Authored by the expert who managed and guided the team behind the Ethiopia Property Pack
Everything you need to know before buying real estate is included in our Ethiopia Property Pack
Rental yields in Ethiopia remain among the most attractive in East Africa, with gross returns averaging around 9.5% in early 2026.
This article breaks down exactly what you can expect from residential property investments in Ethiopia, from neighborhood-level yield differences to the real costs that eat into your net returns.
We constantly update this blog post to reflect the latest market conditions in Ethiopia's rental market.
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 Ethiopia.
Insights
- Ethiopia's gross rental yields average around 9.5% in early 2026, which is roughly double what you would find in most European capital cities.
- The gap between gross and net yields in Ethiopia typically runs between 2.5 and 3.5 percentage points, mainly due to maintenance costs and generator expenses.
- Mass-market condominiums in Addis Ababa often deliver higher yields than luxury villas because entry prices are much lower while tenant demand stays broad.
- Prime neighborhoods like Bole and Kazanchis in Addis Ababa have compressed yields of 6% to 8% gross because purchase prices are heavily inflated by expat demand.
- Outer Addis Ababa areas such as Ayat and CMC can deliver gross yields above 10% thanks to affordable purchase prices paired with strong local workforce demand.
- Ethiopia's residential vacancy rate sits around 6% on average, but micro-location matters more than citywide trends when it comes to keeping units occupied.
- Smaller units like studios and compact two-bedroom apartments tend to re-let faster in Ethiopia, which reduces vacancy losses and boosts effective returns.
- The Addis Ababa Urban Corridors Development Plan launched in 2024 is expected to lift rents in neighborhoods along improved transport routes over the next few years.
What are the rental yields in Ethiopia as of 2026?
What's the average gross rental yield in Ethiopia as of 2026?
As of early 2026, the average gross rental yield for residential property in Ethiopia sits at approximately 9.5% per year, which makes it one of the stronger rental markets in East Africa.
Most typical residential properties in Ethiopia fall within a realistic gross yield range of 7% to 12%, depending heavily on whether you're buying in prime Addis Ababa or in more affordable outer neighborhoods.
Ethiopia's average gross yield of around 9.5% is notably higher than what you would find in many neighboring East African markets, where yields often hover closer to 6% to 8% in capital cities.
The single most important factor driving gross rental yields in Ethiopia right now is the persistent gap between housing supply and urban demand, especially in Addis Ababa where formal rental stock has not kept pace with population growth.
What's the average net rental yield in Ethiopia as of 2026?
As of early 2026, the average net rental yield for residential property in Ethiopia is approximately 6.5% per year after accounting for typical landlord expenses.
In Ethiopia, the gap between gross and net yields typically runs between 2.5 and 3.5 percentage points, which is wider than in many mature markets due to higher operational costs.
The expense category that most significantly reduces gross yield to net yield in Ethiopia is maintenance and utilities, particularly generator fuel, water tank upkeep, and power backup systems that are common in higher-end rentals.
Most standard investment properties in Ethiopia deliver net yields in the range of 4.5% to 9%, with the wide spread reflecting differences in property condition, management approach, and whether utilities are bundled into rent.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Ethiopia.
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 Ethiopia in 2026?
In Ethiopia's rental market in early 2026, a gross rental yield of 10% or higher is generally considered "good" by local investors and represents a property that is outperforming the market average.
The threshold that typically separates average-performing properties from high-performing ones in Ethiopia is around 10% gross and 7% net, with anything above 8% net being considered very strong for an individual landlord.
How much do yields vary by neighborhood in Ethiopia as of 2026?
As of early 2026, the spread in gross rental yields between the highest-yield and lowest-yield neighborhoods in Ethiopia can be as wide as 5 to 7 percentage points, ranging from around 6% in prime areas to over 12% in outer districts.
The neighborhoods that typically deliver the highest rental yields in Ethiopia are affordability-driven areas with strong local demand, such as Ayat, CMC, Lebu, Summit, Jemo, and Koye Fiche in Addis Ababa.
The neighborhoods that typically deliver the lowest rental yields in Ethiopia are prime expat-focused areas where purchase prices are inflated, including Bole, Old Airport (Bisrate Gabriel), Kazanchis, and La Gare in Addis Ababa.
The main reason yields vary so much across neighborhoods in Ethiopia is that purchase prices in prime areas have risen faster than rents, compressing yields, while outer areas still offer affordable entry points with solid tenant demand.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Ethiopia.
How much do yields vary by property type in Ethiopia as of 2026?
As of early 2026, gross rental yields in Ethiopia range from around 6% for high-end villas in prime locations to over 12% for mass-market condominiums in well-connected outer areas.
The property type that currently delivers the highest average gross rental yield in Ethiopia is the mass-market condominium, because entry prices are relatively low while tenant demand from local professionals remains consistently strong.
The property type that currently delivers the lowest average gross rental yield in Ethiopia is the luxury villa, because purchase prices are very high and the tenant pool of expats and diplomats willing to pay premium rents is relatively thin.
The key reason yields differ between property types in Ethiopia is that condominiums and mid-market apartments attract broad local demand at affordable price points, while villas require expensive maintenance and target a narrower tenant base.
By the way, you might want to read the following:
What's the typical vacancy rate in Ethiopia as of 2026?
As of early 2026, the average residential vacancy rate in Ethiopia for lettable urban rentals is approximately 6%, though this varies considerably by micro-location and property type.
Vacancy rates across different neighborhoods in Ethiopia realistically range from around 4% in high-demand areas with good transport links to 10% or higher in poorly connected or overpriced locations.
The main factor that currently drives vacancy rates up or down in Ethiopia is micro-location fit, meaning whether the property matches the needs of its target tenant base in terms of water and power reliability, security, and transport access.
Ethiopia's vacancy rate of around 6% is relatively low compared to many African markets, which reflects the persistent structural undersupply of formal housing in Addis Ababa and other urban centers.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Ethiopia.
What's the rent-to-price ratio in Ethiopia as of 2026?
As of early 2026, the average rent-to-price ratio in Ethiopia is approximately 0.8% per month, which translates to around 9.5% per year when expressed as an annual gross yield.
A rent-to-price ratio of 0.8% or higher per month is generally considered favorable for buy-to-let investors in Ethiopia, and this ratio directly corresponds to the gross rental yield since multiplying monthly rent-to-price by 12 gives you the annual return.
Ethiopia's rent-to-price ratio of around 0.8% per month is stronger than what you would find in most established African markets like South Africa or Morocco, where ratios often fall closer to 0.4% to 0.6% per month.
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 Ethiopia give the best yields as of 2026?
Where are the highest-yield areas in Ethiopia as of 2026?
As of early 2026, the top three highest-yield neighborhoods in Ethiopia are Ayat, CMC, and Lebu in Addis Ababa, all of which benefit from affordable purchase prices and steady demand from local professionals.
In these top-performing areas like Ayat, CMC, and Lebu, gross rental yields typically range from 10% to 13%, which is well above the Addis Ababa average.
The main characteristic these high-yield areas share is that they offer relatively affordable entry prices while remaining well-connected to employment centers, which keeps tenant demand consistent in places like Ayat, CMC, Summit, and Jemo.
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 Ethiopia.
Where are the lowest-yield areas in Ethiopia as of 2026?
As of early 2026, the top three lowest-yield neighborhoods in Ethiopia are Bole, Old Airport (Bisrate Gabriel), and Kazanchis in Addis Ababa, where premium pricing compresses returns.
In these low-yield areas like Bole, Old Airport, and Kazanchis, gross rental yields typically range from just 6% to 8%, which is significantly below the broader market average.
The main reason yields are compressed in these areas of Ethiopia is that purchase prices have been driven up by strong expat and diplomatic demand, while rents, though high in absolute terms, have not risen proportionally.
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 Ethiopia.
Which areas have the lowest vacancy in Ethiopia as of 2026?
As of early 2026, the top three neighborhoods with the lowest residential vacancy rates in Ethiopia are Megenagna, Bole, and CMC in Addis Ababa, where tenant demand remains consistently strong year-round.
In these low-vacancy areas like Megenagna, Bole, and CMC, vacancy rates typically fall in the range of 3% to 5%, meaning landlords rarely experience extended periods without tenants.
The main demand driver that keeps vacancy low in these areas of Ethiopia is their proximity to major employment hubs and transport nodes, which ensures a constant flow of professionals and international workers seeking housing.
The trade-off investors typically face when targeting these low-vacancy areas in Ethiopia is that purchase prices tend to be higher, which means lower gross yields even though occupancy is more reliable.
Which areas have the most renter demand in Ethiopia right now?
The top three neighborhoods currently experiencing the strongest renter demand in Ethiopia are Bole for international tenants, Megenagna for local professionals, and Ayat for affordability-focused renters in Addis Ababa.
In the premium areas like Bole and Kazanchis, demand is driven by expats, diplomats, and diaspora returnees who prioritize reliable services and security, while in areas like Megenagna and CMC, demand comes from local professionals seeking good transport access.
In these high-demand neighborhoods of Ethiopia, well-priced rental listings typically get filled within two to four weeks, with furnished units in expat areas often finding tenants even faster.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Ethiopia.
Which upcoming projects could boost rents and rental yields in Ethiopia as of 2026?
As of early 2026, the top three upcoming projects expected to boost rents in Ethiopia are the Addis Ababa Urban Corridors Development Plan, Phase 2 of the La Gare project by Eagle Hills, and continued expansion of light rail connectivity in Addis Ababa.
The neighborhoods most likely to benefit from these projects are La Gare, Kazanchis, and areas along the 10.4-kilometer corridor route, where improved streetscapes and amenities should attract higher-paying tenants.
Once these projects are completed, investors might realistically expect rent increases of 5% to 15% in directly affected neighborhoods, though the exact impact will depend on how quickly the surrounding area develops complementary services.
You'll find our latest property market analysis about Ethiopia here.
Get fresh and reliable information about the market in Ethiopia
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What property type should I buy for renting in Ethiopia as of 2026?
Between studios and larger units in Ethiopia, which performs best in 2026?
As of early 2026, smaller units like studios and one-bedroom apartments tend to outperform larger units in Ethiopia in terms of both rental yield and occupancy because they match the affordability needs of the largest tenant segment.
Studios in Ethiopia typically deliver gross yields of 10% to 12% (roughly 300,000 to 500,000 ETB, or 2,400 to 4,000 USD, or 2,200 to 3,700 EUR in annual rent), while larger three-bedroom units often yield closer to 7% to 9% because purchase prices scale up faster than rents.
The main factor that explains why smaller units outperform in Ethiopia is the strong affordability pressure in Addis Ababa, where most renters simply cannot afford larger units and competition for compact apartments keeps vacancy low.
One scenario where larger units might actually be the better investment in Ethiopia is when targeting expat families or diplomatic tenants in prime areas like Bole, where furnished three-bedroom apartments can command premium rents with long lease terms.
What property types are in most demand in Ethiopia as of 2026?
As of early 2026, the most in-demand property type in Ethiopia is the mid-market condominium unit, particularly studios to two-bedrooms in well-connected sites across Addis Ababa.
The top three property types ranked by current tenant demand in Ethiopia are condominium units in affordable areas, mid-market apartments near transport hubs like Megenagna and CMC, and furnished apartments in expat neighborhoods like Bole and Old Airport.
The primary demographic trend driving this demand pattern in Ethiopia is rapid urbanization combined with a young workforce that needs affordable housing close to employment centers in Addis Ababa.
One property type that is currently underperforming in demand and likely to remain so in Ethiopia is the large unfurnished villa, which has a limited tenant pool and high carrying costs that make it difficult to achieve strong returns.
What unit size has the best yield per m² in Ethiopia as of 2026?
As of early 2026, the unit size range that delivers the best gross rental yield per square meter in Ethiopia is typically between 40 and 70 square meters, which corresponds to efficient one-bedroom and compact two-bedroom layouts.
For this optimal unit size in Ethiopia, the typical gross rental yield per square meter translates to roughly 800 to 1,200 ETB per month (about 6.50 to 10 USD, or 6 to 9 EUR), which is higher than what larger units achieve on a per-square-meter basis.
The main reason very small studios and large apartments tend to have lower yield per square meter in Ethiopia is that studios can suffer from reliability concerns that increase vacancy, while large units face a smaller tenant pool and proportionally lower rents relative to their size.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Ethiopia.
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 Ethiopia as of 2026?
What are typical property taxes and recurring local fees in Ethiopia as of 2026?
As of early 2026, annual property taxes for a typical rental apartment in Ethiopia are still being rolled out under the new Property Tax Proclamation, but landlords should budget approximately 0.5% to 1% of property value (roughly 25,000 to 100,000 ETB, or 200 to 800 USD, or 185 to 740 EUR annually for a mid-range unit).
Other recurring local fees landlords must budget for annually in Ethiopia include building service charges and municipal levies, which can add another 10,000 to 30,000 ETB (80 to 240 USD, or 75 to 220 EUR) depending on the property type and location.
These taxes and fees typically represent around 3% to 6% of gross rental income in Ethiopia, though this percentage may shift as property tax implementation becomes more standardized across regions.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Ethiopia.
What insurance, maintenance, and annual repair costs should landlords budget in Ethiopia right now?
Annual landlord insurance in Ethiopia, where coverage is available, typically costs around 0.1% to 0.3% of property value, which translates to roughly 5,000 to 30,000 ETB (40 to 240 USD, or 37 to 220 EUR) for a mid-range rental property.
The recommended annual maintenance and repair budget in Ethiopia is 1% to 2% of property value, which reflects the higher operational demands of properties that often require generator maintenance, water tank upkeep, and regular service work.
The type of repair expense that most commonly catches landlords off guard in Ethiopia is generator and water system failures, which can be costly to fix and directly impact tenant satisfaction and occupancy.
In total, landlords in Ethiopia should realistically budget around 100,000 to 300,000 ETB annually (800 to 2,400 USD, or 740 to 2,200 EUR) for insurance, maintenance, and repairs combined on a typical mid-range rental property.
Which utilities do landlords typically pay, and what do they cost in Ethiopia right now?
In Ethiopia, landlords of high-end furnished rentals typically cover water, electricity, and sometimes internet, while in mass-market condos and unfurnished rentals, tenants usually pay their own utilities directly.
When landlords do pay utilities in a furnished Ethiopian rental, the estimated monthly cost ranges from 5% to 12% of rent, which can translate to 3,000 to 15,000 ETB (24 to 120 USD, or 22 to 110 EUR) depending on generator use and water pumping needs.
What does full-service property management cost, including leasing, in Ethiopia as of 2026?
As of early 2026, the typical monthly property management fee in Ethiopia ranges from 6% to 10% of collected rent, which translates to roughly 3,000 to 10,000 ETB (24 to 80 USD, or 22 to 74 EUR) per month for a mid-range rental.
The typical leasing or tenant-placement fee charged on top of ongoing management in Ethiopia is around half a month to one full month of rent, which adds approximately 15,000 to 50,000 ETB (120 to 400 USD, or 110 to 370 EUR) each time a new tenant is placed.
What's a realistic vacancy buffer in Ethiopia as of 2026?
As of early 2026, landlords in Ethiopia should set aside approximately 8% of annual rental income as a vacancy buffer, which accounts for tenant turnover and re-letting time between occupancies.
The typical number of vacant weeks per year landlords experience in Ethiopia is around three to five weeks, though this can be shorter in high-demand areas like Megenagna or Bole and longer in less liquid outer neighborhoods.
Buying real estate in Ethiopia 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 Ethiopia, 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 |
|---|---|---|
| Ethiopian Statistical Service (ESS) | Ethiopia's official national statistics agency and the primary source for inflation and macroeconomic data. | We used ESS-linked inflation and CPI series to update 2023 rent and price observations to early 2026. We also ensured our assumptions stayed consistent with Ethiopia's cooling inflation regime. |
| Trading Economics | A widely-used secondary aggregator that clearly attributes Ethiopia inflation data to ESS with timely releases. | We used it to pin down late-2025 inflation so our January 2026 updates weren't based on stale data. We treated it as a convenience mirror of official ESS data. |
| Knight Frank Ethiopia | A major international real estate consultancy with a flagship Africa research program covering Ethiopia. | We used it to identify where prime demand concentrates in Addis Ababa and which named districts matter most. We also used it to ground what makes Ethiopia's market unique. |
| Miles Ethiopia Rental Report H1 2023 | A specialist on-the-ground research provider publishing neighborhood-level rent observations for Addis Ababa. | We used it as our anchor rent dataset with explicit ETB per month figures by area and property type. We then uplifted those anchors to early 2026 using Ethiopia's inflation path. |
| Miles Ethiopia Sales Report H2 2023 | A structured local dataset with explicit ETB per square meter and transaction-style price bands. | We used it as our anchor purchase price dataset to compute gross yields via rent divided by price. We also modeled neighborhood yield dispersion using this data. |
| Miles Ethiopia Condominium Report H1 2023 | One of the few structured published snapshots for Addis Ababa's mass-market condominium rental segment. | We used it to represent mass-market condo rents from studios to three-bedrooms. We used it to explain why yields can be high outside the prime expat submarket. |
| Ethiopia Ministry of Justice | Official government publication of the national Property Tax Proclamation legal text. | We used it to describe what is changing structurally on property taxes nationwide. We used it to justify using buffers rather than pretending taxes are stable yet. |
| Ethiopian Electric Utility (EEU) | Official utility source for how electricity billing is calculated and tariff components. | We used it to frame which utilities landlords often cover in furnished rentals. We used it to keep net-yield utility budgeting grounded in real tariff structures. |
| Addis Ababa Water and Sewerage Authority | Official city utility source for water and sewer tariffs in Addis Ababa. | We used it to anchor water and sewer as real recurring costs in Addis Ababa. We used it to justify why landlords often bundle water into rent for higher-end units. |
| Housing Finance Africa / World Bank Study | Produced by a recognized housing research institution with World Bank and government supervision. | We used it for the structural supply-side story that explains persistent rental pressure in Ethiopia. We used it as qualitative validation of why vacancy stays modest in Addis Ababa. |
| UN World Population Prospects | The standard global reference for demographic baselines and urbanization data. | We used UN population framing to contextualize demand pressure from urban growth and migration. We used it to cross-check that Addis Ababa's rental market is unusually demand-driven. |
| Addis Ababa City Government Charter | An official legal document hosted on a federal legal information portal. | We used it to support that Addis Ababa has its own governance and tax-administration framework. We used it to justify why Ethiopia yields are in practice heavily Addis-centric. |
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