Real estate in Ghana per findings by SKB Journal is often portrayed as a robust market with high returns on investment. While the sector has shown significant growth and potential, prospective investors, homebuyers, and renters need to navigate the market with caution and a deep understanding of the realities on the ground. My name is Samuel Kwame Boadu, Founder at SamBoad Business Group Ltd and here’s my why you should look beyond the hype and consider these fundamental rules when entering the Ghanaian real estate market.
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1. Research Before You Invest
The real estate market in Ghana is saturated with both opportunities and pitfalls. Promotional materials and sales pitches can be enticing, painting a picture of infallible investment returns. However, due diligence is crucial. Potential investors should undertake comprehensive market research, including the current supply and demand dynamics, the credibility of developers, historical property price movements, and future urban planning developments. It’s also wise to consider the economic stability of the area, focusing on factors like local employment rates and infrastructure development.
2. Understand the Legal and Regulatory Framework
The legal aspects of buying, renting, or building in Ghana can be complex, particularly around land ownership rights. Land in Ghana is subject to different types of tenure systems, including customary, leasehold, and freehold. Each of these has its nuances, which can affect everything from ownership rights to the transferability of land. Therefore, it’s essential to verify land titles, understand the terms of any lease, and ensure compliance with local planning and building regulations. Engaging a reputable local attorney can help navigate these intricacies effectively.
3. Beware of Overvaluation
In a buoyant market, there’s always a risk of property overvaluation. Prices in hotspots like Accra and Kumasi can be inflated due to high demand, speculation, and the perceived prestige of owning property in prime locations. To avoid overpaying, compare the property prices of similar properties in the area. Consider hiring an independent appraiser to get an unbiased valuation before making a purchasing decision.
4. Consider the Quality of Construction
The excitement of buying a new property or the prospect of a significant return on investment can sometimes overshadow the essentials, such as the quality of construction. Ghana’s real estate sector has faced issues with buildings not being up to code or constructed with substandard materials. Before purchasing or renting, inspect the property thoroughly, possibly with the help of a trusted building expert or engineer, to ensure that it meets adequate building standards and safety codes.
5. Factor in Additional Costs
When calculating the cost of buying or building a property, consider all additional costs, which can include legal fees, registration fees, property taxes, and ongoing maintenance. For those looking to build, it’s essential to account for the potential rise in material costs, labor, and possible delays, which can inflate the budget significantly. Renters should also be mindful of hidden charges like service fees, security deposits, and utility bills, which can add up quickly.
Conclusion
While the Ghanaian real estate market does offer substantial opportunities, entering it without a thorough understanding can lead to significant financial risks. The hype surrounding quick gains in real estate can lead to rushed decisions, influenced more by market excitement than sound financial advice. By adhering to these foundational rules—conducting thorough research, understanding the legal landscape, assessing true property values, ensuring construction quality, and factoring in all related costs—you can make informed decisions that align with your long-term financial goals in Ghana’s real estate market.
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