How Much Does It Cost Renting A House in Accra-Ghana

Renting a house in Ghana becomes relevant not only when you don’t have the adequate down payment to secure a mortgage but also when you know the number of years you plan to live in a particular location. Whenever you have to make a decision involving money, there is always a lot of pressure. So renting a house is no exception, which is a very stressful process, especially since there are a lot of moving parts and significant financial repercussions if you make a mistake.

Why Rent a House in Ghana When You can Own

The decision to rent a home in Ghana or buy is purely a personal decision. However, that personal decision should be guided by certain benchmarks when searching for a place to lay your head. I wouldn't purchase a home until I am sure I would be living in the area for a very long time. 

Sometimes people conclude that renting a home in Ghana is cheaper than buying. This perception is just on the face of the market. However, people, in general, tend to compare only the rental payments to the mortgage, while ignoring many hidden costs.

In other instances, it's completely true because people tend to ignore the effects of depreciation when they buy things. Almost everything you buy and put in a house loses money as they get old. They might go for a new granite top for the kitchen justifying that as a capital asset when it might turn out to be a depreciating asset. These are some of the many reasons why renting can be cheaper than buying:

1. When you own a home in Ghana, you tend to spend more time doing maintenance and improvements. These are nice pastimes or an expensive cost given how many other things one could do in their life. People tend to underestimate the cost of doing improvements and redecorations.

2. Buying a home in Ghana comes with a huge transaction cost. You might be paying nearly 20 percent of the price in hidden costs to the broker, mortgagor, Attorney, and the cost of the seller in keeping the house vacant for months. This will take years to simply get back the money you originally put in. Rental transaction costs are substantially lower.

3. Renting a home in Ghana converts capital expenses to operational expenses, and could be quite capital-efficient at a time of life when you have other promising avenues to invest money and time.

4. Renting a home in Ghana provides you with the flexibility of space and there is a price for flexibility. You can go into a bigger home when you have extra children and move back into a smaller home when the kids graduate or when times are tough. 

5. Renting a home also provides you with the flexibility of location. Given the fast-changing economic conditions, you might find a job that requires you to move to a different location. In that case, either you have to sell your house and make a costly move or be forced to take lower salaries.

Costs Associated With Renting A Home in Ghana

Renting a home in Ghana is a little bit different from any other part of the world. Very often you hear people asking how much money do I need to rent a home or apartment in Ghana. The amount you pay for rent depends on the location you want to live in. Do you plan to live in a rich neighbourhood, high earned, middle income or lower earned neighbourhood? Finding answers to these questions will help you search for your desired home in Ghana.

Average cost of renting a home in Ghana

The prices of homes in Ghana fluctuate with the local economy and which also directly affects the price tenants will have to pay in exchange for the rights to use a commercial space for a specific period of time. It is reported by Numbeo that the rent in Ghana, on average, is 50.88% lower than in the United States. This means rent is comparatively lower in Ghana than in the U.S.

Knowing the average cost of rent payable at a particular locality will aid to circumvent an elevated amount of rent you may be asked to pay. In Accra, Numbeo reports that the average rent for an apartment (1 bedroom) within the city centre is $749.68 while outside the city centre, rent is averaging $94.47, again depending on the location.

Also, the average rental value per annum in Accra for a (3 bedroom) apartment within the city centre is $2004.65 and outside the city centre averages $349.97 in the nation's capital city.

What is the price to rent ratio in Accra?

Understanding the price to rent ratio of a neighbourhood you are planning to live in is very crucial. Yes, the price to rent ratio is a tool real estate rental investors used to illustrate the behaviour in any market. However, it is equally important for home hunters to determine whether to rent or buy, in particular, the real estate market.

The price to rent ratio is a tool that property investors use to potentially tell where the demand for a rental property in a given real estate market will skew towards. This is determined by dividing the median home price by the median annual rent in any market. 

The price to rent ratio in Accra especially, within the centre of the city is 8.79. The figure is relatively lower than when you move further away from the city. The price to rent ratio outside the city centre is 281.30. So clearly, in this current statistics from the market, it will be more economically sensible to rent than buy within the city centre. The opposite is the same for people looking for homes outside the city centre.

However, the price to rent ratio principle does not take into consideration certain other factors, such as how long you plan to live in a particular location. But all in all, this is a strong tool to guide your search for a home in Ghana.

Moving cost estimations

You shouldn’t underestimate the cost associated with moving to your new home. Homeowners who are moving to their new homes also have to incur moving costs, and sometimes you may have to do it on your own instead of hiring movers.

Tips on Renting a House in Accra

• Always work with a registered agent in Accra to avoid being a scam

• Make sure to take a receipt from your landlord or the license agent when you make any monetary payment. This will help you make a case should there be any problems.

• You may be asked to pay a minimum of 12 months' rent advance before you move in. The actual amount will depend on your landlord and your written agreement.

• Always read the terms and conditions of the tenancy agreement document before you agree to sign the contract.

• It’s not the normal practice in Ghana but in case the landlord asks you to pay a tenancy deposit ensure that the amount is not more than a month’s rent. In any case, you will get your deposit back when you move out of the property without damages to the property.