When it comes to deciding where to put one's hard-earned money, investors like to settle on a type of investment that promises safety as well as good returns. One such investment is real estate. Investing your money in properties, especially in a good location, is usually a safe investment while making good money.  

 

Real estate investment in Ghana is currently considered one of the safest and most profitable investments that every investor can add to their investment portfolio to maintain a steady and regular cash flow. 

 

The industry offers some of the highest rental yields and capital appreciation we see on the continent and across the globe. And it has also proven to be a great way for investors to diversify their investment portfolios. 

 

But before making any real estate investment in Ghana, one needs to understand the industry, its trends, and the types of properties that are worth investing in. In this guide, we discuss all there is to know about real estate investing in Ghana and how you can make the most of your investment.

 

 

 

How To Invest In Real Estate In Ghana

Real estate investment in Ghana offers investors a chance to enjoy both a hands-on and a hands-off type of investment. Whether you want to be more involved in your investment or just want to set and forget while receiving your yields, you will find it in real estate investing.

 

 

Investing through a hands-on approach 

A hands-on approach to real estate investing has to do with any type of real estate investment that gets investors physically involved with managing their properties, unlike investments like bonds and stocks, where you aren’t physically involved. For instance, investing in rental properties and becoming a landlord, where you manage the property yourself, means you will be involved in activities like maintenance and collecting rent. Likewise, buying, let’s say, an old house and renovating it to sell also requires you to be more involved with the renovation process and getting a buyer for your property.

 

 

Investing through a hands-off approach

Alternatively, just like investing in stocks or bonds and sitting back to enjoy a hands-off investment, certain forms of real estate investment in Ghana also allow investors to enjoy a hands-off investment. For instance, when you invest in Real Estate Investment Trusts (REITs) or hand over your real estate properties to property managers to manage for you, you can have a hands-off investment where you aren’t physically involved with managing your investment. 

 

 

 

Which Real Estate Investment Is Best? Ways To Invest In Real Estate In Ghana

Determining which type of real estate investment in Ghana is best has a lot to do with the investor. Budget, investment preference (hands-on or hands-off), and risk tolerance of the investor all play a role in finding the best real estate investment in Ghana. There are several ways one can invest in real estate, all of which promise good yields as well as safety. Here are some of the real estate investment types:

 

 

Commercial Real Estate

Commercial real estate properties are the type of real estate properties purposely for business use. Commercial properties include office space, retail stores, warehouses, or malls. Commercial properties sometimes tend to yield higher returns, between 10% and 14%, compared to other forms of real estate investment in Ghana. When you invest in commercial properties, you make profits or returns by collecting monthly or yearly rents and you can manage the property yourself or engage the services of property managers or realtors to handle renting it out and collecting rents on your behalf. 

Commercial real estate requires a substantial amount of capital and the risk associated with this type of investment is usually low so long as you have a good location for your property.

 

 

junction mall accra, commercial real estate investment in Ghana
Junction Mall Accra, commercial real estate investment in Ghana

 

Residential Properties

Investing in residential properties could take three forms:

 

1. Large-scale residential properties

This form of real estate investment in Ghana requires a substantial amount of capital. Under this type of real estate investment, investors or real estate companies build houses, villas, and apartments to sell to homebuyers. Because it requires a large amount of capital, a group of investors can pool their resources and share the risk involved. 

 

The Gallery, real estate investment in Ghana
The Gallery by Clifton Homes- a large-scale real estate investment in Ghana


 

2. Small-scale residential properties

Alternatively, an investor can opt to acquire a few residential properties, either by building them themselves or by buying them from real estate developers to rent. You can acquire a few townhouses or apartments and rent them out for a steady passive income.

 

 

3. Short-term residential properties

Short-term rental properties can be a great way for investors to add real estate to their investment portfolios. An investor can start by acquiring a single house or apartment and renting it out on a short-term basis. It could be for days, weeks, or months. There are also resorts, hotels, guesthouses, etc, which are great forms of real estate investments. 

 

When investing in short-term residential properties, it’s very crucial to find a location that is close to tourist sites or prime and affluent neighbourhoods in Accra.

 

 

 

House-Flipping

If you are looking for short-term real estate investment in Ghana, then house-flipping is worth considering. House-filliping is a form of real estate investment where investors buy old houses,  devalued properties, or uncompleted houses, renovate them to add more value, and flip (sell) them for profits. This process, from renovation to finding a buyer, could take 6 months to a year and promises over 20% in returns. The risk that is mostly associated with this form of investment is that renovations could cost more than expected and it could also take a long time to find a buyer for the property once it's ready.

 

 

Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts, commonly known as REITs, are traded as shares on the stock market. They are a great way for first-time real estate investors or investors with limited capital to invest in real estate and gain some experience in the industry. REITs are usually considered a safe real estate investment option and the associated risk is quite low. However, investors should be mindful of the company they purchase REITs from because if the company performs badly or, worse, collapses, investors can lose their investment.

 

 

Crowdfunding

Crowdfunding in real estate is a type of investment that allows people to pull their resources in the form of fundraising to finance a particular project. Investors usually come together on a social app and contribute to fund a real estate project. This form of real estate investment is fairly new in Ghana, although it’s quite popular in other parts of the world. Cofundie is an example of a crowdfunding platform that investors are using to make real estate investments in Ghana.  

 

 

 

Serviced Lands and Land Speculation

Land speculation is when investors purchase a piece of land in an undeveloped area or rural area with a lot of real estate potential with the hope of reselling it to other real estate investors or developers in the future when the area starts to witness a building boom. This form of real estate investment in Ghana is a bit more risky since it's all based on speculation. How long it will take for the area to develop or if it will develop as the investor had hoped is unknown. 

 

Alternatively, real estate investors can acquire several acres of land in an already developing suburb, clear and level the land, and service it with good roads, electricity, and even water, then sell the plots to individuals. 

 

 

Should You Invest In Real Estate In Ghana?

The real estate industry in Ghana is currently booming. Ghana’s housing deficit of 1.8 million, rapid urbanisation, and growing middle-class population are some of the factors that are influencing this boom. There is consistent demand for over 80,000 housing units each year in the country and the industry also offers high rental yields and capital appreciation.

 

Investing in real estate in Ghana is a great way to diversify your investment portfolio and keep the passive income coming in steadily.

 

However, before making any investment decisions, you must weigh the pros and cons of this investment, assess your risk tolerance, and develop a strategy that helps you make the most of your investment.

 

 

Pros of Making Real Estate Investments in Ghana

  • Investing in real estate offers you a steady flow of passive income
  • Compared to other forms of investments, taxes charged on rental income tend to be lower
  • You can leverage real estate properties to double your initial investments. For instance, using your initial capital to make a down payment on a mortgage and using the rental yield to finish paying the mortgage
  • As prices of goods and services increase, you can also increase rents, thereby hedging against inflation
  • Real estate properties appreciate and they are also usually safer compared to other forms of investment

 

 

Cons of Making Real Estate Investments in Ghana

  • Real estate investment in Ghana can be quite capital-intensive 
  • Acquiring properties can be stressful since it takes time to perform due diligence, get the paperwork done and finalise the deal
  • Real estate properties are illiquid, meaning it takes a long time to get someone to buy the properties before converting your investment to cash
  • Value appreciation isn’t always guaranteed since real estate investment mostly depends on location to perform well

 

 

Best Real Estate Companies In Ghana To Invest With

Should you decide to invest in real estate, there are several successful real estate companies in Ghana currently contributing significantly to the real estate boom that the country is witnessing. Some of these companies build houses, apartments, and office space to sell to homeowners who are looking at investing in real estate in Ghana. These companies are regulated by the Ghana Real Estate Agency Council (REAC), a governing body that recognises legit real estate companies in the country.

 

 

Devtraco Plus Ghana

Devtraco Plus Ghana is a Ghanaian developer that specialises in building luxurious houses and apartments for sale. They offer real estate investors the opportunity to easily invest in residential luxury properties in prime areas of Accra that also promise high rental yields and capital appreciation. Their recent development, The Pelican Hotel Apartments, gives investors a chance to buy suites in the Pelican Building, which is a hotel, and rent them out for profits.

 

pelican hotel, real estate investment in ghana
Pelican Hotel Apartments by Devtraco Plus



 

SuCasa Properties

SuCasa Properties, also a Ghanaian real estate company, specialises in building luxurious yet affordable houses for sale in Accra. They have properties consisting of 3-4 bedroom townhouses in East Legon and Adenta, which are perfect for investors looking at buying a few family homes and renting them out for profits. 

 

 

Rehoboth Properties

Rehoboth Properties is mostly known in Ghana for its affordable housing projects. The company is best known for using green building techniques to cut down on building and utility costs while also improving the well-being of tenants. Rehoboth has several gated communities with townhouses and apartments for sale spread all over Accra.

 

 

VAAL Properties Ghana

VAAL is an internal company with operations in Egypt, Turkey, the UK, and Ghana. The company started operating in Ghana in 2015 and is currently working on its first two developments in the country. VAAL focuses on luxurious real estate properties that are perfect for investors looking to invest in high-end and modern homes that yield higher returns.

 

 

 

Clifton Homes

Clifton Homes is one of the fastest-growing real estate companies in the country, with over 10 gated communities in affluent neighbourhoods in Accra. They currently have a portfolio of over 500 luxury homes in neighbourhoods like East Legon, Airport Residential Area, and Cantonments. Clifton Homes also has a letting subsidiary company that helps their homebuyers manage their investments in case they want to rent them out.

 

 

Buena Vista Homes

Buena Vista Homes are real estate developers that combine modern home designs and luxurious interiors to create the perfect homes for homebuyers. With a current portfolio of over five gated communities in strategic areas, they offer homebuyers some of the most exquisite homes in Accra. Buena Vista Homes is perfect for investors who are looking to invest in short-term residential houses.

 

 

Read more on Real estate companies in Ghana

 

Marine Drive, Buena Vista
Marine Drive, Buena Vista Homes


 

Factors to Consider Before Making Real Estate Investment in Ghana

The type of real estate investment you make as an investor depends on your personal preferences. However, there are other factors that you need to consider before making an investment decision. Some of the most important factors to consider include:

 

 

Return On Investment

One of the obvious reasons people make investments is for returns—profits. How much of that you want to make as an investor will influence how much you must invest. Various types of real estate investment in Ghana all promise different returns. For instance, investing in commercial real estate usually requires a huge investment upfront but commercial properties are known to yield higher returns than residential properties. Office spaces, retail stores, or warehouses cost more when rented out compared to residential properties.

 

Likewise, investing in REITS might require less initial capital but they don’t yield as high returns as investing directly in a rental property would. Therefore, knowing the amount of money you want to make on your investment will help you choose the one that best delivers on your expectations.

 

 

Risk Involved

Just like all types of investments, real estate investments in Ghana come with risks. However, the various forms in which one can invest in real estate offer different risk levels. For example, land speculation is a riskier type of real estate investment since you will be making your investment decisions based on speculation. It might happen or it might not. 

 

Likewise, investing in REITs is less risky since there aren’t tangible assets involved. The risks associated with investing in REITs usually come from the company collapsing or mismanaging the funds of investors. Weighing the risks associated with the various forms of real estate investment can help you choose the investment you are most comfortable with.

 

 

Location of Property

Location plays a crucial role in a successful real estate investment in Ghana. Before investing in any type of real estate property, an investor must consider whether the location fits the purpose of the property. For example, when investing in residential properties and expecting to yield higher returns, you need to consider affluent neighbourhoods that are already developed and in proximity to basic amenities that make urban living comfortable. The location of your property is what will give it either a higher value or a lower one.

 

 

Key Takeaways on Real Estate Investment In Ghana

Ghana currently has an annual housing demand of 8,000 houses, which has contributed significantly to the boom of the real estate industry in the country over the last couple of years.

 

Real estate investment in Ghana promises good capital appreciation and high return yields of up to 25% on both commercial and residential properties.

 

There are several ways to invest in real estate in Ghana, including house-flipping, selling land, building houses to sell or rent, investing in commercial properties, REITS, and crowdfunding.

 

The form of investment that an investor will settle on usually depends on their investment preferences, but it is always crucial to consider the return on investment, the risk involved, and the location of the property before making any form of real estate investment in Ghana.

 

 

 


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