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Renting vs. Owning a Home in Tanzania

Renting vs. Owning a Home in Tanzania

It was projected that Tanzania will be the 4th most populous country in Africa by 2019 reaching 55.5 million people. An average of 70% of Tanzanians are renters spending more than 25% of their monthly income to cover for housing expenses especially in major cities of Dar es Salaam, Arusha, Mwanza and Dodoma. This is highly caused by market imbalances between the supply and demand for affordable homes.


Why You should consider renting a house in Tanzania


Buying/ Building Costs

The costs associated with building or buying a house are highly influential in making the decision. The majority of the countries’ populations are low to mid-income earners who can barely afford to buy or build better houses. This is caused by limited mortgage financing, high costs of building materials, the long and costly property buying procedure and uncertainty caused by poor land planning. 

On the other hand, renting a home remains the main choice even when it accounts for up to 25% of monthly earnings for individuals in urban areas.

Mobility and Flexibility 

Renting leaves room for flexibility. With changing humans in jobs and preferences, one can decide to relocate freely to a more preferable area. Modern technology has made it easier for people to search for rental properties online through their smartphones or computers. 

On the other hand, renting a home can be a hustle since there are no specific regulations to monitor the amount of rent to be charged. The ultimate decision maker remains to be the landlord, who decides the amount of rent and terms of payment, the most common being 6 months in advance for most places in Tanzania.

Land Laws and Regulations

All the land is owned by the state in Tanzania. The Government only grants the right of land occupancy to citizens of up to 99 years, renewable. Foreigners can only occupy land for investment purposes only. They can be permitted to occupy land through application to the Commissioner for lands or Obtaining derivative rights from the Tanzania Investment Center.

In this case, most individuals would opt for renting rather than acquiring their own houses. For foreigners, renting remains the ultimate choice.

Check out the latest properties for rent in Tanzania


Why you should consider owning a home in Tanzania.

Tanzania experiences a huge increase in population over a short period of time. As a result, the demand for modern and better housing surpasses the supply for such, especially in the biggest cities of Dar es Salaam, Mwanza, Dodoma and Arusha.

Having that in mind, rental properties are considered the last option due to the following;


The Real Estate Market is Pro-landlord Based

Landlords have the ultimate power to freely determine the amount of rent and advance payment terms. Currently, most landlords charge 6-12 months of payment in advance. The legal limit is only 1 month with options to extend, but due to the limited supply of housing units, tenants have no power of the pre-determined terms. By so doing, renting in Tanzania is less of a priority compared to house owning. 

This created room for the endless rivalry between landlords and tenants since the rental market is informal.

General Peace of Mind

Knowing that you live in your own house, gives you peace of mind. You are not liable to monthly rental payments and you can use the amount for investment plans. Most individuals struggle to acquire affordable small plots of land in the outskirts of the urban areas where they can manage to build their affordable homes.


Affordable Property Taxes

Individual properties are levied at flat rates in Tanzania. The government issued a directive that seeks to charge 10,000 Tshs for ordinary houses countrywide, 20,000 for storeys in rural areas and 50,000 for storeys in urban areas which started implementation in the 2018/2019 financial year. These rates are favorably affordable to every citizen in favor of owning houses.


Quality vs Value for Money

One of the biggest challenges in the rental market in Tanzania is tenants paying high amounts of rent compared to the quality of the property. It’s also rare to find a property that suits your needs since most of the rental properties in urban areas are pre-occupied family houses used as a means of income/subsistence. To avoid this, building or buying own house is the best option at hand.

Check out the latest properties for sale in Tanzania


The debate on whether to buy or rent a home is somehow subjective. It depends solely on a number of factors such as the market price of houses.


BE FORWARD Real Estate

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