Authored by the expert who managed and guided the team behind the Tanzania Property Pack
Everything you need to know before buying real estate is included in our Republic of the Congo Property Pack
If you're thinking about investing in rental property in Tanzania, understanding yields is essential before you commit your money.
We constantly update this blog post to reflect the latest data on Tanzania's rental market, so you always have current numbers to work with.
Below, you'll find everything from gross and net yields to vacancy rates, neighborhood comparisons, and the costs that eat into your returns.
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 Tanzania.
Insights
- Tanzania's average gross rental yield of around 8% in early 2026 places it among the higher-yielding markets in East Africa, particularly attractive for investors seeking income over capital gains.
- The gap between gross and net yields in Tanzania typically runs 2 to 3 percentage points, with the 10% withholding tax on rent being a major contributor to this reduction.
- Prime Dar es Salaam neighborhoods like Masaki and Oyster Bay often show vacancy rates of 10% to 20%, while mid-market areas like Sinza and Ubungo stay below 5%.
- Compact apartments and studios in Tanzania deliver net yields of 6.5% to 9%, while detached villas struggle to reach 5.5% due to higher maintenance and thinner tenant pools.
- Zanzibar's tourist-driven areas like Nungwi and Paje can offer strong short-let returns, but seasonality means investors need to budget for 2 to 3 months of vacancy annually.
- Property rates in Tanzania are now collected through electricity token purchases, with annual amounts ranging from TZS 18,000 to TZS 90,000 depending on the building category.
- BRT expansion along lines 4 and 5 in Dar es Salaam is expected to tighten vacancy and support rent growth in connected corridors like Ubungo over the next few years.
- Full-service property management in Tanzania typically costs 3% to 5% of monthly rent, plus around one month's rent for tenant placement.
Fact-checked and reviewed by our local expert
Grace Makoye 🇹🇿
Manager of Operations, Zinza Real Estate
What are the rental yields in Tanzania as of 2026?
What's the average gross rental yield in Tanzania as of 2026?
As of early 2026, the average gross rental yield across all residential property types in Tanzania is estimated at around 8%, which means landlords typically collect about TZS 8 in annual rent for every TZS 100 of property value.
That said, gross yields in Tanzania vary widely depending on location and property type, with most investors seeing returns somewhere between 6% and 11%.
Compared to many other East African markets, Tanzania's gross yields are competitive, sitting in the upper range thanks to relatively affordable property prices in cities like Dar es Salaam and Dodoma.
The single biggest factor shaping gross yields in Tanzania right now is the rent-to-price ratio in mid-market neighborhoods, where strong local demand keeps rents healthy without the inflated purchase prices you see in prime areas.
What's the average net rental yield in Tanzania as of 2026?
As of early 2026, the average net rental yield in Tanzania after all operating costs is estimated at around 5.5%, meaning about half a percentage point is lost for every percentage point of gross yield.
The typical gap between gross and net yields in Tanzania runs about 2 to 3 percentage points, which is significant and something every investor needs to factor into their calculations.
The expense that eats most heavily into Tanzania's gross yields is the 10% withholding tax on rent, which the government collects directly and affects your cashflow even if you can eventually credit it against other taxes.
Most standard investment properties in Tanzania deliver net yields between 4% and 8%, with the lower end typical for high-maintenance detached houses and the upper end achievable with well-located compact apartments.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Tanzania.
We made this infographic to show you how property prices in Tanzania 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 Tanzania in 2026?
In Tanzania's rental market as of 2026, a gross yield of 9% or higher is generally considered "good" by local investors, as this level provides enough cushion to cover costs and still deliver attractive net returns.
The threshold that separates average properties from high performers in Tanzania is typically around 6% net yield, because once you account for vacancy, maintenance, management fees, and taxes, anything below that starts to feel thin.
How much do yields vary by neighborhood in Tanzania as of 2026?
As of early 2026, net rental yields in Tanzania can differ by 2 to 6 percentage points between neighborhoods, which is a huge spread that makes location one of the most important investment decisions you'll make.
The highest-yield neighborhoods in Tanzania tend to be mid-market areas with deep local renter demand, like Sinza, Ubungo, and Tegeta in Dar es Salaam, or Kisasa and Ihumwa in Dodoma, where purchase prices stay reasonable while rents remain strong.
On the flip side, the lowest yields show up in prestigious prime areas like Masaki, Oyster Bay, and Msasani in Dar es Salaam, where high property prices simply cannot be matched by proportionally high rents.
The main reason for this variation is that property prices in prime Tanzania neighborhoods reflect lifestyle appeal and status, not rental income potential, which compresses yields even when absolute rents are high.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Tanzania.
How much do yields vary by property type in Tanzania as of 2026?
As of early 2026, gross rental yields in Tanzania range from around 5% for large detached houses up to 11% or more for compact apartments and room rentals, making property type one of the biggest drivers of your investment returns.
The highest average gross yields in Tanzania currently come from studios, one-bedroom apartments, and well-managed room rentals, which benefit from the largest tenant pool and the best rent-to-price ratios.
The lowest yields in Tanzania belong to detached houses and villas aimed at the expat or elite market, where high purchase prices combine with longer vacancy periods and more expensive maintenance.
The key reason yields differ so much by property type is that rent does not scale proportionally with size or price, so a villa costing three times as much as an apartment rarely commands three times the rent.
By the way, you might want to read the following:
What's the typical vacancy rate in Tanzania as of 2026?
As of early 2026, the typical vacancy rate for correctly-priced residential rental properties in Tanzania's active city locations is estimated at around 6% to 8%, which translates to roughly 3 to 4 weeks empty per year.
Vacancy rates in Tanzania vary dramatically by neighborhood and price segment, ranging from near zero in high-demand mid-market areas to 10% to 20% in overpriced prime segments where the tenant pool is thin.
The main factor driving vacancy rates up or down in Tanzania is pricing discipline, because properties priced appropriately for their location and condition fill quickly, while overpriced units sit empty for months.
Compared to regional averages, Tanzania's vacancy rates are fairly typical for East Africa, though the spread between prime and non-prime segments is notably wider than in some neighboring markets.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Tanzania.
What's the rent-to-price ratio in Tanzania as of 2026?
As of early 2026, the average rent-to-price ratio in Tanzania is approximately 0.67% monthly, which annualizes to around 8% and essentially equals the gross rental yield.
For buy-to-let investors in Tanzania, a monthly rent-to-price ratio above 0.75% (or 9% annually) is generally considered favorable, as this provides enough gross income to cover costs and still deliver solid net returns.
Tanzania's rent-to-price ratio compares favorably to more developed African markets like South Africa or Kenya's prime areas, where ratios tend to be lower due to higher property prices relative to achievable rents.
We have made this infographic to give you a quick and clear snapshot of the property market in Tanzania. 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 Tanzania give the best yields as of 2026?
Where are the highest-yield areas in Tanzania as of 2026?
As of early 2026, the highest-yield neighborhoods in Tanzania include Sinza, Ubungo, and Tegeta in Dar es Salaam, along with Kisasa in Dodoma and Paje on Zanzibar's east coast.
In these top-performing Tanzania neighborhoods, gross rental yields typically range from 9% to 11%, with net yields often reaching 6% to 8% for well-managed properties.
What these high-yield areas share is strong local renter demand driven by jobs, transport access, and services, combined with property prices that have not yet been inflated by prestige or speculation.
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 Tanzania.
Where are the lowest-yield areas in Tanzania as of 2026?
As of early 2026, the lowest-yield neighborhoods in Tanzania are the prestigious areas of Masaki, Oyster Bay, and Msasani in Dar es Salaam, along with select ultra-prime beachfront locations in Zanzibar.
In these low-yield Tanzania neighborhoods, gross rental yields typically fall between 4% and 6%, with net yields often struggling to reach 4% after all costs.
The main reason yields are compressed in these areas is that purchase prices reflect lifestyle appeal, status, and land scarcity rather than income potential, so rents simply cannot keep pace with capital values.
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 Tanzania.
Which areas have the lowest vacancy in Tanzania as of 2026?
As of early 2026, the neighborhoods with the lowest residential vacancy rates in Tanzania include Ubungo, Sinza, and Mikocheni (non-prime pockets) in Dar es Salaam, as well as Sakina in Arusha.
In these low-vacancy Tanzania neighborhoods, vacancy rates typically stay between 0% and 5%, meaning properties rarely sit empty for more than a few weeks between tenants.
The main demand driver keeping vacancy low in these areas is their proximity to jobs, public transport, and essential services, which creates a deep and consistent pool of working renters.
The trade-off investors face when targeting these low-vacancy areas is that purchase prices have risen as the market has recognized their appeal, which can compress yields even as occupancy stays high.
Which areas have the most renter demand in Tanzania right now?
The neighborhoods currently experiencing the strongest renter demand in Tanzania are Ubungo and Sinza in Dar es Salaam, the expanding corridors around BRT stations, and tourist hotspots like Nungwi and Paje in Zanzibar.
The renter profile driving most demand in these areas consists of young working professionals, couples without children, and in Zanzibar's case, tourism industry workers and short-stay visitors.
In these high-demand Tanzania neighborhoods, well-priced rental listings typically get filled within one to two weeks, compared to several months in overpriced prime areas.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Tanzania.
Which upcoming projects could boost rents and rental yields in Tanzania as of 2026?
As of early 2026, the top three infrastructure projects expected to boost rents in Tanzania are the BRT Lines 4 and 5 expansion in Dar es Salaam, the World Bank-funded Dar es Salaam Metropolitan Development Project Phase 2, and continued tourism infrastructure growth in Zanzibar.
The neighborhoods most likely to benefit from these projects include areas along new BRT corridors like Ubungo and connected suburbs, plus flood-prone zones receiving upgraded drainage, and Zanzibar's east coast around Paje and Jambiani.
Once these projects are completed, investors in affected Tanzania neighborhoods might realistically expect rent increases of 5% to 15% over two to three years, though the exact impact depends on how directly a property connects to the new infrastructure.
You'll find our latest property market analysis about Tanzania here.
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What property type should I buy for renting in Tanzania as of 2026?
Between studios and larger units in Tanzania, which performs best in 2026?
As of early 2026, studios and one-bedroom apartments outperform larger units in Tanzania in terms of both rental yield and occupancy, making them the stronger choice for most income-focused investors.
Studios in Tanzania typically deliver gross yields of 9% to 11% (around TZS 180,000 to TZS 300,000 monthly rent, or USD 70 to USD 115, or EUR 65 to EUR 105), while larger three-bedroom units often yield only 6% to 8%.
The main reason studios outperform in Tanzania is that they hit the largest tenant pool, consisting of young professionals, singles, and mobile workers who prioritize affordability and location over space.
However, larger units can be the better choice in family-oriented neighborhoods of Tanzania where stable long-term tenants with children prefer space and are willing to sign longer leases.
What property types are in most demand in Tanzania as of 2026?
As of early 2026, the most in-demand property type in Tanzania is the affordable one-to-two-bedroom apartment in a renter-heavy urban neighborhood with good transport links.
The top three property types ranked by current tenant demand in Tanzania are compact apartments (one to two bedrooms), room rentals in shared compounds, and simple family units (two to three bedrooms) near employment centers.
The primary trend driving this demand pattern is urbanization and a growing young workforce that needs affordable, well-located housing close to jobs in Dar es Salaam, Arusha, and Dodoma.
The property type currently underperforming in demand in Tanzania is the large detached villa aimed at expats, which suffers from a thin buyer pool, high vacancy risk, and maintenance costs that erode returns.
What unit size has the best yield per m² in Tanzania as of 2026?
As of early 2026, the unit sizes delivering the best gross rental yield per square meter in Tanzania are well-finished studios and compact one-to-two-bedroom apartments in the 25 to 60 square meter range.
For these optimal-sized units in Tanzania, the typical gross rental yield per square meter works out to around TZS 6,000 to TZS 10,000 monthly (approximately USD 2.30 to USD 3.85, or EUR 2.10 to EUR 3.50), compared to TZS 3,000 to TZS 5,000 for larger units.
The main reason smaller or larger units have lower yield per square meter in Tanzania is that rent does not scale linearly with size, so you pay more per square meter for larger properties but cannot charge proportionally more rent.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Tanzania.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Tanzania versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What costs cut my net yield in Tanzania as of 2026?
What are typical property taxes and recurring local fees in Tanzania as of 2026?
As of early 2026, the annual property rate for a typical rental apartment in Tanzania ranges from TZS 18,000 to TZS 90,000 (approximately USD 7 to USD 35, or EUR 6 to EUR 32), depending on the building category and location.
Beyond property rates, Tanzania landlords must also budget for the 10% withholding tax on rent, which is deducted by corporate tenants or collected by the tax authority, and this represents the largest recurring tax burden.
Combined, property taxes and the rent withholding typically represent around 10% to 12% of gross rental income in Tanzania, which is a significant chunk that you need to account for when calculating net yields.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Tanzania.
What insurance, maintenance, and annual repair costs should landlords budget in Tanzania right now?
The estimated annual landlord insurance cost for a typical rental property in Tanzania ranges from 0.2% to 0.6% of property value, which works out to roughly TZS 400,000 to TZS 1,200,000 (USD 155 to USD 460, or EUR 140 to EUR 420) for a mid-range apartment.
For maintenance and repairs, Tanzania landlords should budget around 1% to 2% of property value annually for apartments and townhouses, or 2% to 3% for standalone houses with more exterior upkeep needs.
The repair expense that most commonly catches Tanzania landlords off guard is water system maintenance, including pumps, tanks, and plumbing, which can fail unexpectedly and require immediate costly repairs.
In total, landlords in Tanzania should realistically budget TZS 3,000,000 to TZS 8,000,000 annually (approximately USD 1,150 to USD 3,100, or EUR 1,050 to EUR 2,800) for insurance, maintenance, and repairs combined on a typical rental property.
Which utilities do landlords typically pay, and what do they cost in Tanzania right now?
In Tanzania, most long-let leases have tenants paying for electricity and water directly, while landlords typically cover service charges in managed compounds, including security, gardening, and common area maintenance.
For landlord-paid utilities and service charges in a typical Tanzania rental compound, monthly costs usually run between TZS 50,000 and TZS 150,000 (approximately USD 20 to USD 60, or EUR 18 to EUR 55), representing roughly 5% to 15% of the monthly rent collected.
What does full-service property management cost, including leasing, in Tanzania as of 2026?
As of early 2026, full-service property management in Tanzania typically costs between 3% and 5% of monthly rent, which for a TZS 500,000 monthly rent would mean TZS 15,000 to TZS 25,000 (approximately USD 6 to USD 10, or EUR 5 to EUR 9) per month.
On top of ongoing management, Tanzania property managers typically charge a leasing or tenant-placement fee equivalent to about one month's rent, which covers marketing, showings, and tenant screening.
What's a realistic vacancy buffer in Tanzania as of 2026?
As of early 2026, landlords in Tanzania should set aside around 8% to 10% of annual rental income as a vacancy buffer for mass-market properties, rising to 15% to 25% for prime or upper-market units with thinner tenant pools.
In practice, this translates to about 4 to 5 weeks of vacancy per year for well-priced mid-market Tanzania rentals, but potentially 8 to 12 weeks for premium properties or those in oversupplied segments.
Buying real estate in Tanzania 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 Tanzania, 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 |
|---|---|---|
| Centre for Affordable Housing Finance in Africa (CAHF) | CAHF is a widely cited Africa-focused housing research institution with transparent, data-led reports on rental markets. | We used their rent, price, outgoings, yield, and vacancy tables as our base dataset. We then adjusted estimates to early 2026 using other macro signals. |
| National Bureau of Statistics Tanzania (NBS) | NBS is Tanzania's official statistics agency, publishing CPI, national accounts, and demographic data. | We used NBS for inflation context that affects rent growth and cost drift. We also sanity-checked that our 2026 assumptions fit the recent macro backdrop. |
| Office of the Chief Government Statistician Zanzibar (OCGS) | OCGS is the official statistics office for Zanzibar, publishing regular tourism and economic releases. | We used visitor count trends to explain why short-let demand can be structurally stronger in Zanzibar. We translated that into yield and vacancy nuance for tourist areas. |
| World Bank DMDP Phase 2 | The World Bank is an international organization with rigorous, publicly available project documentation. | We used this to support claims about infrastructure catalysts that can lift rents in specific corridors. We identified upcoming growth pockets in Dar es Salaam. |
| European Investment Bank (EIB) | EIB is a major public development finance institution with formal project pipeline listings. | We used it to confirm that BRT Lines 4 and 5 investments are real and corridor-specific. We mapped this to neighborhoods where accessibility improvements can support rent growth. |
| Local Government Authorities (Rating) Act | This is the official consolidated legislation for property rating in Tanzania from the Attorney General's Office. | We used it to describe what the property rate is legally, who collects it, and enforcement mechanics. We kept it practical for landlord budgeting. |
| The Citizen | The Citizen is a major Tanzanian newspaper that reports official policy changes with underlying legal citations. | We used the specific shilling amounts and collection mechanism details. We treated it as a practical bridge explaining how the law shows up in landlord costs. |
| Ministry of Finance Tanzania Income Tax Act | This is the official consolidated income tax law text from the Ministry of Finance. | We used it to ground the 10% withholding tax on rent and explain when it affects landlord cashflows. We translated it into a simple net yield haircut rule. |
| Tanzania Revenue Authority (TRA) | TRA is Tanzania's official tax authority and publishes taxpayer guidance on all tax matters. | We used it as an official cross-check that rent sits inside Tanzania's withholding tax system. We referenced it to keep readers anchored to the official administrator. |
| Tanzania Insurance Regulatory Authority (TIRA) | TIRA is the national insurance regulator and publishes comprehensive market-wide performance reports. | We used it to confirm that insurance is a mature enough market to price landlord policies. We then provided a landlord budgeting range based on market conditions. |
| ICEA LION Tanzania | ICEA LION is a large, established insurer in East Africa with standard product lines available locally. | We used it to reality-check that home and landlord-type cover exists and is purchasable in Tanzania. We did not use it to claim universal premium rates. |
| Our proprietary research and analysis | We conduct ongoing market monitoring, collect listing data, and speak with local agents and investors. | We used our own data to fill gaps where official sources are limited or outdated. We also validated public data against what we observe on the ground. |
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