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Alexandria offers rental yields between 4% and 8% depending on property type and location. Apartments consistently deliver the highest returns while coastal properties can exceed 10% with short-term rental strategies.
The Alexandria rental market shows strong fundamentals with apartments in popular neighborhoods like El Sheikh Zayed and Smouha achieving yields of 6-7%. Property size significantly impacts returns, with smaller 1-2 bedroom units outperforming larger properties due to higher demand and lower entry costs.
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Alexandria rental yields range from 4% to 8% for apartments, with smaller units in central locations delivering the highest returns.
Coastal properties can achieve up to 10% yields through short-term rental strategies, while villas typically yield 4-6.5% due to higher purchase prices.
| Property Type | Rental Yield Range | Best Locations |
|---|---|---|
| Apartments (1-2 bed) | 6-8% | El Sheikh Zayed, City Center |
| Apartments (3+ bed) | 4-6% | Smouha, El Maadi |
| Villas | 4-6.5% | North Coast, Premium areas |
| Coastal Properties | 4.5-10% | Tourist zones, Beach areas |
| Commercial Units | 7-9% | Business districts |
| Short-term Rentals | 8-10% | Tourist areas, Furnished units |
| Long-term Rentals | 5-7% | Residential neighborhoods |
What are the main property types available for rent in Alexandria and how do their yields differ?
Alexandria offers six primary property types for rental investment, each delivering distinct yield profiles based on market demand and entry costs.
Apartments represent the backbone of Alexandria's rental market, generating yields between 5.06% and 8%. These properties attract the highest demand from young professionals, expatriates, and students, creating consistent rental income. Furnished and serviced apartments command premium rents, particularly in business districts and near educational institutions.
Villas deliver more modest yields of 4% to 6.5% due to their higher purchase prices and specialized tenant base. While these properties attract long-term, high-income tenants who pay substantial monthly rents (EGP 30,000-75,000), the significant upfront investment reduces overall yield percentages. Villas work best for investors seeking stable, long-term tenancies rather than maximum returns.
Commercial units, including shops and offices, offer yields of 7% to 9% but require active management and deeper market knowledge. Coastal chalets present the most variable returns, ranging from 4.5% to 10%, with short-term rental strategies pushing yields to the upper end of this range during peak tourist seasons.
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Which neighborhoods or areas of Alexandria offer the highest and lowest rental yields?
| Neighborhood | Rental Yield | Property Focus |
|---|---|---|
| El Sheikh Zayed | 7.39% | 2-bedroom apartments, upscale area |
| City Center | 6.70% | Smaller units, business proximity |
| Smouha | Up to 6.95% | Professional housing, university area |
| Nasr City | 6.00% | Growing neighborhood, good infrastructure |
| El Maadi | 5.38% | Family-friendly, larger apartments |
| North Coast | 4.5% | Premium pricing, seasonal demand |
| San Stefano | 5-6% | Tourist area, furnished rentals |
El Sheikh Zayed delivers Alexandria's highest rental yields at 7.39%, particularly for 2-bedroom apartments that appeal to young professionals and small families.
The city center maintains strong yields of 6.70% due to proximity to business districts, transportation hubs, and commercial areas. Smaller units in this area consistently outperform larger properties because they match the budget constraints of the primary tenant demographic.
Smouha achieves yields up to 6.95% thanks to its popularity with university staff, students, and working professionals. The neighborhood's established infrastructure and educational institutions create steady rental demand throughout the year.
North Coast properties show the lowest yields at 4.5% due to premium pricing and seasonal rental patterns that limit year-round income potential.
How does the size or surface area of a property affect its rental yield in Alexandria?
Property size inversely correlates with rental yield in Alexandria, with smaller units consistently delivering superior returns compared to larger properties.
1-2 bedroom apartments ranging from 85-120 square meters achieve the highest yields, reaching 6.7% to 7.39% in prime locations. These units match the budget and space requirements of Alexandria's largest tenant groups: young professionals, expatriates, and small families. The lower purchase price per unit also reduces the denominator in yield calculations.
Medium-sized properties of 120-140 square meters typically yield 5.5% to 6.5%, representing a middle ground between affordability and space. These properties attract established professionals and families who can afford higher rents but remain price-sensitive.
Large properties exceeding 140 square meters, including 3+ bedroom apartments and villas, often yield just 3.8% to 5.5%. While these properties command substantial monthly rents (EGP 12,000-17,000 for apartments, EGP 30,000-75,000 for villas), their high purchase prices significantly reduce percentage returns. The limited pool of tenants who can afford such properties also extends vacancy periods.
This size-yield relationship reflects Alexandria's market fundamentals: abundant demand for affordable, well-located smaller units versus limited demand for premium large properties.
What is the typical total purchase price including fees for different property types?
Alexandria property purchases require budgeting for both base prices and substantial transaction fees that can add 5-8% to total costs.
Apartments average EGP 7,300 per square meter, making a typical 120-square-meter unit cost approximately EGP 876,000. Smaller 100-square-meter apartments range from EGP 730,000 to EGP 1,200,000 depending on location and condition. Premium areas and new developments command higher per-square-meter prices.
Villas cost significantly more at approximately EGP 13,850 per square meter, reflecting their premium positioning and larger land allocations. A modest villa can easily exceed EGP 2-3 million before fees.
Purchase fees include registration costs of 1-3% of the property price, real estate agent commissions of 1-2%, and stamp duty of 0.5%. Transfer taxes typically cost 2.5% but are usually paid by the seller. New properties from developers include 14% VAT that buyers must pay.
Additional costs include notary fees, legal expenses, and utility connection charges that vary by property and location. Investors should budget an extra EGP 50,000-100,000 for these miscellaneous expenses on typical apartment purchases.
What taxes and other ownership costs should I factor into the yield calculation?
Alexandria property owners face annual real estate taxes calculated at 10% of net rental value after a 30% expense deduction.
The government assesses rental value based on actual rents or estimated market rates, then applies a 30% deduction for maintenance and operating expenses. Property owners pay 10% tax on the remaining 70% of rental income. For a property generating EGP 60,000 annual rent, the tax would be EGP 4,200 (10% of EGP 42,000).
Municipal fees vary by neighborhood but typically range from EGP 500-2,000 annually for apartments. Maintenance costs depend on property age and amenities, averaging 2-4% of annual rental income for apartments and 3-6% for villas.
Utility costs for vacant periods, property insurance, and management fees (if using an agent) add another 1-3% of annual rental income. Compound properties may charge additional service fees for security, landscaping, and common area maintenance.
Importantly, Egypt does not impose capital gains tax on individuals, making property appreciation tax-free when you sell. This advantage partially offsets the annual ownership costs and enhances long-term investment returns.
How does mortgage financing impact the overall return on investment for rental properties?
Mortgage financing in Alexandria can amplify returns through leverage but requires careful analysis of interest costs versus rental income.
Egyptian banks typically offer property loans with 15-25% down payments for residents and higher requirements for foreigners. Interest rates fluctuate based on central bank policy and borrower profiles, currently ranging from 18-25% annually for residential mortgages.
Leverage amplifies both gains and risks. An investor purchasing a EGP 1,000,000 apartment with EGP 250,000 down payment (25%) can control the entire property's appreciation with less capital. If the property appreciates 10% annually, the return on the EGP 250,000 investment is 40% rather than 10%.
However, mortgage interest is tax-deductible from rental income, reducing the effective borrowing cost. Monthly mortgage payments also reduce net cash flow, potentially turning positive cash flow properties into break-even or negative positions.
Rising interest rates can quickly erode profitability, particularly for highly leveraged investments. Investors should stress-test their projections with interest rates 3-5 percentage points higher than current levels to ensure sustained profitability.
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What are the rental yield differences between short-term and long-term rental strategies?
Short-term rentals in Alexandria can deliver yields up to 10% but require significantly more management effort and market knowledge compared to long-term strategies yielding 5-7%.
Long-term rentals provide stable, predictable income with minimal vacancy risk in prime locations. Tenants typically sign 1-year leases with annual rent increases tied to inflation. Management effort is minimal once quality tenants are secured, and operating costs remain low.
Short-term rentals targeting tourists and business travelers can command daily rates of EGP 1,200-2,000 in popular areas like San Stefano and coastal neighborhoods. During peak summer season, properties can achieve 80-90% occupancy, but winter months may drop to 20-30% occupancy.
Short-term strategies require furnished properties, active marketing across multiple platforms, guest management, cleaning services, and regulatory compliance. The investment in furniture, electronics, and maintenance typically adds EGP 50,000-150,000 to setup costs.
Coastal properties benefit most from short-term strategies due to tourist demand, while city center apartments work better for long-term professional tenants. The optimal strategy depends on location, property type, and investor involvement preference.
Can you give examples of average rents for different property types across the city?
| Property Type | Monthly Rent (EGP) | Target Tenants |
|---|---|---|
| 1-bedroom, city center | 2,000 - 4,000 | Young professionals, students |
| 2-bedroom, popular areas | 4,500 - 9,500 | Small families, couples |
| 3-bedroom apartment | 12,000 - 17,000 | Families, expatriates |
| Villa (3-4 bedrooms) | 30,000 - 75,000 | High-income families |
| Commercial office space | 40,000 - 75,000 | Businesses, professionals |
| Furnished short-term | 1,200 - 2,000/day | Tourists, business travelers |
| Studio apartment | 1,500 - 3,000 | Students, single professionals |
Rental prices in Alexandria vary significantly based on location, property condition, and target market segment.
One-bedroom apartments in central areas command EGP 2,000-4,000 monthly, making them accessible to entry-level professionals and university students. These units maintain high occupancy rates due to strong demand from price-sensitive tenants.
Two-bedroom apartments in neighborhoods like San Stefano and Smouha rent for EGP 4,500-9,500, targeting small families and professional couples who prioritize location and amenities over space.
Premium three-bedroom apartments, particularly in coastal areas and upscale compounds, command EGP 12,000-17,000 monthly. These properties attract expatriate families and wealthy Egyptian households seeking luxury amenities.
Furnished short-term rentals achieve daily rates of EGP 1,200-2,000 in tourist areas, potentially generating EGP 36,000-60,000 monthly during peak seasons but significantly less during low-demand periods.
What are the typical renter profiles in Alexandria and what types of properties do they prefer?
Alexandria's rental market serves five distinct tenant categories, each with specific property preferences that directly impact investment strategy and yields.
Young professionals represent the largest tenant group, preferring modern 1-2 bedroom apartments in central locations near business districts and transportation. They prioritize location over space, making smaller units in prime areas highly profitable. Monthly budgets typically range from EGP 3,000-8,000.
Expatriate workers and their families seek secure, well-equipped apartments or villas in established compounds. They prefer furnished properties with reliable utilities, security services, and proximity to international schools. These tenants can afford EGP 10,000-30,000 monthly and often sign longer lease terms.
University students, particularly those attending Alexandria University and Arab Academy for Science, demand affordable housing near campuses. They favor smaller apartments or shared accommodations in neighborhoods like Smouha and the city center, with budgets under EGP 4,000 monthly.
Local families prioritize space, safety, and proximity to schools and shopping centers. They prefer larger 2-3 bedroom apartments in family-friendly neighborhoods like El Maadi, with typical budgets of EGP 5,000-15,000 monthly.
Tourists and short-term visitors seek furnished accommodations near attractions, beaches, and business centers. They prefer well-appointed apartments or chalets with modern amenities and are willing to pay premium daily rates for convenience and location.
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What are the current vacancy rates by property type and neighborhood, and how do they impact yield?
Vacancy rates in Alexandria vary dramatically by property type and location, with premium furnished apartments experiencing 52% occupancy rates while well-located standard rentals achieve under 10% vacancy.
Urban furnished apartments targeting short-term tenants typically achieve 52% occupancy, meaning properties remain vacant nearly half the year. This pattern reflects seasonal tourism fluctuations and the transient nature of business travelers. Investors must factor these vacancy periods into yield calculations, often reducing effective returns by 30-50%.
Tourist and coastal properties experience approximately 48% occupancy with dramatic seasonal variations. Summer months may achieve 80-90% occupancy while winter periods drop to 20-30%. The annual average significantly impacts profitability despite high daily rates during peak periods.
Prime residential units in established neighborhoods like Smouha, El Sheikh Zayed, and the city center maintain vacancy rates under 10% due to strong local demand. These properties benefit from stable tenant pools including professionals, families, and students who require year-round housing.
Older buildings and properties in oversupplied areas face higher vacancy risks, potentially exceeding 20-30% annually. These properties often yield less than 4% even with lower purchase prices due to extended vacancy periods and tenant acquisition costs.
Compound properties with security and amenities typically maintain lower vacancy rates but command higher service fees that reduce net yields.
How have rental prices and yields evolved over the past 5 years and the past year?
Alexandria rental prices increased 3% from 2024 to 2025, with asking prices rising 4%, while property values appreciated 48% over the past five years.
The five-year trend shows consistent property value growth of 48% while rental yields remained stable at 5-7% across most market segments. This stability occurred because rental income increased proportionally with property values, maintaining yield percentages despite significant price appreciation.
During 2024-2025, rental price growth of 3% slightly lagged property value appreciation, creating modest yield compression in some segments. However, asking prices increased 4%, suggesting stronger rental growth ahead as market conditions tighten.
Government infrastructure investment, including the New Administrative Capital project and coastal development initiatives, supported both property values and rental demand throughout this period. Improved transportation links and business district development particularly benefited central Alexandria properties.
The rental market demonstrated resilience during economic challenges, with steady demand from expatriates, professionals, and the education sector maintaining occupancy rates. Tourism recovery post-pandemic also supported short-term rental segments, particularly in coastal areas.
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What are the forecasts for yields in 1 year, 5 years, and 10 years, and how does Alexandria compare with other major cities?
Alexandria rental yields are expected to stabilize at 5-6% over the next year, with premium well-positioned properties outperforming the market average through 2026.
One-year forecasts suggest yield stabilization as rental growth matches property value appreciation. Government infrastructure projects and continued economic development should support rental demand, preventing significant yield compression despite ongoing property price increases.
Five-year projections indicate modest yield improvements as market fundamentals strengthen. Alexandria's position as Egypt's second city, combined with expanding tourism infrastructure and business development, should support steady rental demand growth. Coastal properties may see particular improvement as tourism continues recovering and expanding.
Ten-year forecasts suggest Alexandria will maintain competitive yields compared to other Egyptian cities while offering lower entry costs than Cairo. The city's strategic Mediterranean location, educational institutions, and government investment in infrastructure support long-term rental market growth.
Compared to Cairo, which offers higher yields of 6-8% (up to 12% in premium areas), Alexandria provides more affordable entry points for investors. The coastal city benefits from tourism demand that Cairo lacks, while offering more reasonable property prices that make achieving positive cash flow easier for leveraged investors.
Regional comparison shows Alexandria competing favorably with similar Mediterranean cities, offering higher yields than many European coastal markets while providing exposure to Egypt's growing economy and tourism sector.
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.
Alexandria's rental market offers solid returns for informed investors who understand the relationship between property type, location, and target tenants.
Smaller apartments in central neighborhoods consistently deliver the highest yields, while coastal properties provide upside potential through short-term rental strategies that require active management and higher initial investment.