Buying an apartment to rent out: yields by district in 2026
An apartment in Baku bought to rent out returns roughly 4–5% of its price a year before costs. According to Prayk's market index (27 September 2026), the median Baku apartment sells for 218,000 AZN and rents for 800 AZN, a gross yield of 4.4% and a payback period of 22.7 years. After vacancies, tax and repairs the figure drops to about 3.5%. Below you will find a district table, a net income calculation and how to approach "cheap and high-yield" listings.
Short answer: as of 27 September 2026, the highest gross yields in Prayk's index are in Absheron district (5.6%, 17.9-year payback) and Khirdalan (5.0%, 20 years); the Baku median is 4.4% and two-room apartments reach 5.1%. Central Baku districts show 2.3–3.3% in the index. In our worked example, a two-room Baku apartment nets 3.6% after one month of vacancy, 14% income tax and a repair reserve, so it pays for itself in about 27–28 years.
How is rental yield calculated?
Gross yield = annual rent ÷ apartment price × 100. For example, the median price of a two-room apartment in Baku is 174,900 AZN and the median rent is 750 AZN a month: 750 × 12 = 9,000 AZN, and 9,000 ÷ 174,900 = 5.1%. The payback period is the inverse: 174,900 ÷ 9,000 = 19.4 years. This describes a world without costs; real income is always lower. For the tenant's point of view, see our companion guide: buy an apartment or keep renting.
Which district earns the most rent?
The table shows district medians calculated from Prayk's listing observations over the last 90 days (the same source as the apartment investment page). These are asking prices, not completed deals.
| District / city | Median sale price, AZN | Median rent, AZN/month | Gross yield | Payback, years |
|---|---|---|---|---|
| Absheron district | 85,000 | 400 | 5.6% | 17.9 |
| Khirdalan | 108,500 | 450 | 5.0% | 20.0 |
| Ganja | 87,500 | 330 | 4.5% | 22.2 |
| Baku (listings without a district) | 218,000 | 800 | 4.4% | 22.7 |
| Mingachevir | 83,000 | 300 | 4.3% | 23.3 |
| Masazir | 85,000 | 300 | 4.2% | 23.8 |
| Khatai | 175,000 | 600 | 4.1% | 24.4 |
| Surakhani | 132,000 | 450 | 4.1% | 24.4 |
| Sumgayit | 114,000 | 360 | 3.8% | 26.3 |
| Binagadi | 155,000 | 450 | 3.5% | 28.6 |
| Nasimi | 180,000 | 500 | 3.3% | 30.3 |
| Yasamal | 197,000 | 500 | 3.0% | 33.3 |
| Nizami | 182,000 | 400 | 2.6% | 38.5 |
| Sabunchu | 161,000 | 330 | 2.5% | 40.0 |
| Narimanov | 287,000 | 550 | 2.3% | 43.5 |
The investment page also ranks Shirvan (6.4%), Mehdiabad and Astara near the top, but their sale or rent baskets have fewer than 15 observations, and we do not publish figures for such baskets. Rent baskets in central districts are also small and come out below the overall Baku rent median (800 AZN); the district rents we measured by title search on 22 September (900 AZN in Nasimi and Narimanov, 785 AZN in Yasamal) were higher. So read the 2–3% yields in the centre with caution; the real figure may be somewhat higher.
By number of rooms, the highest gross yield in Baku is for two-room apartments (5.1%), followed by three-room (4.7%), one-room (4.5%) and four-room (4.1%).
From gross yield to net income: what gets deducted?
The example below is for a median two-room apartment in Baku. The vacancy and repair reserve are our assumptions; replace them with your own numbers.
| Item | Annual amount, AZN | Explanation |
|---|---|---|
| Gross rental income | 9,000 | 750 AZN × 12 months |
| Vacancy | −750 | One empty month a year between tenants (assumption) |
| Income tax | −1,155 | 14% of actual income (per the State Tax Service booklet) |
| Repair and appliance reserve | −750 | One month's rent a year (assumption) |
| Net income | 6,345 | 3.6% of the 174,900 AZN price, payback about 27.6 years |
Not included: notary and registration costs, initial renovation and furniture if the apartment is bought unfinished, agent fees, insurance, annual property tax and mortgage interest if you borrow. Each of these lowers the net return further. A change in the value of the apartment itself (up or down) is a separate gain or loss and is not counted here.
On tax: according to the State Tax Service booklet on personal income tax, rental payments are taxed at 14%; if the tenant paying the rent is a registered taxpayer, the tax is withheld at source. If the tenant is a private individual, the duty to register and file a declaration may fall on you. Rules can change, so check your situation at taxes.gov.az or with the tax office.
"Cheap and high-yield" listings: examples and traps
The investment page shows, for each district, apartment sale listings at least 10% below the market median and calculates their expected yield from the district rent median (by room count where possible). Examples from the list on the morning of 27 September:
| Listing | Price, AZN | Below market | Expected rent, AZN/month | Gross yield |
|---|---|---|---|---|
| Baku, Khatai district, Hazi Aslanov metro, 3 rooms, 85 m², new build | 145,000 | 44% | 1,000 | 8.3% |
| Masazir, 2 rooms, 42 m², new build | 87,000 | 44% | 750 | 10.3% |
| Absheron district, Saray, 2 rooms, 74 m², new build | 49,700 | 42% | 400 | 9.7% |
| Khirdalan, 2 rooms, 60 m², new build | 65,000 | 44% | 450 | 8.3% |
| Mingachevir, 2 rooms, 64 m², older building | 56,000 | 24% | 400 | 8.6% |
| Ganja, 2 rooms, 48 m² | 48,000 | 42% | 300 | 7.5% |
Note: Prayk leaves listings more than 45% below market out of this list entirely, because such a price is usually a mistake, a down-payment amount or a trap. Most examples are 42–44% cheaper, which is close to that limit. For such a listing always ask why: no title deed, the price is only the down payment, the building is under construction, the apartment is unfinished or on the ground floor. Title deeds have their own guide: risks of buying an apartment without a deed.
What should you look for in a rental apartment?
- Rental demand. Look at rental listings for similar apartments in the area in the Apartments section: many listings mean a lot of competition.
- Metro and commute. Travel time matters to tenants; check the walking distance to the station on the metro map. More: apartment prices near the metro.
- Number of rooms. In Baku two-room apartments lead on gross yield; four-room rents are low relative to their price.
- Building type. New builds rent for more, but they also cost more and are often sold unfinished; see new build vs older building.
- Legal status. Check the title deed, encumbrances (mortgage, seizure) and that the seller is the owner before you buy.
- Price check. Look at a listing's price history and market comparison with the "Check a listing" report on the listing page, and at the value of a similar apartment with "What's my home worth?".
What should you remember when renting it out?
- Sign a written contract; under Article 19.1 of the Law on the State Register of Real Estate, a lease right for more than eleven months is subject to state registration.
- Put the deposit amount and return conditions into the contract, and photograph the meters and contents on move-in day.
- Agree in advance who pays the utilities.
- Declare rental income according to the tax rules.
Frequently asked questions
What yield does a rental apartment in Baku give?
As of 27 September 2026, Prayk's index puts the gross yield of the median Baku apartment at 4.4% and of two-room apartments at 5.1%. After vacancy, 14% income tax and a repair reserve, the net return in our example is about 3.6%.
How many years does a rental apartment take to pay for itself?
On a gross basis it is 22.7 years in Baku, 19.4 years for a two-room apartment, 17.9 years in Absheron district and 20 years in Khirdalan. Once costs are included, the period for a two-room Baku apartment stretches to about 27–28 years.
Which district has the highest rental yield?
Among districts with a reliable sample, Absheron district (5.6%) and Khirdalan (5.0%) lead, followed by Ganja (4.5%) and the Baku median (4.4%). Within Baku, Khatai and Surakhani at 4.1% are ahead of the central districts.
Is tax paid on rental income?
Yes. According to the State Tax Service booklet, rental payments are subject to 14% income tax. If the tenant is a taxpayer, they withhold it at source; with a private tenant, the declaration duty may be yours. This is general information; check the exact rules at taxes.gov.az.
Is an apartment 40% below market a good investment?
It may be, but find the reason first. Prayk does not include listings more than 45% below market in the investment list, because such prices are usually mistakes or traps. Even at a 40% discount, check the title deed on site, whether the price is the full amount, and the condition of the apartment.
Sources and methodology
The figures come from Prayk's open market API on 27 September 2026: market/districts, market/districts/baki and market/invest. The index is based on apartment listing observations over the last 90 days; district baskets are built separately for sale and rent, with the median and 25th–75th percentiles calculated and outliers filtered using the 1.5 IQR rule. Gross yield = median rent × 12 ÷ median sale price; payback is the inverse. The "Baku" row covers Baku listings without a stated district (46,480 sale and 20,920 rent observations). "Cheap and high-yield" listings are published apartment sale listings 10–45% below the market median, with expected rent taken from the district and room-count median; at most 6 listings per district. We do not publish figures for baskets with fewer than 15 observations. The vacancy and repair reserve in the net income table are editorial assumptions. Tax: State Tax Service — personal income tax booklet; lease registration: Law on the State Register of Real Estate. This article is general information, not investment or tax advice.