Quick answer
Well-bought Nairobi apartments typically show gross rental yields around 5–8%, with net yields landing 1.5–2.5 percentage points lower after service charge, vacancy, management, repairs and taxes. Studios and one-beds near employment nodes tend to outperform large villas.
Calculate yield properly
Gross yield is annual rent divided by purchase price. Net yield subtracts service charge, management fees, insurance, repairs, an honest vacancy allowance and rental income tax before dividing. The two numbers can differ by a third.
Kenya's residential rental income tax regime applies a flat rate on gross rent for landlords within the qualifying band, so model it in from day one rather than treating it as an afterthought.
- Assume 8–10% vacancy unless you have a signed multi-year tenant.
- Budget 1% of value per year for maintenance on older stock.
- Service charge on serviced apartments can consume a quarter of gross rent.
Where the numbers work
Compact units close to employment nodes rent fastest: one and two-bedroom apartments around Westlands, Kilimani, Ridgeway, Garden Estate and the Thika Road corridor. In Kiambu, Ruiru and Mugutha do well with young families priced out of the city.
Large villas in Karen, Muthaiga and Runda are capital-growth and lifestyle assets more than income assets. Their yields are usually the lowest on the board, and void periods are longer when the expatriate market softens.
Reduce risk before you buy
Check who manages the scheme, how much is in the sinking fund and whether service charge collection is healthy. A well-run estate with a functioning borehole, solar water heating and reliable backup power lets you charge a premium and keeps tenants for longer.
Ask for the last twelve months of actual rent receipts on any unit sold as tenanted — advertised rents and collected rents are not the same number.
Frequently asked questions
- What is a good rental yield in Nairobi?
- A gross rental yield of 6–8% is considered strong in Nairobi in 2026. Anything below 5% gross usually means you are buying for capital growth rather than income.
- Do landlords pay tax on rental income in Kenya?
- Yes. Resident landlords within the qualifying annual rent band pay monthly residential rental income tax on gross rent, filed with the Kenya Revenue Authority. Higher earners are taxed under the standard income tax rules.
- Are apartments or houses better for rental income?
- Apartments generally produce higher yields because they cost less per unit and rent faster; standalone houses deliver stronger capital appreciation but longer void periods.