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Top 5 Most Profitable Cities in Africa to Become a Landlord in Mid-2024


Top 5 Most Profitable Cities in Africa to Become a Landlord in Mid-2024

The fundamental incentive behind any investment is its profit potential, and the real estate industry in African cities is no exception. The main motivation of any landlord is the amount of rent that their property(s) will bring in on a regular basis. This revenue is based on the gross rental income of the property.

Gross rental income is an important metric for real estate investors as it measures the profitability of rental properties. In Africa, where the real estate market is diverse and dynamic, gross rental income is becoming increasingly important as investors try to navigate the continent’s diverse economic climates.

The gross rental yield is calculated by dividing the annual rental income of a property by the purchase price and multiplying the result by 100 to obtain the percentage.

This metric represents the potential return on investment (ROI) from rental income, minus expenses such as maintenance, taxes and management fees.

It goes without saying that a higher gross rental yield is desirable. A higher yield means a higher ROI for the landlord. With that in mind, here are the top 5 African major cities to become a landlord, according to Numbeo’s updated half-year gross rental yield index.

It is also important to note that for this list, Numbeo ranks major cities, particularly economic hubs across Africa, rather than the entire continent.

Rank City country Gross rental yield city centre Gross rental yield outside the center Price-earnings ratio

1.

Port Elizabeth

South Africa

15.9

14.0

3.2

2.

Douala

Cameroon

10.3

13.1

48.3

3.

Durban

South Africa

4.7

9.4

5.6

4.

Johannesburg,

Johannesburg, South Africa

2.6

9.2

10.5

5.

Nairobi

Kenya

14.3

8.7

4.4

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