Authored by the expert who managed and guided the team behind the Saudi Arabia Property Pack
Yes, the analysis of Riyadh's property market is included in our pack
Riyadh's rental market is evolving fast, shaped by job-driven migration, mega-projects, and a recent rent-freeze policy that changes the investment math.
This guide breaks down current rental yields in Riyadh, covering gross and net returns, neighborhood differences, property types, and the costs that eat into profit.
We constantly update this blog post to reflect the latest data and market shifts.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Riyadh.
Insights
- Riyadh's average gross rental yield sits around 5.8% in early 2026, but the five-year rent-freeze policy caps how much landlords can grow income from existing leases.
- Smaller apartments (studios and 1-bedrooms) consistently deliver the highest yield per riyal invested, often 1 to 2 percentage points above villas.
- The spread between Riyadh's highest-yield and lowest-yield neighborhoods reaches 3 to 4 percentage points, making location a major return driver.
- Net yields typically run about 1 to 1.5 percentage points below gross, with HVAC maintenance and vacancy being the biggest cost surprises.
- Areas like Ar Rimal and Al Narjis offer stronger yields because purchase prices have not caught up with strong renter demand.
- Premium districts such as Hittin and the Diplomatic Quarter see compressed yields because prestige drives prices faster than rents.
- Riyadh's blended vacancy rate hovers around 8%, but well-priced apartments can run closer to 5% while large luxury villas often sit at 10% or higher.
- The Riyadh Metro expansion is lifting rents in neighborhoods near new stations, making connectivity key for yield forecasting.
- Saudi Arabia has no annual property tax, but the 5% Real Estate Transaction Tax at purchase affects your total return and payback timeline.
- Full-service property management costs between 5% and 10% of collected rent, plus a leasing fee that can reach one month's rent.
What are the rental yields in Riyadh as of 2026?
What's the average gross rental yield in Riyadh as of 2026?
As of early 2026, the average gross rental yield for residential property in Riyadh sits at approximately 5.8%, reflecting a market where sale prices and rents have been climbing together.
Most typical residential properties fall within a gross yield range of 4.5% to 7.5%, depending on location, property type, and purchase price alignment with rental demand.
This puts Riyadh roughly in line with other major Gulf cities, though Saudi Arabia has been noted as a regional leader for rental returns.
The biggest factor shaping Riyadh gross yields right now is the September 2025 rent-freeze policy, which limits rent increases on existing leases for five years.
What's the average net rental yield in Riyadh as of 2026?
As of early 2026, the average net rental yield for residential property in Riyadh is approximately 4.3%, accounting for real-world costs beyond just collecting rent.
The typical gap between gross and net yield runs about 1 to 1.5 percentage points, reflecting vacancy, maintenance, management fees, and turnover costs.
In Riyadh specifically, the expense that most eats into gross yield is HVAC maintenance, because extreme summer heat means air conditioning systems need frequent servicing or early replacement.
Most standard investment properties deliver net yields in the 3.2% to 5.8% range, with the lower end reflecting premium areas or larger villas and the upper end reflecting well-located apartments.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Riyadh.
We made this infographic to show you how property prices in Saudi Arabia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What yield is considered "good" in Riyadh in 2026?
In Riyadh's early 2026 market, a gross rental yield around 6% or higher is generally considered "good" by local investors, providing margin above costs and accounting for the rent-freeze policy.
The threshold separating average from high-performing properties sits at roughly 5% net yield, meaning solid returns after vacancy, maintenance, and management.
How much do yields vary by neighborhood in Riyadh as of 2026?
As of early 2026, the spread in gross yields between Riyadh's highest and lowest-yield neighborhoods is about 3 to 4 percentage points.
Neighborhoods delivering the highest yields are areas where prices remain reasonable but demand is strong, such as Ar Rimal, Al Narjis, and Al Rawdah.
Neighborhoods delivering the lowest yields are premium districts where prestige pushes prices faster than rents, such as Hittin, Al Mohammadiyah, and the Diplomatic Quarter.
Yields vary so much because of the gap between what buyers pay (often driven by prestige) and what tenants can actually afford monthly.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Riyadh.
How much do yields vary by property type in Riyadh as of 2026?
As of early 2026, gross yields across property types in Riyadh range from roughly 4% for large villas up to 7% or more for well-located studios and one-bedrooms.
The property type delivering the highest yield is smaller apartments, especially studios and one-bedrooms, because they attract the widest renter pool and cost less to purchase.
The property type delivering the lowest yield is standalone villas, because high purchase prices are not matched by proportionally higher rents.
Yields differ because smaller units rent for more per square meter than larger ones, giving better income relative to capital outlay.
By the way, you might want to read the following:
What's the typical vacancy rate in Riyadh as of 2026?
As of early 2026, the average residential vacancy rate in Riyadh is approximately 8%, reflecting strong demand balanced by significant new supply.
Across neighborhoods, vacancy ranges from about 5% in central, commute-friendly areas up to 12% for large luxury villas in less accessible locations.
The main factor driving vacancy is the pace of new supply, with thousands of units being delivered while demand remains concentrated in specific areas and price points.
Riyadh's vacancy rate is roughly in line with other fast-growing Gulf cities, and the rent-freeze policy may help keep occupancy stable.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Riyadh.
What's the rent-to-price ratio in Riyadh as of 2026?
As of early 2026, the average rent-to-price ratio in Riyadh (annual rent divided by purchase price) is approximately 5.8%, essentially the same as gross yield.
For buy-to-let investors, a rent-to-price ratio above 5% is generally favorable, meaning rental income represents a meaningful return on capital before expenses.
Riyadh's ratio compares well to other major Gulf cities and sits above many mature Western markets, though the rent-freeze policy limits improvement potential.
We have made this infographic to give you a quick and clear snapshot of the property market in Saudi Arabia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which neighborhoods and micro-areas in Riyadh give the best yields as of 2026?
Where are the highest-yield areas in Riyadh as of 2026?
As of early 2026, the top three highest-yield neighborhoods in Riyadh are Ar Rimal, Al Narjis, and Al Rawdah, where strong demand meets prices that have not caught up to premium districts.
In these areas, investors can typically expect gross yields in the 6% to 7.5% range, well above the citywide average.
These high-yield neighborhoods share practical accessibility for working renters combined with relatively affordable entry prices.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Riyadh.
Where are the lowest-yield areas in Riyadh as of 2026?
As of early 2026, the lowest-yield neighborhoods in Riyadh are Hittin, Al Mohammadiyah, and the Diplomatic Quarter, where prestige drives prices above what rental income can justify.
In these areas, investors typically see gross yields in the 4% to 5% range, meaning money works less hard than in practical neighborhoods.
Yields are compressed because buyers pay premiums for status or future appreciation while tenants only pay rents reflecting practical living value.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Riyadh.
Which areas have the lowest vacancy in Riyadh as of 2026?
As of early 2026, the Riyadh neighborhoods with lowest vacancy rates are Al Olaya, Al Sulaymaniyah, and Al Wurud, where central location and commuting access keep units filled.
In these areas, vacancy rates run in the 5% to 7% range, roughly two to four weeks of downtime per year.
The main demand driver is proximity to major employment hubs, making these practical choices for professionals wanting short commutes.
The trade-off is that purchase prices tend to be higher, compressing yields even though occupancy is more reliable.
Which areas have the most renter demand in Riyadh right now?
The neighborhoods with strongest renter demand are Al Olaya for central access, Al Malqa for north-side corporate proximity, and Ar Rimal for value-conscious professionals in the east.
The renter profile driving demand is young to mid-career professionals relocating for Vision 2030-linked jobs and corporate expansions.
In these high-demand neighborhoods, well-priced listings typically get filled within one to three weeks.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Riyadh.
Which upcoming projects could boost rents and rental yields in Riyadh as of 2026?
As of early 2026, the top projects expected to boost rents are Diriyah (cultural destination), New Murabba (major urban development), and the expanding Riyadh Metro network.
Neighborhoods likely to benefit include areas near Diriyah in the northwest, central-north districts near New Murabba, and areas with metro station proximity like Al Malqa, Al Aqiq, and Al Yasmin.
Investors might realistically expect rent increases of 5% to 15% once projects reach key milestones, though the rent-freeze policy means existing tenants will not see increases until leases end.
You'll find our latest property market analysis about Riyadh here.
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What property type should I buy for renting in Riyadh as of 2026?
Between studios and larger units in Riyadh, which performs best in 2026?
As of early 2026, studios and one-bedroom apartments perform best for yield and occupancy, attracting the widest renter pool and requiring less capital.
Studios typically deliver gross yields in the 6% to 7.5% range (roughly SAR 22,500 to SAR 28,000 or $6,000 to $7,500 or €5,500 to €6,900 per SAR 375,000 invested), while larger units fall in the 5% to 6% range.
Smaller units outperform because of the influx of single professionals and young couples who need affordable housing quickly.
However, larger units become better if targeting expat families who sign longer leases and provide more stable income over multi-year holdings.
What property types are in most demand in Riyadh as of 2026?
As of early 2026, apartments are the most in-demand property type in Riyadh, dominating renter searches and transaction volumes.
The top three property types by demand are: small to mid-size apartments (one to three bedrooms), townhouses in master-planned communities, and villas in family-oriented compounds.
The trend driving this pattern is the wave of working-age professionals relocating for Vision 2030-linked jobs, prioritizing convenience and cost over space.
Large standalone luxury villas outside compounds are underperforming in demand because the tenant pool is small and leasing takes longer.
What unit size has the best yield per m² in Riyadh as of 2026?
As of early 2026, the unit size delivering the best gross yield per square meter in Riyadh is 40 to 80 square meters, covering studios and compact one-bedrooms.
For this size, typical yield per sqm works out to SAR 350 to SAR 450 annually ($95 to $120 or €85 to €110), higher than larger units achieve.
Smaller units have better yield per sqm because tenants pay a premium for the first bedroom and basic amenities, but each additional bedroom adds less rental value relative to extra cost.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Riyadh.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Saudi Arabia 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 costs cut my net yield in Riyadh as of 2026?
What are typical property taxes and recurring local fees in Riyadh as of 2026?
As of early 2026, Saudi Arabia has no annual property tax for residential real estate, so Riyadh landlords do not face a recurring tax bill based on property value.
The main charge is the 5% Real Estate Transaction Tax (RETT) paid at purchase, which works out to SAR 50,000 ($13,300 or €12,200) on a SAR 1 million property, plus any building service or compound fees.
Without annual property tax, transaction and service costs typically represent only 1% to 3% of gross rental income annually for ongoing fees.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Riyadh.
What insurance, maintenance, and annual repair costs should landlords budget in Riyadh right now?
Landlord insurance in Riyadh runs SAR 1,000 to SAR 3,000 annually ($270 to $800 or €250 to €730) depending on property value and coverage.
For maintenance and repairs, budget 0.75% to 1.5% of property value yearly, meaning SAR 7,500 to SAR 15,000 ($2,000 to $4,000 or €1,850 to €3,700) for a SAR 1 million apartment.
The expense catching landlords off guard is HVAC servicing and replacement, because extreme summer heat causes air conditioning to fail sooner than in milder climates.
Combined, budget SAR 10,000 to SAR 20,000 per year ($2,700 to $5,300 or €2,500 to €4,900) for insurance, maintenance, and repairs on a typical apartment.
Which utilities do landlords typically pay, and what do they cost in Riyadh right now?
In most Riyadh long-term leases, tenants pay utilities directly, so landlords have no ongoing costs except during vacant periods or "all-inclusive" compound rentals.
When landlords bundle utilities, electricity is the main expense, running SAR 300 to SAR 800 monthly ($80 to $215 or €75 to €195) depending on size and AC usage.
What does full-service property management cost, including leasing, in Riyadh as of 2026?
As of early 2026, full-service property management costs 5% to 10% of collected annual rent, meaning SAR 3,000 to SAR 6,000 ($800 to $1,600 or €730 to €1,470) for a SAR 60,000/year rental.
Leasing or tenant-placement adds a one-time fee of half to one month's rent, meaning SAR 2,500 to SAR 5,000 ($670 to $1,330 or €610 to €1,220) per new tenant.
What's a realistic vacancy buffer in Riyadh as of 2026?
As of early 2026, landlords should set aside approximately 8% of annual rental income as a vacancy buffer for time between tenants and marketing periods.
This translates to roughly four weeks of vacancy per year, though well-priced units in high-demand areas may sit empty just two weeks while large villas can take six weeks or more.
Buying real estate in Riyadh can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Riyadh, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why we trust it | How we used it |
|---|---|---|
| General Authority for Statistics (GASTAT) | Saudi Arabia's official statistics agency and primary reference for national price indices. | We used it to anchor price-side yields and sanity-check private-sector narratives against official benchmarks. |
| GASTAT Real Estate Price Index Q3 2025 | Official index built from actual transaction data with disclosed methodology. | We used it to confirm Riyadh price momentum and avoid relying solely on listings data. |
| Saudi Central Bank (SAMA) Inflation Report | The central bank and top-tier official macro data publisher. | We used it to understand inflation backdrop and provide context for good yield thresholds. |
| Cavendish Maxwell H1 2025 Report | Recognized consultancy publishing data-driven reports with disclosed sourcing. | We used it for Riyadh price levels, rent growth, and supply pipeline to triangulate yield estimates. |
| Saudi Ministry of Justice (MOJ) | Official ministry responsible for transaction systems with open-data reporting. | We used it as an official reference to validate that our narrative matches trackable market activity. |
| Real Estate General Authority (REGA) Indicators | National regulator publishing official market indicators by type and geography. | We used it to triangulate sales versus rental activity and ground neighborhood claims. |
| REGA Ejar Platform Explainer | Regulator describing the government rental platform for formalizing leases. | We used it to ground how leasing works in Riyadh for vacancy and rent-setting accuracy. |
| Ejar Official Platform | Official national platform for documenting rental contracts. | We used it to support discussion of contract structure and why headline rents can differ from actual collection. |
| ZATCA Real Estate Transaction Tax | Official tax authority and definitive source for RETT rules. | We used it to model buy-side costs that influence net yield on shorter holdings. |
| SERA Electricity Tariff | Official regulator publishing household tariff structure. | We used it to outline realistic utility scenarios and avoid informal cost estimates. |
| CBRE Q3 2025 Market Review | Global real estate firm with consistent research practice. | We used it for policy signals and market context including the rent-freeze. |
| Reuters Rent-Freeze Coverage | Top-tier global newsroom with strong sourcing standards. | We used it to reflect the policy change affecting rent growth assumptions. |
| Associated Press Rent-Freeze Coverage | Major global newswire for independent corroboration. | We used it to corroborate rent-freeze details across multiple sources. |
| IMF World Economic Outlook July 2025 | International organization and gold-standard macro source. | We used it to frame demand drivers like growth, jobs, and migration affecting occupancy. |
| Zawya Sakan Report Coverage | Structured report with specific yield datapoints for triangulation. | We used it as a numerical anchor for gross yield and consistency check against movements. |
| JLL KSA Living Q3 2025 | Global real estate firm with deep Saudi market presence. | We used it to identify transaction popularity by neighborhood and property type. |
| JLL KSA Living Q2 2025 | Consistent quarterly reporting for tracking demand trends. | We used it to confirm apartment-first demand and validate which property types move fastest. |
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