Authored by the expert who managed and guided the team behind the Nigeria Property Pack
Yes, the analysis of Lagos' property market is included in our pack
Lagos is one of Africa's most dynamic property markets, and understanding rental yields in Lagos in 2026 is essential for anyone looking to invest here.
This article breaks down current rental yields in Lagos, what affects them, and which neighborhoods deliver the best returns for landlords.
We keep this blog post updated with the latest data so you always have fresh information on Lagos rental market performance.
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 Lagos.
Insights
- Lagos rental yields in 2026 average 6-8% gross in mid-market areas like Yaba and Lekki, but drop to 3-5% in luxury neighborhoods like Ikoyi where purchase prices are much higher.
- The 10% withholding tax on rental income catches many first-time Lagos landlords by surprise, as it's deducted at source before you receive payment.
- Vacancy rates in prime Lagos areas sit at just 3-8% in 2026, which is unusually tight by global standards and gives landlords strong pricing power.
- Mainland areas like Yaba, Maryland, and Gbagada deliver yields of 7-9% and show better resilience during economic downturns than Island properties.
- Studios and compact 1-bedroom apartments in Lagos generate the highest yields per square meter, often 1-2% more than larger family units.
- The Lagos-Calabar Coastal Highway's first section opened in 2025, and properties within 5km of this route are already seeing 25-40% price increases.
- Well-priced Lagos rentals typically find tenants within 30-90 days, but overpriced units can sit empty for 6 months or longer.
- Property management in Lagos costs 10-15% of rent, plus a one-time tenant placement fee equal to about one month's rent.
- Rent growth in Lagos for 2026 is expected between 10-25%, with prime submarkets potentially seeing the highest increases due to limited supply.
- Ibeju-Lekki land has appreciated over 300% in the past decade, driven by the Dangote Refinery and Lekki Deep Sea Port developments.
What are the rental yields in Lagos as of 2026?
What's the average gross rental yield in Lagos as of 2026?
As of early 2026, the average gross rental yield for residential properties in Lagos sits at around 6-8% per year for mid-market properties, though this figure varies significantly depending on location and property type.
The realistic range of gross rental yields in Lagos stretches from about 3% in ultra-luxury areas up to 9% in value-focused mainland neighborhoods, with most typical properties falling somewhere in the 5-8% range.
Lagos rental yields compare favorably to other major African cities, matching Johannesburg's 6-9% range and exceeding Accra and Nairobi's typical 4-7% yields, though Lagos carries additional currency and political risk premiums.
The single most important factor influencing gross rental yields in Lagos right now is the massive gap between property prices on Lagos Island versus the Mainland, with Island properties often costing 3-5 times more while rents don't scale proportionally.
What's the average net rental yield in Lagos as of 2026?
As of early 2026, the average net rental yield in Lagos typically falls between 4-6% per year after accounting for all operating costs, which represents a drop of about 1.5-2.5% from gross yields.
The typical difference between gross and net rental yields in Lagos ranges from 1.5% to 2.5% of property value annually, depending on how efficiently you manage expenses and how often you experience vacancy periods.
The recurring expense that most significantly reduces gross yield to net yield in Lagos is the combination of property management fees (10-15% of rent) and the 10% withholding tax on rental income, which together can take nearly a quarter of your gross rental income.
The realistic range of net rental yields for standard investment properties in Lagos spans from about 2% in luxury Island areas to 7% in well-managed mainland properties, with most investors landing between 4-5.5% net.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Lagos.
We made this infographic to show you how property prices in Nigeria 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 Lagos in 2026?
In Lagos in 2026, a gross rental yield of 7% or higher is generally considered "good" by local investors, as this level provides a meaningful premium over alternative investments while still offering manageable risk.
The threshold that typically separates average-performing Lagos properties from high-performing ones sits at around 8% gross yield, which usually means targeting mid-market areas like Yaba or Lekki Phase 1 rather than premium luxury neighborhoods.
How much do yields vary by neighborhood in Lagos as of 2026?
As of early 2026, the spread in gross rental yields between Lagos neighborhoods ranges from about 3% in the most expensive areas to nearly 9% in value-focused zones, creating a potential 6% difference based purely on location choice.
The neighborhoods that typically deliver the highest rental yields in Lagos are mainland locations like Yaba (popular with tech workers), Surulere, Ikeja, and parts of Gbagada, where purchase prices remain reasonable but rental demand stays strong from young professionals.
The neighborhoods that typically deliver the lowest rental yields in Lagos are ultra-premium areas like Banana Island, Ikoyi, and Victoria Island, where property prices are extremely high but rents don't scale proportionally, compressing yields to just 3-5%.
The main reason yields vary so much across Lagos neighborhoods is the disconnect between purchase prices and rents in luxury areas, where buyers pay massive premiums for prestige and security while rental rates can only stretch so far even for high-income tenants.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Lagos.
How much do yields vary by property type in Lagos as of 2026?
As of early 2026, gross rental yields across different property types in Lagos range from about 3-4% for large luxury apartments and mansions up to 8-9% for compact studios and 1-bedroom units in high-demand locations.
The property type that currently delivers the highest average gross rental yield in Lagos is the studio or compact 1-bedroom apartment in areas like Yaba, Lekki Phase 1, or Surulere, where strong demand from young professionals keeps vacancy low and rents competitive.
The property type that currently delivers the lowest average gross rental yield in Lagos is the large luxury property, such as 4-bedroom apartments or standalone houses in Ikoyi or Banana Island, where the high purchase price crushes the yield even though absolute rents are substantial.
The key reason yields differ between property types in Lagos is that rent per square meter is highest for smaller units because tenants pay a premium for convenience and location, while larger properties spread that premium across more space, diluting the return.
By the way, you might want to read the following:
What's the typical vacancy rate in Lagos as of 2026?
As of early 2026, the typical residential vacancy rate in Lagos sits at around 3-8% in prime areas like Victoria Island, Ikoyi, and Lekki Phase 1, which is remarkably tight by global standards.
The realistic range of vacancy rates across Lagos neighborhoods stretches from as low as 2-3% in high-demand central areas to 15-20% in oversupplied or less accessible locations on the city outskirts.
The main factor that currently drives vacancy rates up or down in Lagos is accurate pricing, with well-priced rentals typically finding tenants within 30-90 days while overpriced units can sit empty for 6 months or longer.
Lagos vacancy rates are lower than many would expect for an emerging market because the chronic housing undersupply, with Nigeria needing millions more units than current construction provides, keeps demand pressure consistently high.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Lagos.
What's the rent-to-price ratio in Lagos as of 2026?
As of early 2026, the average monthly rent-to-price ratio in Lagos sits at approximately 0.5-0.7% per month in mid-market areas, which translates to a 6-8% annualized gross yield.
A rent-to-price ratio of 0.6% or higher per month is generally considered favorable for buy-to-let investors in Lagos, and this ratio directly determines your gross rental yield when multiplied by 12 months.
Lagos rent-to-price ratios compare reasonably well to other African commercial capitals, sitting in a similar range to Johannesburg but offering higher growth potential, though premium Lagos areas compress ratios below 0.4% due to elevated property prices.
We have made this infographic to give you a quick and clear snapshot of the property market in Nigeria. 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 Lagos give the best yields as of 2026?
Where are the highest-yield areas in Lagos as of 2026?
As of early 2026, the top three highest-yield neighborhoods in Lagos are Yaba (driven by tech ecosystem demand), Surulere (affordable with strong rental base), and mainland hubs like Maryland and Gbagada (offering 7-9% gross yields).
The estimated average gross rental yield range in these top-performing Lagos areas sits between 7-9%, with some well-positioned studios and 1-bedroom units pushing even higher when efficiently managed.
The main characteristic these high-yield Lagos areas share is the combination of reasonable entry prices and consistent tenant demand from young professionals, tech workers, and middle-income families who prioritize commute times and lifestyle amenities.
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 Lagos.
Where are the lowest-yield areas in Lagos as of 2026?
As of early 2026, the top three lowest-yield neighborhoods in Lagos are Banana Island (yields of just 2-3%), Ikoyi (3-4%), and parts of Victoria Island (3-5%), where extremely high property prices compress returns despite premium rents.
The estimated average gross rental yield range in these low-yield Lagos areas falls between 2-5%, significantly below the citywide average of 6-8% seen in mid-market neighborhoods.
The main reason yields are compressed in these premium Lagos areas is that purchase prices have soared to levels where even luxury rents of 1.5-2.5 million Naira per month can't generate competitive percentage returns on the capital invested.
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 Lagos.
Which areas have the lowest vacancy in Lagos as of 2026?
As of early 2026, the top three neighborhoods with the lowest residential vacancy rates in Lagos are Lekki Phase 1 (2-4% vacancy), Victoria Island (3-5%), and Yaba (4-6%), where demand consistently outpaces available supply.
The estimated vacancy rate range in these low-vacancy Lagos areas sits between 2-6%, meaning landlords typically experience less than 3 weeks of vacancy per year when properties are priced correctly.
The main demand driver that keeps vacancy low in these Lagos areas is the concentration of employment hubs, business districts, and lifestyle amenities that attract corporate executives, expatriates, tech workers, and young professionals.
The trade-off investors typically face when targeting these low-vacancy Lagos areas is lower yields, as the same desirability that keeps tenants competing for units also drives up purchase prices, compressing your percentage return.
Which areas have the most renter demand in Lagos right now?
The top three neighborhoods currently experiencing the strongest renter demand in Lagos are Lekki (for lifestyle amenities), Yaba (for its tech ecosystem and startup culture), and Victoria Island (for proximity to business districts).
The type of renter profile driving most of the demand in these Lagos areas includes young professionals working in finance and technology, expatriate families on housing packages, returning diaspora Nigerians, and corporate executives seeking quality accommodation.
In these high-demand Lagos neighborhoods, well-priced rental listings typically get filled within 30-45 days, with premium units sometimes going under offer within the first two weeks of marketing.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Lagos.
Which upcoming projects could boost rents and rental yields in Lagos as of 2026?
As of early 2026, the top three infrastructure projects expected to boost rents in Lagos are the Lagos-Calabar Coastal Highway (section 1 opened in 2025), the ongoing expansion of the Lekki Deep Sea Port, and the anticipated Fourth Mainland Bridge.
The neighborhoods most likely to benefit from these Lagos projects include Ibeju-Lekki (already seeing 25-40% appreciation), Ajah, Sangotedo, and areas along the Lekki-Epe corridor that will gain improved connectivity and reduced travel times.
Investors might realistically expect rent increases of 10-20% within 2-3 years of project completion in affected areas, with land values near the Lagos-Calabar Highway corridor already showing gains of 25-40% since construction began.
You'll find our latest property market analysis about Lagos here.
Get fresh and reliable information about the market in Lagos
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What property type should I buy for renting in Lagos as of 2026?
Between studios and larger units in Lagos, which performs best in 2026?
As of early 2026, studios and compact 1-bedroom apartments perform best in terms of both rental yield and occupancy in Lagos, consistently outperforming larger units on percentage returns.
The typical gross rental yield range for studios in Lagos sits at 7-9% (around 150,000-350,000 Naira monthly rent, or $100-230 USD / 95-220 EUR), compared to 5-7% for larger 2-3 bedroom units that command higher absolute rents but lower percentage returns.
The main factor explaining why compact units outperform in Lagos is that rent per square meter is significantly higher for smaller spaces, and the deeper tenant pool of young singles and couples keeps vacancy lower and turnover faster.
One scenario where larger Lagos units might be the better investment is when targeting family tenants in stable areas like Lekki or Ajah, where 2-3 bedroom apartments attract longer lease terms and more predictable occupancy from established households.
What property types are in most demand in Lagos as of 2026?
As of early 2026, the most in-demand property type in Lagos is the 2-3 bedroom apartment in mid-market areas like Lekki, Yaba, and Surulere, which balances affordability with space for young families and professionals.
The top three property types ranked by current tenant demand in Lagos are: compact 1-2 bedroom apartments near employment hubs, 3-bedroom family units in areas with good schools and security, and serviced apartments in business districts for corporate tenants.
The primary demographic trend driving this demand pattern in Lagos is the massive young professional population working in technology, finance, and services, combined with the 80%+ of Lagos residents who rent rather than buy due to affordability constraints.
One property type currently underperforming in demand in Lagos is the oversupplied luxury penthouse and high-end 4+ bedroom apartment segment in areas like Ikoyi and Banana Island, where the tenant pool is limited and vacancy risk has increased.
What unit size has the best yield per m² in Lagos as of 2026?
As of early 2026, the unit size range that delivers the best gross rental yield per square meter in Lagos is 25-50 square meters, covering studios and compact 1-bedroom apartments.
The typical gross rental yield per square meter for this optimal unit size in Lagos ranges from 8-10% annually (roughly 5,000-8,000 Naira per square meter monthly, or $3.30-5.30 USD / 3.10-5.00 EUR), outperforming larger units by 1-3%.
The main reason smaller Lagos units deliver higher yield per square meter is that tenants pay a convenience and location premium that doesn't scale linearly with space, so compact units capture more rent relative to their purchase cost.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Lagos.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Nigeria 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 Lagos as of 2026?
What are typical property taxes and recurring local fees in Lagos as of 2026?
As of early 2026, the estimated annual property tax (Land Use Charge) for a typical rental apartment in Lagos ranges from 0.0394% of property value for owner-occupied units to 0.394% for investment properties, meaning a 100 million Naira property pays around 394,000 Naira annually ($260 USD / 245 EUR).
Other recurring local fees Lagos landlords must budget for annually include estate service charges (100,000-500,000 Naira per year, or $65-330 USD / 62-310 EUR), the 10% withholding tax on rental income deducted at source, and any building maintenance levies.
These taxes and fees typically represent about 3-5% of gross rental income in Lagos when combined, with the withholding tax alone accounting for a significant 10% of your rental receipts before you even see the money.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Lagos.
What insurance, maintenance, and annual repair costs should landlords budget in Lagos right now?
The estimated annual landlord insurance cost for a typical rental property in Lagos ranges from 50,000-200,000 Naira per year ($33-130 USD / 31-125 EUR), depending on property value, location, and coverage level.
The recommended annual maintenance and repair budget for Lagos rental properties sits at around 1-2% of property value per year, or roughly 10-15% of annual rental income, to cover routine upkeep and unexpected fixes.
The type of repair expense that most commonly catches Lagos landlords off guard is generator and inverter maintenance, as reliable backup power is essential for tenant retention but involves significant ongoing fuel, servicing, and replacement costs.
The total combined annual cost Lagos landlords should realistically budget for insurance, maintenance, and repairs ranges from 500,000-2,000,000 Naira per year ($330-1,300 USD / 310-1,250 EUR), depending on property size and age.
Which utilities do landlords typically pay, and what do they cost in Lagos right now?
In most Lagos residential leases, tenants typically pay for electricity (including generator diesel), water, internet, and waste disposal, while landlords usually cover property insurance, Land Use Charge, and any extraordinary building repairs.
The estimated monthly cost for landlord-paid utilities in a typical Lagos rental unit is relatively minimal at 10,000-30,000 Naira per month ($6-20 USD / 6-19 EUR) for common area electricity and building maintenance, though this varies significantly by property type and estate.
What does full-service property management cost, including leasing, in Lagos as of 2026?
As of early 2026, the estimated monthly property management fee for full-service management in Lagos ranges from 10-15% of collected rent, which on a 300,000 Naira monthly rent translates to 30,000-45,000 Naira ($20-30 USD / 19-28 EUR) per month.
The typical leasing or tenant-placement fee charged on top of ongoing management in Lagos equals approximately one month's rent, sometimes split between landlord and tenant, with lease renewal fees usually running about half a month's rent.
What's a realistic vacancy buffer in Lagos as of 2026?
As of early 2026, Lagos landlords should set aside approximately 6-10% of annual rental income as a vacancy buffer to cover the inevitable gaps between tenants.
The typical number of vacant weeks per year Lagos landlords experience ranges from 3-5 weeks for well-priced, well-located properties, though overpriced or poorly positioned units can sit empty significantly longer.
Buying real estate in Lagos 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 Lagos, 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 Name | Why It's Authoritative | How We Used It |
|---|---|---|
| Nigeria Housing Market | It's a specialized Nigerian real estate research platform that aggregates pricing and market data across Lagos and other major cities. | We used it to anchor property price-per-square-meter estimates across different Lagos neighborhoods. We also referenced their rental yield benchmarks and market forecasts. |
| Nigeria Property Centre | It's one of Nigeria's largest property listing platforms with extensive real-time rental and sales data across Lagos. | We used it to validate rental price ranges by neighborhood and property type. We also analyzed listing turnover to estimate vacancy patterns. |
| PropertyPro Nigeria | It's a major Nigerian property portal with comprehensive listing data and landlord resources. | We used it to cross-check rental yields and verify neighborhood-level rent variations. We also referenced their landlord expense documentation. |
| Estate Intel | It's Africa's leading real estate market research and data provider with institutional-grade analysis. | We used it to benchmark Lagos yields against other African cities. We also referenced their reports on rental market performance and investor returns. |
| Lagos Internal Revenue Service (LIRS) | It's the official Lagos State tax authority responsible for property-related taxation. | We used it to confirm Land Use Charge rates and withholding tax requirements. We referenced their published tax schedules for accuracy. |
| Lagos State Lands Bureau | It's the official government agency overseeing land administration and property registration in Lagos. | We used it to verify transaction fee schedules and Governor's Consent requirements. We referenced their published fee structures. |
| Nairametrics | It's Nigeria's leading financial and economic news platform with extensive infrastructure project coverage. | We used it to track progress on major Lagos infrastructure projects. We referenced their reporting on the Fourth Mainland Bridge and coastal highway. |
| BusinessDay Nigeria | It's Nigeria's most respected financial newspaper with in-depth real estate market coverage. | We used it to understand infrastructure impacts on property values. We referenced their analysis of the Lagos-Calabar highway effects on prices. |
| The Guardian Nigeria | It's a major Nigerian newspaper with comprehensive coverage of property and infrastructure developments. | We used it to verify infrastructure project timelines and government announcements. We cross-referenced development updates with official sources. |
| Propsult | It's a Nigerian property management resource platform with detailed industry guides and fee structures. | We used it to establish property management fee benchmarks for Lagos. We referenced their breakdown of landlord costs and service charges. |
| F-Sky Homes | It's a Lagos-based real estate company with detailed market insights and investment analysis. | We used it to validate yield ranges across different Lagos market segments. We referenced their neighborhood-specific performance data. |
| Mixta Africa | It's a major Nigerian real estate developer with extensive market knowledge and regulatory insights. | We used it to understand Land Use Charge mechanics and compliance requirements. We referenced their investor guidance materials. |
| Wikipedia (Fourth Mainland Bridge) | It provides a well-sourced overview of Lagos infrastructure projects with citations to official announcements. | We used it to verify Fourth Mainland Bridge specifications and timeline history. We cross-referenced with news sources for current status. |
| Infrastructure Global | It's an international infrastructure project database with detailed technical specifications. | We used it to understand the Fourth Mainland Bridge design and economic impact projections. We referenced their project scope documentation. |
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