For many foreigners looking at real estate in Africa, one of the biggest questions is simple:
Can I earn reliable rental income from a property investment?
In Cape Verde — a rising tourism hotspot with year-round sun, beautiful beaches and expanding flight connections — the answer for many types of investors is increasingly yes. But yields vary depending on how you choose to invest. Here’s what the data and market trends suggest.
Understanding Rental Yield
Before we dive into numbers, remember what rental yield means:
- Gross rental yield = (Annual rental income ÷ property purchase price) × 100
- Net rental yield takes expenses into account (management, maintenance, taxes, etc.) — and will be lower.
High yields usually point to tourist lodging or short-term rentals, while lower yields are typical for long-term rentals.
1. Typical Returns in Cape Verde
Cape Verde’s property market — particularly in tourism-oriented islands like Sal, Boa Vista and São Vicente — shows annual rental yields in the 6–10 % range for short-term investment properties.
This range is competitive when compared with many Western European markets and reflects strong tourism demand paired with relatively moderate property prices.
For example:
- Tourist-focused apartments near the beach can generate €50–€80 per night in peak season — and with annual occupancy estimates of 60–70 %, this produces healthy returns.
- In urban centres like Praia, gross yields in city centres are reported around 10 %, making traditional rentals interesting as well
2. Short-Term (Vacation) vs Long-Term Rentals
Short-Term / Vacation Rentals
This is the most attractive yield segment for investors in Cape Verde:
- Beachfront apartments and villas tend to outperform regular rentals because of strong tourism and seasonality.
- With careful pricing and management — especially in peak months — some properties can exceed the 8 – 10 % gross yield mark when occupancy and nightly rates are optimized.
However, returns depend on: - property quality and location
- seasonal demand cycles
- management strategy
- marketing to tourists
Long-Term Rentals Yields here are usually lower than short-term rentals but offer steadier, year-round income. In urban areas, longer-term leases may produce consistent returns, although a slightly lower percentage than short-term tourist rentals.
3. What Influences Rental Yield in Cape Verde
Location Matters
- Boa Vista and Sal are the most talked-about islands for tourism yields due to high international visitation and strong short-term rental demand.
- Praia — Cape Verde’s capital — also offers competitive yields in city rentals, attracting both locals and expats.
Tourism Growth
The consistent growth in tourist arrivals continues to strengthen demand for short-stay accommodations, which supports rental income potential.
Affordable Entry Prices
Lower property acquisition prices relative to many developed markets mean yield percentages can look more attractive, especially for vacation rental investors.
Tax & Regulatory Environment
While Cape Verde does tax rental income, the overall cost structure — including purchase costs and local taxes — remains competitive compared with many Western markets.
4. Risks & Realities to Consider
No market is without challenges, and Cape Verde is no exception:
- Seasonality: Tourist bookings fluctuate with seasons — peak months yield higher incomes, while shoulder periods may temporarily slow bookings.
- Management Costs: Effective short-term rental income often depends on property management, marketing and booking platform fees.
- Local Market Nuances: Infrastructure, local rental regulations and marketing reach can affect occupancy and rates.
This means that gross rental yield percentages are useful signals, but net returns depend on execution.
5. What This Means for Foreign Investors
Cape Verde’s rental yields — especially for tourism-oriented properties — make it a compelling consideration for foreigners seeking a blend of lifestyle and income returns.
- Competitive gross yields (often 6 – 10 %+)
- Strong growth in tourism demand
- Affordable entry points compared to many established vacation markets
- Room for both short-term and long-term income streams
Conclusion
If you’re evaluating property investments in Africa’s coastal or leisure markets, Cape Verde stands out as a location where tourism demand meets real rental income potential — especially in short-term rental strategies. Whether you’re looking for steady long-term rental income or vacation-rental returns, understanding local demand, pricing and operational costs will be key to maximizing your yield.
