Authored by the expert who managed and guided the team behind the Uganda Property Pack
Everything you need to know before buying real estate is included in our Uganda Property Pack
Uganda's rental property market offers promising yields for investors seeking opportunities in East Africa. As of September 2025, rental yields in Uganda range from 3.7% to 10% depending on property type and location, with apartments in middle-income areas delivering the strongest returns at 5.9% to 7.4%. The market benefits from steady urbanization, growing expatriate demand, and relatively affordable property prices compared to other African capitals.
If you want to go deeper, you can check our pack of documents related to the real estate market in Uganda, based on reliable facts and data, not opinions or rumors.
Uganda's property market delivers competitive rental yields ranging from 5.9% to 7.4% for apartments in middle-income areas, while commercial properties can reach 8-10% returns.
Kampala remains the strongest market with prime areas like Kololo showing 6.1% yields, though vacancy rates average 9% in premium locations as of 2025.
| Property Type | Average Yield | Typical Investment Range (UGX) |
|---|---|---|
| Apartments (middle-income areas) | 5.9% - 7.4% | 315M - 330M |
| Detached Houses (prime) | 2.8% - 2.9% | 525M - 550M |
| Commercial Spaces | 8% - 10% | Varies widely |
| Short-term Rentals (Airbnb) | 8% - 25% | 320M+ |
| Prime Apartments (Kololo) | 6.1% | 1.26B+ |
| Secondary Cities (Jinja/Entebbe) | 6% - 8% | 200M - 300M |
What are the current rental yields in Uganda by property type?
As of September 2025, Uganda's rental market offers varying yields depending on property type and location.
Apartments in middle-income and upper-middle areas deliver the strongest returns, typically yielding between 5.9% and 7.4%. Prime central apartments average around 6.1% yield, though some secondary zones can reach exceptional returns of up to 10%.
Detached houses in prime districts yield lower returns, averaging 2.8% to 2.9% due to their high property values and lower rental demand. These properties appeal to a more limited tenant pool, which impacts their rental performance.
Commercial spaces, including office and retail properties, can reach impressive yields of 8-10%. However, these returns are subject to market fluctuations, especially with recent supply surges in Kampala's commercial sector.
It's something we develop in our Uganda property pack.
How do rental yields vary across different areas in Uganda?
| Location/Area | Rental Yield | Vacancy Rate |
|---|---|---|
| Kololo, Nakasero, Bugolobi (prime) | 6.1% | 9% |
| Naguru, Muyenga, Mbuya (upper-middle) | 7.4% | 10-12% |
| Bukoto, Kira, Naalya, Buziga (middle) | 5.9% | 8-10% |
| City center | 1.3% | Higher |
| Jinja/Entebbe (secondary cities) | 6-8% | 22% |
| Airbnb locations (Jinja median) | 6-8% | 78% |
What are the average property prices including fees and taxes?
Property prices in Uganda vary significantly by location and type, with Kampala commanding premium prices.
A 60 square meter apartment in Kampala typically costs between UGX 315-330 million, while similar properties in Entebbe range from UGX 250-300 million and Jinja from UGX 200-250 million. Detached houses of 100 square meters cost UGX 525-550 million in Kampala, compared to UGX 400-500 million in Entebbe and around UGX 465 million in Jinja.
Townhouses spanning 150 square meters command UGX 840-880 million in Kampala, UGX 700-800 million in Entebbe, and UGX 600-700 million in Jinja. Luxury villas exceeding 200 square meters reach UGX 1.26-1.32 billion in Kampala and approximately UGX 1 billion in Entebbe.
Additional costs include stamp duty at 1% of property price, agent commissions of 2-5%, and legal fees ranging from UGX 0.5-3 million. The government scrapped mortgage stamp duty in June 2025, reducing borrowing costs for buyers. Annual property tax typically amounts to 6% of assessed annual rental value.
What do typical rental examples look like across different property categories?
Small apartments in Kampala's decent areas showcase the entry-level investment opportunity for many investors.
A 2-bedroom apartment purchased for UGX 320 million typically generates monthly rent between UGX 1.2-2 million. These units primarily attract young professionals, couples, and expatriates seeking convenient urban living. The tenant profile includes embassy staff, NGO workers, and local professionals working in Kampala's business district.
Family houses in Kampala suburbs, featuring 3-4 bedrooms and spanning 120-180 square meters, require investments of UGX 550 million or more. These properties command monthly rents of UGX 2.5-3.8 million and typically house middle-income families, NGO staff, and business expatriates. The larger space and suburban location appeal to families with children requiring garden space and proximity to international schools.
High-end properties in prime areas like Kololo, featuring 200+ square meters, represent the luxury segment with purchase prices exceeding UGX 1.3 billion. These properties generate monthly rents from UGX 3.8-8 million and attract diplomats, high-net-worth individuals, and senior executives of multinational companies.
Don't lose money on your property in Uganda
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.
What are the current vacancy rates across different property categories?
Vacancy rates in Uganda's property market show improvement in prime areas but remain challenging in secondary locations.
Prime Kampala residential areas experienced approximately 9% vacancy rates in 2024-2025, representing an improvement from 12% in 2023 as the market tightened. This reduction indicates growing demand and better market conditions in the capital's most desirable neighborhoods.
Mid-tier urban areas typically maintain vacancy rates of 8-12%, reflecting steady but more moderate demand compared to prime locations. These areas offer more affordable options for tenants while still maintaining reasonable occupancy levels for investors.
The Airbnb market in Jinja shows more challenging vacancy statistics, with median occupancy at only 22%, meaning 78% vacancy at the median level. However, best-in-class properties can achieve 56% occupancy, demonstrating the importance of property quality and management in the short-term rental sector.
Office and commercial properties face increasing vacancy due to new office space development and shifting demand patterns following global workplace changes.
Who are the main tenant profiles and what do they seek in properties?
Uganda's rental market serves diverse tenant categories with distinct preferences and requirements.
Urban renters in Kampala primarily consist of young professionals, expatriates, government employees, and NGO staff. These tenants typically seek modern amenities, reliable utilities, and proximity to business districts. Security features rank highly among their priorities, with many preferring gated communities or buildings with 24-hour security.
Suburban and secondary city tenants include middle-income families, diaspora returnees, and small business owners. These renters often prioritize space, value for money, and family-friendly environments with access to schools and recreational facilities.
The most sought-after features across all tenant categories include secure compounds, reliable electricity and water supply, proximity to workplaces and schools, and modern amenities. Internet connectivity has become increasingly important, especially for expatriate tenants and remote workers.
The Airbnb and short-term rental market attracts tourists, business travelers, and adventure seekers visiting Jinja, Entebbe, and Kampala's central areas. These guests prioritize location, cleanliness, and unique experiences over long-term comfort features.
How do ownership costs affect real rental yields?
Ownership costs significantly impact net rental yields, often reducing returns by 2-4 percentage points from gross figures.
Property taxes represent a substantial ongoing cost at 6% of annual rental value, directly affecting net returns. For a property generating UGX 24 million annually in rent, property taxes would amount to UGX 1.44 million per year.
Maintenance costs typically range from 0.5-1.5% of property value annually, varying with property age and required services. Older properties or those with swimming pools, generators, and extensive landscaping incur higher maintenance expenses. Security services, common in gated communities, add additional monthly costs.
Financing costs remain substantial with mortgage rates around 21% for 20-year terms. Although the government removed stamp duty on mortgages in mid-2025, reducing upfront costs, monthly repayments can significantly impact net yields for leveraged investments. Highly-leveraged buyers often find their net yields considerably lower than quoted gross figures.
Management fees, insurance, and periodic renovations further reduce net returns, making careful cost analysis essential for realistic investment projections.
What are the differences between short-term and long-term rental returns?
Short-term rentals offer significantly higher potential returns but require more active management and carry greater risks.
Airbnb and short-term rental properties can generate gross returns of 8-25%, with median monthly incomes in Kampala ranging from $336-$1,141. Jinja properties show median monthly income of $377, with best-performing properties reaching $1,671 monthly. These figures represent substantial premiums over traditional long-term rentals.
Long-term leases provide stable but moderate yields, typically 6-7% gross, with fewer management requirements and lower vacancy risks. Traditional rentals offer predictable monthly income, reduced furnishing costs, and minimal day-to-day involvement from property owners.
Short-term rental management requires significant time investment, higher furnishing and cleaning costs, and faces seasonal occupancy fluctuations. Properties must maintain hotel-like standards, including regular maintenance, professional cleaning, and guest services. Marketing, booking management, and guest communication add operational complexity.
Many successful investors adopt hybrid strategies, combining short-term and long-term rentals to balance income potential with risk management. This approach allows flexibility to shift between rental types based on market conditions and personal capacity.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Uganda 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.
How have rental yields changed compared to previous years?
Uganda's rental market has shown consistent growth over the past five years, with yields improving alongside property values.
Kampala residential prices rose by 3.8% year-over-year in Q1 2025, with forecasts estimating 8-12% increases for the full year 2025. Five-year price growth averages 11.5% annually, demonstrating strong market fundamentals and sustained demand from urbanization trends.
Rental yields have increased by 0.5-1% in key districts over the past year, driven by rising rents and relatively stable property values. This improvement reflects tightening market conditions as vacancy rates decreased from 12% to 9% in prime areas between 2023 and 2025.
The market has benefited from sustained urbanization, growing expatriate presence, and supply constraints in desirable neighborhoods. Prime areas show improved occupancy and modest rent increases, while some suburban and commercial zones face oversupply challenges.
Short-term rental sectors have expanded significantly with growing tourism and business activity, though regulatory changes pose potential future risks to this segment.
What are the forecasts for rental yields and property values?
Uganda's property market outlook remains cautiously optimistic across different time horizons, supported by fundamental economic and demographic trends.
Over the next year, property prices are expected to rise 5-12%, with yields remaining stable to modestly increasing due to growing demand. The market benefits from continued urbanization, infrastructure development, and steady economic growth driving rental demand.
Five-year projections suggest continued appreciation of 5-7% annually, with yields expected to remain steady unless significant oversupply develops. Urban demand, infrastructure improvements, and foreign investment should sustain growth momentum, particularly in Kampala and major secondary cities.
Ten-year forecasts maintain cautious optimism, assuming macro-economic stability continues. Urban population growth, infrastructure development, and regional economic integration should support sustained demand. However, risks include potential policy shifts, economic volatility, and regional instability that could impact investment returns.
The short-term rental sector is forecast to continue growing with tourism and business activity expansion, though regulatory changes pose potential risks to future returns in this segment.
How do Uganda's rental yields compare with other African cities?
Uganda's rental yields of 6-8% position the country competitively within the East African market and broader continental context.
Kampala's yields compare favorably with regional peers including Nairobi, Dar es Salaam, and Addis Ababa, which typically offer similar returns in the 6-8% range. However, Uganda's yields remain below West African markets like Lagos and Accra, which can achieve 8-12% in certain zones due to higher demand and supply constraints.
Uganda's property prices remain significantly lower than South African and Egyptian markets, while delivering higher yields than North African countries like Morocco, which typically yield 3-4%. This positioning makes Uganda attractive for investors seeking higher returns with lower capital requirements.
The country's political stability, growing economy, and relatively straightforward property laws provide additional advantages compared to some regional markets. English-language business environment and established legal frameworks appeal to international investors seeking African exposure.
Currency stability and investment protection laws further enhance Uganda's appeal compared to markets with higher political or economic volatility.
What are the smartest property investment choices for maximizing rental income?
Mid-market apartments in growing suburbs represent the optimal balance of rental yield and market liquidity for most investors.
These properties target Uganda's emerging urban middle class and growing expatriate population, offering yields of 5.9-7.4% with reasonable liquidity. Areas like Bukoto, Kira, and Naalya provide strong rental demand with lower vacancy rates than premium locations.
Short-term rental units in central tourism and expatriate districts offer the highest gross income potential for investors willing to actively manage properties. Kampala's central areas, Entebbe near the airport, and Jinja's adventure tourism market provide strong short-term rental demand.
Land investments in development corridors present opportunities for significant capital appreciation, particularly near infrastructure projects in Wakiso, Kira, and Naalya. These areas benefit from urban expansion and improved connectivity to Kampala's business districts.
Townhouses in gated communities appeal to security-conscious families and international renters, offering stable rental income with lower management requirements than apartments. These properties typically maintain lower vacancy rates and attract longer-term tenants.
Commercial retail and office properties in emerging areas can provide strong returns, though investors should carefully monitor oversupply risks in Kampala's commercial sector.
It's something we develop in our Uganda property pack.
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.
Uganda's rental property market continues to offer attractive opportunities for informed investors, with yields ranging from 5.9% to 10% depending on property type and location.
Success in Uganda's property market requires careful consideration of location, tenant demand, management capacity, and regulatory changes to maximize returns while managing risks effectively.
It's something we develop in our Uganda property pack.
Sources
- TheAfricanVestor - Uganda Price Forecasts
- TheAfricanVestor - Uganda Buy Property
- Global Property Guide - Uganda Price History
- Business Times Uganda - Office Space Oversupply
- Real Estate Database - Uganda Market Review 2025
- AirROI - Jinja Report
- TheAfricanVestor - Average House Price Uganda
- SoftPower - Uganda Scraps Stamp Duty
- Knight Frank - Kampala Market Review H1 2024
- EstateLad - Top Kampala Neighbourhoods 2025