How Rental Yield is Calculated on Nigerian Property

Rental yield is the single most important number for property investors. Here is how to calculate it properly.

The Basic Formula

Gross Rental Yield = (Annual Rental Income divided by Property Purchase Price) x 100

Worked Example

You buy a 2-bedroom flat in Surulere Lagos for 18,000,000 Naira.

You rent it out for 1,500,000 Naira per year.

Gross yield = (1,500,000 / 18,000,000) x 100 = 8.3%

Gross vs Net Yield

Net yield is what actually matters after costs:

• Property management agent: 10% of annual rent
• Maintenance and repairs: 2–5% of property value per year
• Service charge: ₦50,000 – ₦300,000 per year
• Insurance: ₦30,000 – ₦100,000 per year
• Void periods: assume 1–2 months per year

Net Yield Example

Same 18M flat: Gross rent 1,500,000 minus all costs = Net income 565,000

Net yield = 3.1% (vs 8.3% gross)

Average Rental Yields by Nigerian City 2026

Illustrative ranges (Realvista estimates)

• Lagos Mainland: 7–9% gross / 3–5% net
• Lekki/VI Lagos: 5–8% gross / 2–4% net
• Gwarinpa Abuja: 6–8% gross / 3–4% net
• Wuse 2 Abuja: 4–6% gross / 2–3% net
• GRA Port Harcourt: 6–8% gross / 3–5% net

What is a Good Rental Yield in Nigeria?

• Below 4% gross: Poor
• 4–6% gross: Average
• 6–9% gross: Good — typical Lagos/PH mainland range
• Above 9% gross: Excellent but check the risk

Track your rental yield using Realvista portfolio tracker.

These are Realvista estimates based on general market observation, not a calculation from listings on this platform. Actual yields vary by property condition, tenant type and location. This is not financial advice.