6 Proven Ways To Invest in Real Estate in Ghana

Most investors feel more comfortable putting their money in assets like stocks and bonds than investing in a property in Ghana. Sometimes investing in bonds becomes objective because of the less risky nature of portfolios in the debt market.  

But over the years, Ghana's real estate has proven to be an equally excellent portfolio of investment diversification because of its cash flow attribute. Moreover, buying real estate in Ghana has proven to be a long-term investment performance without dispute.

Though investing in a property in Ghana will give high Return-On-Investment (ROI), this does not come easy, it requires long hours of research and huge capital investment in order to find the best investment property for maximum profit.

The 6 ways to invest in Property in Ghana

Real estate can be a valuable investment portfolio in Ghana. But how should you go about investing in property in Ghana? Here are the best ways real estate investors in Ghana operate the market to get higher ROIs.

1. Invest in Buy-To-Rehab 

People who are interested in real estate startups should start with this real estate strategy. This strategy involves buying old homes to rehabilitate them. The rehabilitation is done to increase the value of the property before putting it up for sale. You just have to do enough renovations to sell the property for the maximum amount.

You make money by buying reasonably priced properties as is and adding value by renovating the properties. To minimize the amount of effort in this strategy, look for homes that don’t need major renovations in serious defects like structural issues. This will even be more lucrative if you rent the property while waiting for home values to rise.

2. Invest in Rental Property

Rental properties can provide a high rate of return while also diversifying your portfolio and protecting you against downturns and other economic misfortunes. Investment property has the ability to kill two birds with one stone. 
 

Read Also: How much it will cost you to rent a house in Accra
 

In view of this, the income you receive from the property can be used to service the mortgage loan and also do maintenance on the property. In some instances when the rent is higher than your expenses, the property will generate a positive cash flow (profit). Real estate developers in Accra offer lucrative investment properties on the market. 

3. Invest in Commercial Real Estate Ghana

This comes with a different variation of rental property. Here you invest in commercial spaces like offices, retail shops, and warehousing. You may follow the same general pattern of rental properties but this is more complicated and expensive than investing in real estate rentals on the residential side of the market.

4. Invest in Serviced Lands

serviced lands mean lands that are not physically developed but are connected with the needed infrastructural services including road, drainage system, water and other basic human utilities.

The basic principle that land doesn't depreciate is the perfect strategy you can use to start your business in real estate. Buying and improving lands for sale is another sector you can invest in real estate in Ghana. 

You can eventually use the revenue generated from the sale of the lands to develop detached homes for sale. When you do this a couple of times your experience in real estate will begin to grow.

5. Buy REITs (Real Investment Trusts)

Instead of investing directly in real estate you can invest in REITs–Real Estate Investment Trusts where you have various real estate assets, from data centers and apartments to office buildings and single-family homes. REITs are companies that own commercial real estate and are often compared to mutual funds.  

Recently, the Ghana Security and Exchange Commission (SEC) issued investment guidelines on REITs for investors interested in trading Real Estate Investment Trusts on the Ghana Stock Exchange. REITs pay high dividends, which may be an opportunity for people looking for investment purposely for their retirement. 

6. Build to Rent

This strategy of real estate business is very common in Ghana. An investor builds rooms and rents them all out to tenants for monthly cash flows. Renting out rooms feels a lot more accessible than the fancy concept of real estate investing. 

For the vast majority of people searching for rooms in Accra, they prefer this system of housing to the expensive apartments developed in the rich neighborhoods like East Legon. Because this system is more affordable to the average Ghanaian whose daily income can’t afford an apartment.

In Accra if you've got a spare room, you can rent it out for extra income to take care of other maintenance costs.

Should you invest in a property in Ghana?

Buying real estate in Ghana has always been considered a good investment because of its ability to produce cash flows than shares. Generally, real estate maintains its value, even when other assets are on the decline.

Investing in a property in Ghana also has the potential for capital growth, meaning that its value increases over time and can also offer a steady income when leased out. 

However, before you begin investing you need to develop a personal property investment strategy. A strategy that details the amount of money you want to invest and the returns you expect to gain from buying real estate in Ghana.

Pros and Cons of investing in real estate in Ghana

Pros                                                                     

• Real estate provides regular income 

• and properties can appreciate

• Investing in property maximizes capital through leverage

• Many tax-deductible associated expenses and exemptions 

• Real estate Can offer quick returns

• Long-term cash flow 

Cons

• Managing tenants becomes tedious in rental properties

• High maintenance costs from damages by tenants

• High vacancies may reduce income

• Capital intensive (huge sums of money)

• Requires deeper feasibility study and market knowledge