How to Start a Real Estate Business in Ethiopia | 2024

How to Start a Real Estate Business in Ethiopia.

A real estate business, these days (2024), is becoming the cornerstone of any country’s economic growth. For investors? It is their one-one way ticket to accumulating substantial wealth in the long-run, and create a buzz about their brand out to the world.

The market is hot right now, and securing your ranking position as a real estate agent isn’t for the faint of heart as there’s data-driven insights. Just like that, if you’re someone who can relate to the topic in line “How to Start a Real Estate Business in Ethiopia,” this blog post is a way to get our message out regarding the steps to follow.

In 2024, what better way is there than getting into the lucrative industry of real estate, most of all, the untapped market of Ethiopia to achieve that financial reward for your company which is already thriving in other fields or nations? — There’s none really. 

The housing market of Addis Ababa is waiting for you if you approach it with the right mindset and strategy. As a result, you’ll get the secret sauce that will give you something that homebuyers of the city cannot turn down your “for sale” project properties and apartment offerings.

Now, whether you’re a well-established local venture or a foreigner firm scouring countries for your next flagship investment, there’s definitely revenue potential in the real estate industry of Ethiopia. Here’s what the sector looks like… followed by 6 actionable steps.

What does the Real Estate Business of Ethiopia Look Like?

For them to get results when it comes to the economic growth of their country, most of the African nations are changing their past tortured image. They needed to work significantly on political stability — so as to give potential investors a goldmine opportunity on where to safely put their money.

Ethiopia, as one nation in the Horn of Africa that is working religiously on settling down peace for xyz internal conflict, is becoming a thriving ground for any firm out there interested in development and development only. From agriculture, finance, to technology connectivity, you’re welcomed with open arms!

However, since we’re talking about the real estate market, we need to get specific on that. Surprisingly, besides expanding their presence in Ethiopia, foreign real estate developers are being viewed in some ways as the local ones. Yes, they are setting their brand up for various scenarios. Best of all, they’re crashing it!

Rockstone Real Estate, Metropolitan Real Estate, Tsehay Real Estate, and La Gare Real Estate, all these are foreign real estates in Ethiopia which came all the way from Germany, USA (United States of America), China, and Dubai respectively.

To ensure everyone is on the same page, perhaps the rapid urbanization call out, and an increase in population flow towards the capital city Addis Ababa has raised the demand for affordable housing (be it residential or commercial properties), not the other way around.

If you’ll be working as a part of real estate development, inflation hedging, steady income stream, property value appreciation, potential tax advantages (including depreciation, mortgage interest, and property tax deductions), and diversification of investment portfolio are just your typical benefits on your average Tuesday.

As a good news, the government of Ethiopia is making significant positive changes in infrastructure development, including roads, airports, railways, utilities, etc. Allowing those projects to work seamlessly together, they’re facilitating real estate developments in areas that were not accessible before.

The 5 Different Types of Real Estate Businesses in 2024:

Yes, the topic is about starting a real estate business in Ethiopia. Still and all, that’s a broader guide. I mean, for some Ethio entrepreneurs “a real estate business” means becoming an agent, for brokers “a real estate business” means becoming a real estate flipper, and for companies “a real estate business” means becoming a real estate developer.

Wanting to make something pleasing to read, and help readers (YOU) with their pain points, we have to make a detour here by laying down the different types of real estate businesses for anyone looking to enter this field no matter where they are coming from or what they want to achieve with it.

You need to understand that this end-to-end article is for firms, companies, businesses, organizations, or anything in between who are on a mission to become a real estate developer in Ethiopia. If you’re an entrepreneur starting from the bottom, we have a guide on how to become a real estate agent/broker in Ethiopia.

When you differentiate the types of real estate businesses, as each type offers unique opportunities and challenges, it goes a long way in helping you to choose the right path to make an impact. For that, we’ve been forced to define the 5 most common ones (You get the idea).

1. Real Estate Agent

Real Estate Agents, which I’ve done the really hard work to figure out as I’m one of them, are those who facilitate the buying and selling of properties and apartments for home buyer clients, while considering the company culture they’re working with. Thus, earning a commission on the transactions, probably in percentages.

To become a real estate agent in Addis Ababa, you’re required to have a strong interpersonal skills, a thorough understanding of the market, getting a real estate license, finding local brokerages to work with, and also joining the National Association of Realtors (NAR) in order to access Multiple Listing Services (MLS), where you’ll be able to search through all of the listings in the network.

About a year ago, I didn’t know that it would be possible to become a real estate agent in Ethiopia with ease, plus I never expected to become a teacher for others to follow in my footsteps. Amazingly, from the timeline qualifications, costs of getting your license (based on your state), to commission structure, I know the answers.

2. Real Estate Developer

Real Estate Developers are those companies that are involved in the purchase of land, the construction of projects (like apartments), or participate in the significant renovation of buildings (like interior/exterior designs), and property management services. The developer’s brand voice is what speaks to its target audience here.

I said it in my blog post “best local real estate developers” once, in Ethiopia, there are hundreds of companies involved in this business. Doing so, we have summarized them based on size, specialization, scope of service, and the types of real estates (residential, commercial, industrial, etc) they’re working on.

With new companies emerging and existing developers expanding their project operations regularly, Noah Real Estate, Ayat Real Estate, Flintstone Homes, Gift Real Estate, and Sunshine Real Estate are some of the prominent real estates of Ethiopia that have get serious attention through the country.

3. Real Estate Flipper

Real Estate Flippers are those who are involved in purchasing properties, and then selling them at a higher profit price down the line. Mind that this real estate business model often needs a focused eye for potential, knowledge of home repairing or renovation costs, and the ability to act quickly in a competitive and dynamic market.

4. Real Estate Wholesaler

Real Estate Wholesalers are those who find and contract undervalued properties and projects, and then eventually sell those contracts to potential buyers (the next door investor), profiting from the difference between the contracted price and the sale price. This business model doesn’t require a significant capital for entry.

5. Buying and Holding

Buying and Holding types of real estate business, lastly, is a strategy that involves purchasing properties and holding onto them for a considerable period of time. Besides earning you money through rental income, it will get you capital gains when the property is finally sold out. It is a long-term game plan for passive income ideas.

6 Key Steps to Start a Real Estate Business in Ethiopia…

We’re not sugar coating it. Truth has to be told that Ethiopia, recently, has one of the rapidly growing economies that redefines the entire continent. Preceded by a tumultuous past of political, social, and economical aspects, history is becoming never the same. 

Investing in Ethiopia’s real estate is not only profitable business in 2024, it is also a way to help the rising population find a shelter roof above their shoulders. Likewise to be a successful real estate developer, you need to know much more than signing an agreement with a contractor like Yirgalem construction and calling it an investment.

For you to stay in the industry, you need to research the market, comply with the legal stuff, find ways to build a brand, and network and collaborate with key players in the field like us (agents) who can help you win the trust of your customer with reasoning and unbiased content. 

Having said all of that, the following are the 6 essential steps to start a profitable real estate business in Ethiopia (for the YEAR 2024 and BEYOND that):

1. Research the Market and Select Your Niche.

2. Craft a Business Plan, and Get to Finance it.

3. Compliance with Legality (ie. for Foreigners).

4. Build a Brand & Online Presence Strategies.

5. Property Acquisition & Client Managements.

6. Grow, Network, and Make a Lifetime Impact.

Is Real Estate a Profitable Business in Ethiopia, in 2024?

From a traditional point of view, generally real estate has been viewed as a highly profitable venture to be in. Also, when it comes to the homeland Ethiopia, a number of different factors are contributing to the sector’s business, from rapid urbanization, exponential economic growth, to demographic factors.

Considering future prospects of the housing demand that ramps up, investing in Ethiopia’s real estate is really a worthwhile one in 2024. The current government of the country giving a fully undivided infrastructural development is going to have a significant effect on the economy.

Even though success in the real estate business requires strategic planning, market understanding, and the ability to adapt to changing market conditions, in the long-run, it offers various pathways to profitability, whether through rental income, property flipping, or large-scale development projects.

So yeah, real estate is a profitable business in Ethiopia. The good news is that the country’s majority population falls between the ages of 15 to 65, which makes up a large workforce. As such, most of them will migrate to the city of Addis to participate in mutual development

Certainly, despite ongoing infrastructure development in the nation, there are still deficiencies in terms of road networks, basic utilities, and public services in some areas. In return, such concerns may impact the attractiveness and viability of real estate projects in certain locations so to speak honestly.

Overall Guide on How to Start a Real Estate Business in Ethiopia:

Real estate business in Ethiopia is experiencing significant growth due to economic expansion, urbanization, government initiatives, FDI, infrastructure development, and demographic factors, offering exciting opportunities for any potential investors. 

Right now, in the country, there is a growing population with an increasing need for housing, which influences affordability. The demand-supply gap contributes to rising prices in urban areas where there is limited available land for development. This means, you need to be prepared to put in the work and learn from your mistakes.

Factors such as urbanization and migration from rural areas to cities further driving up the demand, starting a real estate business in Ethiopia is really profitable. Just like that, challenges related to land ownership, access to finance, infrastructure deficiencies, bureaucracy, and market transparency need to be addressed.

To fully unlock the sector, you need to understand the potential for profit, and avoid common pitfalls. Then you can build a sustainable real estate business. Remember, the keys in real estate lies in thorough planning, continuous learning, and adaptability to market changes.

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