Starting a furnished apartment rental in Uganda is a lucrative venture, but it requires a clear understanding of the initial investment and the potential returns. Below, we break down the costs involved and estimate earnings based on the current market trends in Uganda.

Initial Investment

The startup costs for a furnished apartment rental depend on several factors, including the location, property size, and level of furnishing. Here’s an estimate for a one-bedroom apartment in Kampala:

1. Property Acquisition Costs:

• Buying a Property: The cost of purchasing a one-bedroom apartment in Kampala ranges from UGX 150,000,000 to UGX 300,000,000 depending on the neighborhood.
• Renting a Property: Monthly rental rates for a one-bedroom apartment range from UGX 800,000 to UGX 1,500,000. Landlords may require 3-6 months of rent upfront.

2. Furnishing Costs:

To make the apartment comfortable and attractive to tenants:

• Furniture (bed, sofa, dining table, chairs): UGX 5,000,000 to UGX 8,000,000.
• Appliances (fridge, cooker, microwave, TV): UGX 3,000,000 to UGX 5,000,000.
• Décor and accessories (curtains, rugs, artwork): UGX 1,000,000 to UGX 2,500,000.
• Kitchenware and bedding: UGX 1,000,000 to UGX 2,000,000. Total Furnishing Cost: UGX 10,000,000 to UGX 17,500,000.

3. Operational Setup Costs:

• Initial utility setup (water, electricity, internet): UGX 500,000 to UGX 1,000,000.
• Marketing (photoshoots, listing platforms): UGX 500,000 to UGX 1,000,000.

Monthly Expenses

Running a furnished apartment rental incurs recurring costs:

• Utilities (electricity, water, internet): UGX 200,000 to UGX 300,000.
• Maintenance and Repairs: UGX 100,000 to UGX 200,000.
• Cleaning Services: UGX 100,000 to UGX 150,000.
• Tax Obligations: Approximately 10% of gross earnings.

Earnings Potential

1. Average Rental Income:

• A one-bedroom furnished apartment in a prime area of Kampala can be rented out at UGX 2,000,000 to UGX 3,500,000 per month.

2. Occupancy Rates:

• Assuming a 75% occupancy rate (23 days per month), expected monthly earnings range from UGX 1,500,000 to UGX 2,625,000.

3. Net Monthly Income:

After deducting monthly expenses (UGX 500,000 to UGX 800,000), net income would be UGX 1,000,000 to UGX 1,825,000.

Return on Investment (ROI)

1. For Property Owners:

• Initial Investment: UGX 160,000,000 to UGX 320,000,000 (property purchase and furnishing).
• Annual Earnings: UGX 12,000,000 to UGX 21,900,000 (net income).
• ROI Period: It would take approximately 7-14 years to recover the initial investment.

2. For Renters:

• Initial Investment: UGX 12,000,000 to UGX 25,000,000 (furnishing and upfront rent).
• Annual Earnings: UGX 12,000,000 to UGX 21,900,000 (net income).
• ROI Period: Recovery is achievable within the first year of operations.

Conclusion

While starting a furnished apartment rental in Uganda requires a significant upfront investment, the potential for steady income and long-term profitability makes it a worthwhile venture. By carefully managing expenses and targeting the right tenant demographics, you can maximize returns and build a sustainable business.