Rental yield in Kenya: how to calculate gross and net yield

Before you buy, build or price a rental unit, you need one number: the rental yield. Rental yield in Kenya tells you how much your property earns each year compared with what it cost you. This guide shows you how to work out both gross and net yield, with simple worked examples you can copy for your own units.

What is rental yield?

Rental yield is the yearly rent from a property shown as a percentage of the property's cost.

There are two kinds:

• Gross yield - rent before any costs. Quick, but it flatters the property.
• Net yield - rent after costs like repairs, management, empty months and tax. Slower to work out, but closer to the money you actually keep.

Always look at both. A unit can have a strong gross yield and a weak net yield.

How to calculate gross rental yield in Kenya

The formula:

Gross yield = (monthly rent x 12) / property cost x 100

"Property cost" is what you paid to buy or build. For a truer picture, add buying costs such as legal fees and stamp duty (a tax paid when land or property changes hands).

Worked example: a 2 bedroom apartment

As of 25 Oct 2026, the median rent for a 2 bedroom apartment across ISHI Homes listings is KES 28,000 a month. Say you bought one for KES 6,000,000 (an example price, not a market figure).

• Yearly rent: KES 28,000 x 12 = KES 336,000
• Gross yield: 336,000 / 6,000,000 x 100 = 5.6%

Note: the deposit your tenant pays is not income. You hold it and return it when they leave, less any agreed deductions.

How to calculate net rental yield

The formula:

Net yield = (rent actually collected - yearly costs) / property cost x 100

Common yearly costs for Kenyan landlords:

• Vacancy - months the unit sits empty between tenants
• Management fees - if an agent or company manages the unit, often a percentage of rent collected
• Repairs and maintenance - painting, plumbing, fixing doors
• Service charge - shared costs in an apartment block, such as security, cleaning and lifts
• Caretaker, water and garbage - if you pay these and do not pass them on
• Insurance - cover for the building
• Land rates or ground rent - yearly charges by the county or land owner
• Rental income tax - paid to KRA on rent

Worked example 1: the same 2 bedroom apartment

We will use example figures. Replace them with your own.

Item	Amount per year
Full year's rent	KES 336,000
Less 1 month empty	- KES 28,000
Rent collected	KES 308,000
Management (10% of collected)	KES 30,800
Repairs and maintenance	KES 20,000
Service charge (KES 3,000 a month)	KES 36,000
Insurance	KES 10,000
Land rates	KES 5,000
Rental income tax (7.5% of collected)	KES 23,100
Total costs	KES 124,900
Net income	KES 183,100

• Net yield: 183,100 / 6,000,000 x 100 = about 3.1%

The gross yield was 5.6%. After costs, it is nearly halved.

Worked example 2: a block of 10 bedsitters

As of 25 Oct 2026, the median bedsitter rent in Kahawa Wendani on ISHI Homes is KES 8,500 a month (based on 3 listings). Say you built 10 bedsitters there for KES 9,000,000 in total (an example cost).

Gross yield:

• Yearly rent: 10 x 8,500 x 12 = KES 1,020,000
• Gross yield: 1,020,000 / 9,000,000 x 100 = about 11.3%

Net yield:

Item	Amount per year
Full year's rent	KES 1,020,000
Less 5% vacancy	- KES 51,000
Rent collected	KES 969,000
Management (10% of collected)	KES 96,900
Repairs and maintenance	KES 60,000
Caretaker (KES 10,000 a month)	KES 120,000
Insurance	KES 20,000
Land rates	KES 10,000
Rental income tax (7.5% of collected)	KES 72,675
Total costs	KES 379,575
Net income	KES 589,425

• Net yield: 589,425 / 9,000,000 x 100 = about 6.5%

Gross vs net yield side by side

	2 bedroom apartment	10 bedsitters
Cost (example)	KES 6,000,000	KES 9,000,000
Gross yield	5.6%	11.3%
Net yield	3.1%	6.5%

The lesson: smaller units often show higher yields, but they also bring more tenants, more turnover and more management work. Your costs list must reflect that.

Where to get realistic rent figures

Your yield is only as good as your rent estimate. Do not guess high.

• Check current listings for the same unit type in the same area. ISHI Homes shows real asking rents across Nairobi and its commuter towns.
• As of 25 Oct 2026, ISHI Homes medians include: 1 bedroom in Kahawa Sukari KES 15,750, 1 bedroom in Roysambu KES 18,250, 2 bedroom in Toll (Ruiru) KES 21,250, and 2 bedroom in Kilimani KES 71,500.
• Treat medians from only one or two listings as a rough guide, not a rule.
• Ask local caretakers and agents how long units stay empty.

Common mistakes to avoid

• Counting the deposit as income. It belongs to the tenant.
• Assuming 12 full months of rent. Allow for empty months and late payers.
• Forgetting tax. Rental income tax is charged on rent, so budget for it every month.
• Using today's price for an old property. For a property you already own, you can use its current market value to compare it with other investments.
• Ignoring big future repairs. Roofs, tanks and pumps wear out. Set money aside.

What is a good rental yield?

There is no single right number. Compare your net yield with what your money could earn elsewhere with less effort, such as a fixed deposit or government securities. Check current rates before you decide. If your net yield is not clearly higher, ask whether the extra work and risk are worth it. Also remember that property value may rise over time, which yield alone does not show.

Track your real yield with ISHI

Working out yield once is easy. Keeping it accurate month after month is harder, because rent payments, arrears, repairs and empty units keep changing. ISHI property management software keeps rent collection, expenses and tenant records in one place, so you can see what each unit really earns.

See ISHI in action:

• Book a free demo at www.ishi.digital/contact
• Call 0116888777
• Email hello@ishi.digital