates but requires careful market positioning.
Mid-size properties between 75-150 square meters offer the best balance of purchase price and rental income potential. These units attract families and expatriate professionals willing to pay steady rents for comfortable living spaces.
Larger properties over 200 square meters typically show lower yields due to higher total investment costs and a smaller pool of tenants who can afford premium rents. These properties often target corporate leases or wealthy expatriate families.
Market saturation in the luxury segment means larger properties face more competition and longer vacancy periods, further impacting overall yields.
What are average property purchase prices including all fees across different areas?
City center apartments average $1,200 per square meter with total property prices ranging from $100,000 to $440,000 depending on size and specific location.
Suburban apartments cost approximately $625 per square meter, with complete properties priced between $36,000 and $190,000. These areas offer significant value for investors seeking lower entry points.
Luxury areas like Masaki and Oyster Bay command $3,000+ per square meter, with premium properties starting at $190,000 and extending beyond $500,000 for exceptional units.
Emerging and suburban neighborhoods price properties between $600-800 per square meter, creating opportunities for investors with budgets from $36,000 to $150,000.
Transaction costs add 5-10% to the total investment, including stamp duty, registration fees, notary costs, agent commissions, and legal expenses. Outskirt areas like Mbagala and Kinyerezi offer the lowest entry prices but with reduced immediate rental demand.
What ongoing expenses should I factor into net rental yield calculations?
Property taxes in Dar es Salaam cost TZS 18,000 annually for normal buildings and TZS 90,000 per storey for multi-story buildings, while valued properties pay 0.25-0.5% of appraised value.
Maintenance fees range from TZS 5,000-15,000 per square meter annually, covering security, cleaning, waste management, and amenities. A typical 2-bedroom city center apartment incurs approximately TZS 150,000 monthly in service charges.
Utilities for a 2-bedroom apartment cost TZS 150,000-300,000 monthly depending on usage and location. Professional property management fees consume 5-10% of annual rental income when outsourced.
Insurance premiums range from TZS 200,000-500,000 annually and remain optional but recommended for investment protection. Legal and compliance costs include annual paperwork, registration renewals, and occasional repair assessments.
It's something we develop in our Tanzania property pack.
Don't lose money on your property in Dar es Salaam
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
How does mortgage financing impact investment profitability versus cash purchases?
Mortgage interest rates in Dar es Salaam average 15-19% as of September 2025, with loan terms extending up to 20-25 years for qualified borrowers.
High interest rates significantly reduce net rental yields compared to cash purchases, often eliminating most profit margins when financing costs exceed rental income growth. Most foreign investors choose cash transactions due to limited mortgage access and prohibitive borrowing costs.
Local buyers benefit more from mortgage options, particularly as rates show gradual decline trends, but must carefully calculate whether rental income covers loan payments plus property expenses.
Transaction costs for financed purchases increase further due to bank fees, appraisal costs, and additional legal requirements. Cash buyers avoid these extra expenses while maintaining full rental income after covering property taxes and maintenance.
Net yield calculations must subtract loan interest, principal repayment, and financing fees from rental income to determine actual profitability when using mortgage financing.
What rental income can I expect from different property types?
| Property Type | City Center Monthly Rent | Suburban Monthly Rent |
|---|---|---|
| 1-bedroom apartment | $500 - $800 | $300 - $500 |
| 3-bedroom apartment | $2,900+ | $700 - $1,500 |
| Standard house/villa | $900 - $2,500 | $500 - $1,500 |
| Commercial unit | $700 - $2,500 | $500 - $1,500 |
| Short-term/Airbnb | $49/day ($1,500/mo max) | $39/day average |
What tenant types drive rental demand in Dar es Salaam?
Expatriates represent the highest-paying tenant segment, preferring premium apartments in Masaki and Oyster Bay with amenities, security, and proximity to embassies and international schools.
Young professionals and the emerging middle class target mid-range apartments in Mikocheni, Kariakoo, and Sinza, providing steady rental demand with reliable payment histories. This segment drives consistent occupancy in reasonably priced properties.
Students near universities create strong demand for affordable rental units, offering good yields for budget-focused properties despite lower individual rental amounts.
Corporate tenants provide long-term lease agreements with reliable payments, particularly valuable for larger properties and commercial units in business districts.
Tourists and business travelers fuel demand for short-term furnished rentals and serviced apartments in city center locations and near beach areas, supporting premium daily rates but requiring active management.
What are current vacancy rates across different areas and property types?
Prime areas including Masaki, Oyster Bay, and Upanga maintain 85-90% occupancy rates, translating to 10-15% vacancy periods throughout the year.
Well-managed properties in emerging areas achieve similar or higher occupancy rates with vacancy typically below 15%, supported by growing demand from professionals and middle-class tenants.
Short-term rental properties average 48% occupancy citywide according to current Airbnb data, requiring strategic pricing and marketing to maximize revenue during peak periods.
Lower-income outskirt areas experience higher vacancy rates but offset this challenge with significantly lower entry prices and potential for appreciation as the city expands.
Commercial properties in established business districts maintain strong occupancy due to limited supply and consistent business demand, particularly in mixed-use developments.
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.
Which property types work best for short-term versus long-term rental strategies?
Short-term rentals achieve higher gross yields up to 12% but require active management, professional cleaning, and marketing expertise to maintain high occupancy rates.
Properties near commercial hubs, tourist attractions, and beaches perform best for short-term strategies, particularly furnished apartments and serviced units in city center locations.
Long-term rentals provide more stable yields of 6-9% with reliable monthly income and reduced management burden, making them ideal for family apartments and corporate lease properties.
Emerging neighborhoods like Mikocheni, Kariakoo, and Kigamboni offer the best combination of appreciation potential and yield for both rental strategies, with growing professional populations supporting long-term demand.
Short-term rentals face seasonal volatility and increased competition, while long-term rentals benefit from steady tenant relationships and predictable cash flow patterns throughout the year.
How have rental prices and yields changed over recent years?
Property prices per square meter increased 5-7% annually from 2020-2025, while rental yields remained stable at 6-9% in prime areas throughout this period.
Suburban and emerging districts experienced the strongest growth, driven by infrastructure development and population expansion as Dar es Salaam continues urbanizing rapidly.
Average Airbnb revenue decreased 6.13% year-on-year from 2024-2025, reflecting increased competition in the short-term rental market and seasonal demand fluctuations.
Commercial retail and hospitality properties outperformed residential yields during this period, with commercial yields maintaining 8-12% ranges due to business sector growth.
It's something we develop in our Tanzania property pack.
What are the rental yield forecasts for Dar es Salaam compared to other major African cities?
One-year forecasts expect rental yields to remain stable at 6-9% due to continuous urbanization and population growth supporting steady demand across property segments.
Five-year projections suggest yields could increase 1-2% in the best emerging areas as ongoing infrastructure development and new construction in strategic zones enhance property values and rental potential.
Ten-year outlook remains positive with strong fundamentals including urban migration, economic expansion, and regional investment supporting price appreciation and yields of 7-10% in select districts.
Compared to other major African cities, Dar es Salaam competes favorably with Zanzibar offering 9-13% yields, while Nairobi and Johannesburg provide similar ranges of 8-10% depending on specific locations and property types.
Market saturation risk exists in older city center locations over the medium term, but emerging neighborhoods and continued economic growth should sustain attractive investment returns for well-positioned properties.
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.
Dar es Salaam's rental market offers solid returns for informed investors who understand local dynamics and choose properties strategically.
Success requires careful analysis of location, tenant profiles, and ongoing costs to achieve sustainable yields in this growing East African market.
It's something we develop in our Tanzania property pack.
Sources
- Dar es Salaam Property Market Analysis
- Dar es Salaam Real Estate Market Data
- Coldwell Banker Tanzania Rental Yield Report
- Average Apartment Prices in Dar es Salaam
- Tanzania Commercial Real Estate Outlook
- Airbnb Revenue Data Dar es Salaam
- Dar es Salaam Rent Price Analysis
- Dar es Salaam Price Forecasts