Authored by the expert who managed and guided the team behind the Nigeria Property Pack
Everything you need to know before buying real estate is included in our Nigeria Property Pack
Wondering what rental yields you can actually expect from Nigerian real estate in 2026?
We've gathered the latest data on gross and net yields, vacancy rates, and neighborhood-level performance across Lagos, Abuja, and other major cities.
This article is updated regularly to reflect current market conditions in Nigeria's rental property 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 Nigeria.
Insights
- Nigeria's average gross rental yield sits around 7.5% in early 2026, but prime Lagos neighborhoods like Ikoyi can drop as low as 4.5% while middle-market areas in Abuja push past 8%.
- The gap between gross and net yields in Nigeria typically runs about 2.2 percentage points, mostly eaten up by vacancy risk and maintenance costs rather than taxes.
- Smaller apartments in Nigeria consistently outperform larger homes on yield, because the tenant pool for affordable units is simply much deeper.
- Lagos landlords face the Land Use Charge as their main recurring levy, while Abuja property owners deal with Ground Rent obligations enforced by the FCT Administration.
- A realistic vacancy buffer for Nigerian rental properties in 2026 is about two months per year, even if your actual vacancy runs closer to one month in good times.
- High-yield neighborhoods in Nigeria share one trait: they sit close to jobs and have purchase prices that haven't run too far ahead of what tenants can afford.
- Property management fees in Nigeria typically range from 5% to 10% of annual rent, with leasing fees adding a separate one-time cost when placing new tenants.
- Nigeria's structural housing shortage, estimated at over 20 million units, keeps rental demand strong even when the economy faces pressure.
What are the rental yields in Nigeria as of 2026?
What's the average gross rental yield in Nigeria as of 2026?
As of early 2026, the average gross rental yield across Nigeria's residential property market is approximately 7.5% per year when you blend together different cities, neighborhoods, and property types.
Most standard residential investments in Nigeria generate gross yields somewhere between 4% and 12%, with the exact figure depending heavily on whether you're buying in a prestige district or a middle-market area with strong renter demand.
This 7.5% national average actually sits above what you'd find in many developed markets, reflecting Nigeria's relatively lower property prices combined with persistent rental demand driven by the country's housing shortage.
The single biggest factor pushing yields up or down in Nigeria right now is the gap between purchase prices and local tenant affordability, which is why prime areas with inflated capital values tend to deliver much weaker rental returns than practical middle-income neighborhoods.
What's the average net rental yield in Nigeria as of 2026?
As of early 2026, the average net rental yield in Nigeria is approximately 5.3% per year after accounting for typical landlord expenses and vacancy.
The gap between gross and net yields in Nigeria usually runs about 2 to 2.5 percentage points, which means landlords lose roughly a quarter to a third of their gross income to operating costs.
Vacancy and rent collection friction represent the biggest cost category eating into Nigerian landlords' returns, often more impactful than recurring taxes or maintenance in a typical year.
Realistic net yields for most standard Nigerian rental properties fall in the 3.5% to 7% range, with the lower end reflecting prime areas where capital values are high and the upper end representing well-managed middle-market investments.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Nigeria.
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 Nigeria in 2026?
Local investors in Nigeria generally consider a gross rental yield of 8% or higher to be good, since this provides enough cushion to remain profitable after expenses, repairs, and the occasional vacant month.
Properties yielding below 6% gross are typically seen as average performers in Nigeria, while anything above 10% gross moves into high-yield territory and usually signals either a middle-market location or a particularly well-priced acquisition.
How much do yields vary by neighborhood in Nigeria as of 2026?
As of early 2026, gross rental yields in Nigeria can vary by a factor of two or more between neighborhoods, with some prestige areas delivering just 3% to 4% while practical middle-market districts push past 10%.
The highest-yield neighborhoods in Nigeria tend to be middle-income, job-accessible areas like Yaba, Surulere, and Ajah in Lagos, or Gwarinpa, Jabi, and Utako in Abuja, where purchase prices remain affordable relative to local rent levels.
The lowest-yield neighborhoods are typically prestige and expat-heavy districts like Ikoyi, Banana Island, and Victoria Island in Lagos, or Maitama and Asokoro in Abuja, where capital values have inflated far beyond what rents can justify.
This variation happens because property prices in Nigeria's prime areas are driven by status and wealth preservation rather than rental income, while middle-market prices stay anchored to what local tenants can actually afford to pay.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Nigeria.
How much do yields vary by property type in Nigeria as of 2026?
As of early 2026, gross rental yields in Nigeria range from around 3% to 5% for large detached homes and luxury villas, up to 8% to 12% for compact apartments and studios in well-located middle-market areas.
Smaller apartments, particularly studios, one-bedrooms, and compact two-bedrooms, currently deliver the highest average gross rental yields in Nigeria because they attract the broadest tenant pool and rent more quickly.
Large detached houses and luxury villas typically deliver the lowest gross yields in Nigeria, since their purchase prices escalate faster than the rents wealthy tenants are willing to pay.
The key reason yields differ by property type in Nigeria is that smaller units benefit from mass-market affordability, while larger homes compete for a narrow tenant pool that has more negotiating power and more alternatives.
By the way, you might want to read the following:
What's the typical vacancy rate in Nigeria as of 2026?
As of early 2026, the average residential vacancy rate in Nigeria sits around 10%, which translates to roughly one to one-and-a-half months of empty time per year for a typical rental property.
Vacancy rates across Nigerian neighborhoods range from as low as 5% in well-priced middle-market areas near employment centers, up to 15% to 25% in overpriced luxury segments where rents are set too ambitiously.
The main factor driving vacancy rates in Nigeria right now is the match between asking rent and local tenant affordability, with properties priced within the mass-market band filling much faster than aspirationally priced units.
Nigeria's overall vacancy rate is relatively contained compared to what you might expect given economic pressures, largely because the country's severe housing shortage keeps demand strong for appropriately priced units.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Nigeria.
What's the rent-to-price ratio in Nigeria as of 2026?
As of early 2026, the average rent-to-price ratio in Nigeria is approximately 0.63% per month, which annualizes to roughly 7.5% and directly corresponds to the gross rental yield.
A rent-to-price ratio above 0.6% monthly, or above 7% annually, is generally considered favorable for buy-to-let investors in Nigeria because it suggests the property can generate meaningful income relative to its purchase cost.
Nigeria's rent-to-price ratio compares favorably to more developed markets like South Africa or Kenya's prime urban areas, where capital appreciation expectations often compress yields below 5%.
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 Nigeria give the best yields as of 2026?
Where are the highest-yield areas in Nigeria as of 2026?
As of early 2026, the highest-yield neighborhoods in Nigeria include Yaba, Surulere, and Ajah in Lagos, along with Gwarinpa, Jabi, and Lugbe in Abuja, plus select pockets in Port Harcourt like Woji and parts of Trans Amadi.
Gross rental yields in these top-performing Nigerian neighborhoods typically range from 7% to 12%, with the exact figure depending on the specific property and how well it matches local tenant demand.
The main characteristic these high-yield areas share is that they combine strong employment access with purchase prices that haven't inflated beyond what working tenants can afford, creating a sustainable rent-to-price balance.
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 Nigeria.
Where are the lowest-yield areas in Nigeria as of 2026?
As of early 2026, the lowest-yield neighborhoods in Nigeria are the prestige districts: Ikoyi, Banana Island, and Victoria Island in Lagos, plus Maitama and Asokoro in Abuja.
Gross rental yields in these premium Nigerian neighborhoods typically range from just 3% to 6%, with some trophy properties in Banana Island dipping even lower.
Yields are compressed in these areas because property prices are driven by wealth preservation, status, and capital appreciation expectations rather than rental income fundamentals.
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 Nigeria.
Which areas have the lowest vacancy in Nigeria as of 2026?
As of early 2026, the neighborhoods with the lowest residential vacancy rates in Nigeria include Yaba, Surulere, and Ikeja in Lagos, along with Gwarinpa, Jabi, and Utako in Abuja.
Vacancy rates in these low-vacancy Nigerian neighborhoods typically run between 5% and 8%, meaning landlords often see less than one month of vacancy per year when properties are priced correctly.
The main demand driver keeping vacancy low in these areas is their proximity to employment centers combined with rental price points that match what the large pool of young professionals, civil servants, and SME workers can afford.
The trade-off investors face when targeting these low-vacancy Nigerian neighborhoods is that capital appreciation may be slower compared to prestige areas, so the investment thesis relies more on steady cash flow than on price gains.
Which areas have the most renter demand in Nigeria right now?
The neighborhoods experiencing the strongest renter demand in Nigeria right now are Ikeja, Yaba, and the Lekki-Ajah corridor in Lagos, along with Wuse, Jabi, and Gwarinpa in Abuja.
The renter profile driving most of this demand consists of young professionals, tech workers, civil servants, and small business employees who need affordable housing within reasonable commuting distance of their workplaces.
In these high-demand Nigerian neighborhoods, well-priced rental listings typically get filled within two to four weeks, compared to months of marketing time for overpriced units in softer markets.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Nigeria.
Which upcoming projects could boost rents and rental yields in Nigeria as of 2026?
As of early 2026, the top infrastructure projects expected to boost Nigerian rents include transport upgrades along the Lekki-Epe corridor in Lagos, continued district development improving access to Lugbe and Airport Road zones in Abuja, and commercial node expansions in secondary cities.
The neighborhoods most likely to benefit from these projects include Ajah, Sangotedo, and Epe in Lagos, Lugbe and parts of the Airport Road axis in Abuja, and growth corridors in Port Harcourt and Ibadan.
Investors might realistically expect rent increases of 10% to 20% over three to five years in areas directly served by new transport links or commercial developments, though the exact uplift depends on how quickly infrastructure actually delivers improved access.
You'll find our latest property market analysis about Nigeria here.
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What property type should I buy for renting in Nigeria as of 2026?
Between studios and larger units in Nigeria, which performs best in 2026?
As of early 2026, studios and compact one-to-two-bedroom apartments perform best in Nigeria in terms of both rental yield and occupancy, outperforming larger units in most market conditions.
Studios and small apartments in Nigeria typically yield between 8% and 12% gross (roughly ₦2.5 million to ₦6 million annually, or $1,500 to $3,600 USD, or €1,400 to €3,300 EUR), while larger three-bedroom units and houses often yield just 4% to 7%.
The main factor explaining this difference is tenant pool depth: far more Nigerians can afford rent on a small apartment than on a large family home, so smaller units fill faster and command better rent relative to price.
However, larger units can be the better choice when targeting corporate tenants or expatriate families who need space and are willing to sign longer leases with reliable payment, which can offset the lower yield with greater stability.
What property types are in most demand in Nigeria as of 2026?
As of early 2026, the most in-demand property type in Nigeria is the two-bedroom apartment in a secure, managed estate with reliable utilities.
The top three property types ranked by current tenant demand in Nigeria are: first, one-to-two-bedroom apartments; second, compact three-bedroom apartments or terraces; and third, modest semi-detached duplexes in middle-market estates.
The primary trend driving this demand pattern is Nigeria's young, urbanizing population seeking affordable, secure housing close to jobs, combined with households prioritizing estates that offer stable power and water.
Large luxury detached villas are currently underperforming in demand and will likely remain so, as their high rents limit the tenant pool and economic pressures keep most renters focused on affordability.
What unit size has the best yield per m² in Nigeria as of 2026?
As of early 2026, unit sizes between 40 and 70 square meters, typically studios and one-bedroom apartments, deliver the best gross rental yield per square meter in Nigeria.
The typical gross rental yield per square meter for these optimal-sized Nigerian units is around ₦50,000 to ₦100,000 per m² annually (roughly $30 to $60 USD per m², or €28 to €55 EUR per m²), depending on location and amenities.
Smaller units achieve higher yield per square meter because Nigerian tenants pay primarily for location, security, and reliable services rather than raw floor area, while very large units spread rent across more space without proportional rent increases.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Nigeria.
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 Nigeria as of 2026?
What are typical property taxes and recurring local fees in Nigeria as of 2026?
As of early 2026, annual property-related charges for a typical rental apartment in Lagos include the Land Use Charge, which can range from ₦50,000 to ₦500,000 per year (roughly $30 to $300 USD, or €28 to €275 EUR) depending on the property's assessed value and location.
Beyond the Land Use Charge in Lagos or Ground Rent in Abuja, Nigerian landlords should also budget for estate service charges, waste management fees, and occasional development levies, which together can add another ₦100,000 to ₦400,000 annually ($60 to $240 USD, or €55 to €220 EUR).
These taxes and recurring fees typically represent about 3% to 8% of gross rental income in Nigeria, though the percentage can be higher for lower-rent properties where fixed charges make up a larger share.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Nigeria.
What insurance, maintenance, and annual repair costs should landlords budget in Nigeria right now?
Annual landlord insurance for a typical Nigerian rental property costs approximately ₦50,000 to ₦200,000 (roughly $30 to $120 USD, or €28 to €110 EUR), though coverage varies significantly based on property value and policy scope.
Nigerian landlords should budget about 10% of annual rental income for maintenance and repairs, which for a property generating ₦3 million in rent means setting aside around ₦300,000 ($180 USD, or €165 EUR) per year.
The repair expense that most commonly catches Nigerian landlords off guard is generator and borehole maintenance, since properties with self-contained power and water systems face ongoing mechanical costs that can spike unexpectedly.
Adding insurance, maintenance, and a repair buffer together, Nigerian landlords should realistically budget ₦400,000 to ₦700,000 annually ($240 to $420 USD, or €220 to €385 EUR) for a standard rental property.
Which utilities do landlords typically pay, and what do they cost in Nigeria right now?
In most Nigerian long-term rental arrangements, tenants pay for day-to-day electricity and water, while landlords or estate management typically cover generator servicing, borehole upkeep, security, waste management, and common-area costs.
For landlord-paid utilities and estate contributions, Nigerian property owners should expect monthly costs of ₦30,000 to ₦100,000 ($18 to $60 USD, or €17 to €55 EUR), depending on whether the property is in a managed estate with shared amenities.
What does full-service property management cost, including leasing, in Nigeria as of 2026?
As of early 2026, full-service property management fees in Nigeria typically run between 5% and 10% of annual rent, which for a property generating ₦3 million annually means management costs of ₦150,000 to ₦300,000 ($90 to $180 USD, or €83 to €165 EUR).
Leasing or tenant-placement fees in Nigeria are usually charged as a separate one-time cost, commonly ranging from 5% to 10% of annual rent, though Lagos has been actively debating legislation to reduce these fees.
What's a realistic vacancy buffer in Nigeria as of 2026?
As of early 2026, Nigerian landlords should set aside approximately 15% to 17% of annual rental income as a vacancy buffer, which accounts for both empty periods and occasional rent collection delays.
This translates to roughly six to eight weeks of vacancy per year as a planning assumption, even though actual vacancy in a good year might be closer to four weeks for well-located, fairly priced properties.
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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 Nigeria, 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 |
|---|---|---|
| Nigeria National Bureau of Statistics (NBS) | It's Nigeria's official statistics agency, making it the baseline for nationally comparable economic data. | We used it to anchor the macro context around inflation and housing-related price pressures. We also used it to sanity-check whether our rent growth assumptions match official price trends. |
| NBS eLibrary (CPI reports) | It's the official archive where NBS publications can be verified and cross-referenced. | We used it as the audit trail for any CPI and housing-series references. We also validated dates and definitions for housing and rent components. |
| Nigeria CPI Housing Series (Knoema) | It's a transparent, queryable view of official NBS CPI items that can be cross-verified against NBS releases. | We used it to corroborate that rent-related price pressures were still meaningful heading into 2026. We treated it as a trend check rather than a direct yield input. |
| Lagos State Land Use Charge Portal | It's the official Lagos State channel for the Land Use Charge, a key recurring property levy. | We used it to frame the biggest recurring property-related cost landlords face in Lagos. We also ensured we described LUC correctly as the state's consolidated property charge. |
| Land Use Charge Law (Lagos State) PDF | It's the underlying legal text landlords and buyers can check line-by-line for accuracy. | We used it to describe what LUC is and isn't, avoiding folk explanations. We grounded the net-yield cost section in verifiable legal language. |
| Aluko & Oyebode (LUC Law Summary) | It's a top-tier Nigerian law firm summarizing legislation in plain English. | We used it to translate the LUC law into reader-friendly takeaways. We cross-checked this against the raw PDF wording for accuracy. |
| FCTA Notice on Ground Rent | It's the official FCT Administration communication about ground rent obligations and enforcement. | We used it to explain Abuja's recurring land-related payment in a verifiable way. We supported our net-yield recurring fees section for FCT properties. |
| World Bank Nigeria Development Update | It's a flagship, widely-cited international publication series for Nigeria's economy. | We used it to contextualize demand drivers like income pressure and inflation that affect rent affordability. We used it as a macro cross-check so our assumptions aren't detached from reality. |
| UN-Habitat (Housing Gap Report) | It's the UN agency focused on cities and housing, with globally comparable framing. | We used it to ground the structural undersupply story that supports rents in key Nigerian cities. We justified why vacancy can stay tight in some middle-market areas even when prices rise. |
| CAHF Nigeria Country Profile | It's a specialized, widely referenced African housing-market research institution. | We used it to triangulate housing deficit and finance constraints that shape rental demand. We supported why yield patterns differ so much between prime luxury and mass-market rentals. |
| Knight Frank Lagos Market Update | Knight Frank is a globally recognized real estate consultancy with established market research standards. | We used it to anchor Lagos market color on pricing, rent pressures, and segmentation. We sanity-checked our neighborhood-level yield hierarchy between prime and emerging corridors. |
| Northcourt Nigeria Real Estate Market Review | Northcourt is a major Nigerian real estate services and research firm with recurring market publications. | We used it to triangulate demand and supply dynamics beyond just Lagos. We supported why mid-market rentals can stay resilient even when luxury absorption slows. |
| Nigeria Property Centre (Methodology Page) | It's transparent about how its figures are computed using the median of listings in each locality. | We used it to justify treating portal data as an asking-price proxy with a clear method. We then discounted and triangulated rather than treating it as a perfect transaction database. |
| Nigeria Property Centre (Neighborhood Listings) | It's one of Nigeria's largest listing aggregators, publishing locality-level summary statistics. | We used it to compute gross yields as rent divided by price for real neighborhoods like Ikoyi, Lekki Phase 1, Maitama, and Gwarinpa. We cross-checked multiple neighborhoods to avoid one-area bias. |
| PropertyPro Nigeria | It's a major Nigerian property portal that shows updated locality summaries useful for cross-checking. | We used it as a second, independent portal to cross-validate rent and price levels from Nigeria Property Centre. We reduced the risk that one platform's listings skew the yield estimate. |
| Punch Newspapers | It's a long-running national newspaper, and the story cites the legislative process and named sources. | We used it to justify why transaction frictions like agent fees are a real cost of getting and keeping tenants in Lagos. We informed the leasing-cost assumptions in net yield calculations. |
| NIESV | It's the main professional body for estate surveyors and valuers in Nigeria. | We used it to ground the idea that property and valuation services follow professional standards. We used it as an authority anchor when interpreting management and agency fee practices. |
| ESVARBON | It's the profession's regulator, so it's the rules and registration authority. | We used it to support that regulated practitioners exist and that professional practice is structured. We used it as a credibility check when interpreting market-fee norms. |
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