Real estate investment is purchasing a property as an investment opportunity to generate income through rentals or lease rather than using it as a personal residence.
What kind of properties can you invest in?
Generally, there are two types of real estates you can invest in: residential real estate and commercial real estate. However, in Ghana, it is more profitable to invest in residential real estate, as opposed to commercial real estate.
Over the last few years, Ghana has enjoyed a growing real estate market and that is contributed to by the high demand in housing.
Residential properties contribute on a larger scale to the real estate scenery in Ghana as commercial real estate follows closely behind as the second largest. In an article published
by chinagoabroad.com it stated that “In the last ten years the residential market, undoubtedly the most vibrant in the industry, has registered an estimated 85,000 transactions yearly”.
What are the profit yields?
A good rental yield in Accra is set between 6% – 11%, depending on the location of the property.
How do you invest?
There are many ways you can invest in the Ghanaian real estate market. You can:
– Build your own property and rent it out
– Buy an apartment and rent it out
– Invest in a real estate company that allows you to earn dividends from real estate investments without going through the process of buying, managing, or financing any of the properties yourself. (Real estate investment trust).
What should you look out for before investing?
– Before you make any investment decision, you need to know the goal for investing. Are you investing for the long term or short term? Short-term investments are usually for a quick profit, whereas long term investments focus on property
appreciation overtime, which may support future plans like retirement.
– Location is a key factor to consider when it comes to real estate. Proximity of a property to essential amenities such as hospitals, schools, restaurants, convenient shops and malls adds value to the profitability of the property. It may also be advantageous to access which areas could potentially evolve to become high value locations.
– One other important factor to note is the value of the property you want to invest in. It will be a shame to purchase a property for a cheap price only to realise that an insurmountable amount of money is required to renovate/remodel . You want to make sure that what you are purchasing is worth the price you are paying for it and to do that effectively, consider several other factors aside price.
– What is your financial capability? Are you able to outrightly pay for the property? Is there a good payment plan in place that would not put a strain on your finances in the foreseeable future? How long will it take to fully pay out the property? What are the risks you are willing to bear and what are the risks you cannot handle?
Why you should consider real estate investment
Not only is buying and renting out your property a lucrative investment in Ghana but it provides an avenue for a steady income stream. Real estate investment gives you financial security unlike other investment options. In Ghana, the value of properties appreciates over time especially in locations that are considered safe and comfortable.
As previously stated, real estate can be consistently profitable when managed properly.