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As of September 2025, average rental prices in Iran show significant variation across major cities, with Tehran commanding the highest rents and regional centers like Mashhad and Isfahan offering more affordable options.
Monthly rents in Tehran range from $400 to $1,800 depending on district and property type, while Mashhad offers basement apartments from $90 per month and Isfahan provides central properties between $600-$1,500 per square meter for purchase. Rental yields nationwide average 4.3-7% with commercial properties typically outperforming residential units.
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Tehran leads Iran's rental market with monthly apartment rents ranging $400-$1,800, while Mashhad offers more affordable options starting at $90 for basement units.
Rental yields across Iran average 4.3-7% for residential properties, with commercial and student housing delivering higher returns between 8-12%.
| City | Average Monthly Rent | Rental Yield Range | Occupancy Rate |
|---|---|---|---|
| Tehran | $400 - $1,800 | 4.3% - 7% | 68% |
| Mashhad | $90 - $600 | 7% - 9% | 82% |
| Isfahan | $300 - $900 | 6% - 8% | 75% |
| National Average | $250 - $1,200 | 4.3% - 7% | 75% |
What's the current average rent across major cities in Iran?
Tehran dominates Iran's rental market with the highest average rents ranging from $400 to $1,800 per month for apartments.
In Tehran's upscale northern districts like Region 1, average monthly rents reach 75 million tomans (approximately $1,250), while more affordable central and southern areas like District 3 average around 50 million tomans (approximately $835) per month. The capital's rental market reflects the concentration of economic activity and higher living standards.
Mashhad offers significantly more affordable rental options, with basement apartments starting around $90 per month for 50-square-meter units. Standard apartments near religious sites command higher rents due to strong demand from pilgrims and religious tourists visiting the holy shrines.
Isfahan falls between Tehran and Mashhad in terms of rental costs, with central and historic areas commanding premium prices but generally remaining more affordable than Tehran. Monthly rents typically range between $300-$900 depending on location and property specifications.
The national average for residential rental yields sits between 4.3-7%, providing a benchmark for comparing different cities and investment opportunities across Iran.
How do rents vary by property type in Iran?
Property type significantly influences rental rates and yields across Iranian cities, with commercial properties generally outperforming residential units.
| Property Type | Tehran Yield | Mashhad Yield | Isfahan Yield |
|---|---|---|---|
| Residential Apartments | 4.3% - 7% | 7% - 9% | 6% - 8% |
| Luxury Villas | 3.5% - 5% | 5% - 7% | 4.5% - 6.5% |
| Commercial Retail | 8% - 10% | 7.5% - 9.5% | 7% - 9% |
| Office Buildings | 6% - 8% | 6.5% - 8.5% | 6% - 8% |
| Student Housing | 8% - 12% | 9% - 13% | 8.5% - 12.5% |
Luxury villas and high-end homes command the highest monthly rents but offer lower yields compared to apartments due to their substantial purchase prices and limited tenant pool.
Student housing and commercial retail properties deliver the strongest rental yields, with student accommodation particularly profitable in university cities where demand consistently exceeds supply.
What's the breakdown of rents by neighborhood within major cities?
Tehran's rental market shows dramatic variation between districts, with northern areas commanding premium rates.
Region 1 represents Tehran's most expensive rental district, with monthly rents averaging 75 million tomans ($1,250) and advance payments reaching 1.115 billion tomans ($18,600). This northern district attracts affluent tenants seeking luxury amenities and proximity to business centers.
District 3 offers more moderate rental rates at approximately 50 million tomans ($835) per month with similar advance payment requirements. This central location provides good access to transportation and commercial areas while maintaining reasonable costs.
Poorer neighborhoods such as Azari and Kahrizak feature small apartments available for purchase at 2-3 billion tomans, with correspondingly lower monthly rental rates that make them accessible to working-class families and students.
In Mashhad, proximity to religious sites significantly influences rental rates, with properties near holy shrines commanding premium rates from pilgrim accommodation demand throughout the year.
How does rental price change depending on property surface area?
Larger properties generally command higher total rents but offer better value per square meter in Iran's rental market.
In upscale Tehran districts, spacious 180-square-meter properties can achieve monthly rents around $542 for ground-floor or basement units, demonstrating the premium placed on space in desirable locations. These larger units typically attract families and professionals willing to pay for additional living space.
Smaller units in less central areas offer more affordable entry points, such as 50-square-meter basement apartments in Mashhad renting for approximately $90 per month. These compact properties serve students, young professionals, and budget-conscious tenants.
Rent per square meter typically increases for centrally-located properties and newly renovated units, with premium neighborhoods commanding significantly higher rates regardless of total property size.
The relationship between size and rent varies by city, with Tehran showing the strongest correlation between larger surface areas and premium pricing due to space scarcity in desirable neighborhoods.
What's the total cost of renting including all fees and charges?
Renting in Iran involves several cost components beyond the monthly rent that significantly impact total expenses.
Tenants must pay substantial upfront deposits equivalent to 6-18 months of rent, representing a major financial commitment that often exceeds the annual rental cost. These advance payments serve as security deposits and partial rent prepayment in Iran's rental system.
Monthly maintenance charges and utilities typically add $30-$60 per month for 80-100 square meter apartments, covering building maintenance, water, electricity, and gas services. These costs vary based on property age, amenities, and seasonal heating requirements.
Government taxes and fees add 4-7% to property transactions when transferring leases or establishing new rental agreements, creating additional costs for both landlords and tenants in formal rental arrangements.
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How does renting compare to mortgage financing for the same property type?
Mortgage financing in Iran carries interest rates well above inflation levels and often exceeds average income capacity.
Mortgage payments frequently surpass rental costs for equivalent properties unless buyers have very high incomes, making renting the more affordable option for most Iranians. The combination of high interest rates and substantial down payment requirements limits mortgage accessibility.
Property purchase transactions incur taxes and fees adding 4-7% to the total purchase price, representing significant upfront costs beyond the property value itself. These transaction costs often exceed annual rental payments for comparable properties.
Given rapid housing price appreciation in recent years, mortgage payments may substantially exceed rental costs while offering uncertain financial benefits due to economic volatility and currency fluctuations affecting property values.
Renting provides flexibility and lower financial commitment in Iran's uncertain economic environment, while mortgage financing requires substantial financial resources and long-term commitment despite questionable investment returns.
What are the best options for short-term versus long-term rentals?
Long-term rentals dominate Iran's rental market and offer more stability for both landlords and tenants.
Long-term rental arrangements provide stable income streams for property owners and better advance payment terms, with most leases extending 12 months or longer. These arrangements suit the majority of Iranian tenants seeking residential stability and predictable housing costs.
Short-term rentals remain limited but show growth potential, particularly serving expatriates, tourists, and religious pilgrims in cities like Mashhad and Isfahan. The short-term market benefits from tourism and business travel demand.
In tourism-focused cities, short-term apartment rentals deliver higher per-night returns compared to monthly rates, making them attractive for property owners in strategic locations near religious sites or business districts.
Mashhad and Isfahan experience strong short-term rental demand due to religious tourism and cultural attractions, providing opportunities for property owners to capitalize on seasonal visitor influx throughout the year.
Can you provide examples of typical rental prices for different property categories?
Rental prices in Iran vary dramatically based on property type, location, and target tenant market.
1. **Standard residential apartments**: 85-square-meter furnished apartment in Tehran averages 211 million rials (approximately $350-400) per month in middle-income neighborhoods2. **Budget accommodation**: 50-square-meter basement unit in Mashhad rents for approximately $90 per month, serving students and budget-conscious tenants3. **Luxury residential**: High-end villas in Tehran command $2,500-$3,000+ monthly rents but offer lower yields per square meter than apartments4. **Commercial retail**: Tehran retail units require $2,500-$23,500 per square meter for purchase, delivering 8-10% annual yields5. **Student housing**: Purpose-built student accommodation generates 8-12% yields due to consistent demand and higher turnover ratesThese examples demonstrate the wide range of rental opportunities available across Iran's property market, from affordable basement units to luxury residential and commercial properties.
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We did some research and made this infographic to help you quickly compare rental yields of the major cities in Iran versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are the common renter profiles and how do they affect demand?
Iran's rental market serves diverse tenant segments that create distinct demand patterns across different property types and locations.
Young professionals and students constitute a major tenant segment seeking affordable small apartments near transportation networks and universities. This demographic drives demand for compact, budget-friendly units in accessible locations with good connectivity to business and educational centers.
Wealthy Iranians and expatriates prefer luxury villas and high-end apartments in northern Tehran, creating strong demand for premium properties with modern amenities and prestigious addresses. This segment sustains the high-end rental market despite economic challenges.
Religious pilgrims visiting Mashhad generate substantial demand for short-term rentals near holy sites throughout the year. This consistent flow of religious tourists supports a specialized accommodation market with seasonal price variations.
Commercial tenants including small and medium enterprises and traders seek office and retail spaces in major markets and business districts, creating demand for commercial properties with good location and infrastructure access.
What are the current vacancy rates across different property types and regions?
Vacancy rates in Iran show significant variation between cities, reflecting different economic conditions and demand patterns.
| City | Occupancy Rate | Vacancy Rate | Market Condition |
|---|---|---|---|
| Tehran | 68% | 32% | Oversupply |
| Mashhad | 82% | 18% | Strong Demand |
| Isfahan | 75% | 25% | Balanced |
| National Average | 75% | 25% | Stable |
Tehran experiences the highest vacancy rates at 32% due to oversupply and economic strain affecting tenant demand. The capital's rental market faces challenges from economic uncertainty and population movement to more affordable cities.
Mashhad maintains the lowest vacancy rate at 18%, driven by strong pilgrimage-related demand that provides consistent tenant flow throughout the year. Religious tourism creates stable rental demand regardless of broader economic conditions.
Isfahan falls between Tehran and Mashhad with a 25% vacancy rate, representing a more balanced market with moderate supply and demand dynamics typical of secondary Iranian cities.
What are the rental yields today compared to historical trends and future forecasts?
As of September 2025, rental yields in Iran reflect recent market adjustments and economic pressures affecting property investments.
Current yields average 4.3-5.1% in Tehran, 6.8-7.9% in Mashhad, and 5.5-6.7% in Isfahan, representing the market's response to inflation and currency fluctuations. These yields reflect the balance between rental income potential and property acquisition costs.
One year ago in 2024, yields were slightly higher as rental prices have not kept pace with rapid property price appreciation driven by inflation and currency devaluation. The gap between rent growth and price growth has compressed yields across most Iranian cities.
Five years ago, yields were generally lower before significant inflation and currency volatility created the current market dynamics. The intervening period saw rental prices surge due to economic pressures and reduced purchasing power among potential buyers.
Future forecasts suggest yields will likely remain stable but may trend downward in Tehran due to continued price appreciation, while other cities may see stable or slightly improving yields based on population growth and urbanization trends.
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How do Iranian rental prices and yields compare with similar international cities?
Iran's rental market offers competitive yields compared to regional peers but significantly lower absolute rental prices than international standards.
Tehran's rental yields of 4-7% fall below Dubai's 6-8% and Istanbul's 6-7%, but remain comparable to Athens and Cairo markets. The capital's yields reflect mature market conditions with established rental demand but face pressure from economic uncertainty.
Mashhad's rental yields of 7-9% are regionally competitive and particularly strong for short-term holiday rentals serving religious tourism. The city's specialized market creates unique yield opportunities not found in typical metropolitan areas.
Overall Iranian rental prices remain dramatically lower than European or North American cities due to currency valuation and local economic conditions. However, home price-to-income ratios are high due to inflation and currency volatility affecting affordability.
The Iranian market offers potentially attractive yields for international investors willing to navigate currency risk and regulatory complexity, but requires careful consideration of economic and political factors affecting long-term returns.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Iran's rental market presents diverse opportunities across different cities and property types, with Tehran commanding premium rates while regional centers offer more affordable options.
Understanding local market dynamics, tenant profiles, and yield expectations is essential for making informed rental investment decisions in Iran's evolving property market.
Sources
- Iran News Update - Housing Crisis Report
- Sands of Wealth - Iran Real Estate Market Trends
- Iran Focus - Basement Living Report
- Sands of Wealth - Iran House Prices
- Sands of Wealth - Iran Housing Forecast
- Expatistan - Tehran Cost of Living
- Numbeo - Iran Cost of Living
- Iran Focus - Housing Inflation Report