Investment in real estate is primarily driven by the prospect of profitable returns, and this holds true across African countries. Every property owner aims to maximize the income generated from their real estate properties.
A key indicator of a profitable real estate venture is its Gross Rental Yield, which is the profitability of rental properties.
Gross rental yield is an essential metric for investors, as it assesses the earnings potential of rental real estate.
In Africa, where the real estate markets vary significantly, gross rental yield is especially valuable as investors navigate each country's unique economic conditions.
The calculation of gross rental yield involves dividing a property's annual rental income by its purchase price and multiplying the result by 100, resulting in a percentage figure.
This percentage reflects the potential return on investment (ROI) from rental income, excluding costs such as maintenance, taxes, and property management fees.
A higher gross rental yield is always preferable, as it implies a better ROI for property owners.
Given this, certain African countries stand out as attractive destinations for rental property investments.
This is highlighted in Numbeo's latest gross rental yield index for the second half of 2024.
It's worth noting that Numbeo's index focuses on major economic hubs across the continent rather than on the entire region.
Top 5 most profitable African countries to become a landlord mid-2024
| 1. | South Africa | 10.3 | 10.2 | 4th |
| 2. | Cameroon | 8.7 | 10.5 | 6th |
| 3. | Kenya | 7.3 | 4.8 | 18th |
| 4. | Egypt | 6.3 | 7.0 | 27th |
| 5. | Ethiopia | 6.0 | 4.4 | 32nd |
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