Rental investment in Morocco: yields, taxes and cities to favour

Buying an apartment to let remains a popular investment in Morocco. But the yield shown in a listing is almost never what you will earn. Here is how to think like an investor.

Calculating a realistic yield

Gross yield = annual rent ÷ total purchase price (costs included). Net yield then deducts service charges, local services tax, maintenance, management, insurance, vacancy and income tax. For long-term lets in the big cities, gross yields are often around 4 to 6%. They are never guaranteed.

Long-term or holiday lets?

• Long-term: steadier income, light management, ideal near universities, the tram and employment zones (Agdal in Rabat, Maarif and Sidi Maarouf in Casablanca, Branes in Tangier).
• Holiday lets: potentially higher income in Marrakech, Agadir or Tangier in summer, but variable occupancy, heavy management and tourist-rental rules to follow.

Tax on rental income

Rental income is subject to income tax, usually through a 10 to 15% withholding on gross rent depending on the amount. The local services tax comes on top. Capital gains are taxed on resale. Have your situation checked by a tax adviser or notary.

Where to invest?

• Casablanca: market depth and liquidity — see prices by neighbourhood in Casablanca.
• Rabat: steady demand and preserved value — see prices in Rabat.
• Tangier: job growth — see buying in Tangier.
• Marrakech and Agadir: holiday lets and second homes — see investing in Marrakech.

Financing a rental investment

A mortgage creates leverage: the rent repays part of the instalment. Check that the deal still works with two months of vacancy a year. Run the numbers with the mortgage calculator.

Tell us your budget and strategy — long-term, holiday, city — and we look for properties consistent with your goal. Describe my project.