Foreclosure: What is it; and Should You Consider Purchasing a Foreclosed Property in Ghana?
- 8 October, 2020
- Industry Trends
Foreclosure is a term you will normally hear in association with mortgages. A foreclosure, in Ghana, can mean good or…
Investing in real estate may be one of the best investments that anyone can make. However, knowing how and when to invest in real estate can make all the difference as to whether your investment will be a good or a terrible one. Investing in Ghanaian real estate will require knowledge of the real estate market, estate prices in Ghana and much more. Here are some useful bits of information that will be required to effectively invest in the Ghana real estate market.
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Make sure you have the necessary documentation whether you are a Ghanaian or a foreigner. Once you have the approved identification you can proceed to start investing in real estate in Ghana.
Having the right documentation opens up doors for you to work with the best within the housing market in Ghana. Make sure you deal with government-approved bodies such as the Lands Commission, the High Courts and the Ghana Real Estate Developers Association (GREDA).
Ghana is ripe for real estate investments so make sure you have all the necessary documentation to enable you to invest in Ghanaian real estate.
The laws in Ghana keep you safe when you purchase a property. Make sure that the purchase was done through all the right channels in order to secure your investment. Some properties have a build clause which requires the buyer to build on the land within a certain number of years or risk losing the land if it remains dormant past the specified period.
It is advisable to, at least, wall your property to prevent any misunderstandings in the future.
Apart from investing in land, you can also choose to purchase already completed houses that can serve as rental income properties. These are properties that you can own and lease out for a period. You will be receiving rental income from tenants that stay in the property.
It is advisable to buy such properties in principal areas such as East Legon, Cantonments, Labone, Osu, Tema and Oyarifa. You could list such property on Airbnb and other similar platforms to gain income.
You wouldn’t want to buy property in an area that has a low appreciation value. There are areas within Accra and Kumasi with an appreciation value of approximately 15% each year. Target areas within the city centres. If you are new to investing in the property market then you should consider properties on the outskirts of town, as major developments such as universities, airports and factories earmarked for certain areas will increase the appreciation rate of property within that area.
If you want to play it safe as a real estate investor, there are many real estate investment companies in Ghana that you can invest with. One of those companies is the Real Estate Investment Trust (REIT). In 1990 the government of Ghana established the Home Finance Company (HFC) with the objective to provide services and raise funds for real estate finance. This fund has grown over the years and has been a backbone to the financing of real estate in Ghana.
Real estate investment trusts (REITs) in Ghana started off with collective investment schemes, which are governed by the Securities Industry (Amendment) Law 2000 (Act 590) and regulated by the Securities and Exchange Commission (SEC). The Collective investment schemes can be either mutual funds or unit trusts. HFC REIT was launched by HFC in 1995, the same year, it was approved by the Bank of Ghana, acting for the SEC.
Investors in REIT have yielded great benefits from their investments. In 2015, the REIT returned a 24.3% yield to investors.
Unless you are a master of all trades there is no way you can go through the entire buying of land or property process in Ghana on your own. You need to have a strong team of lawyers and real estate experts that can help guide you in the right direction and save you the stress of any land litigation.
Working with a real estate company or developer is one of the most preferred routes for investors because these companies normally have a strong team that can do all the heavy lifting for you. A typical real estate firm will have a lawyer, surveyor, land valuer, engineer, accountant and a marketing department as well as years of experience within the industry in Ghana. Good partners can guide you on how to invest in Ghana.
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The topics above are important points to look at if you are interested in investing in real estate in Ghana. We have very useful resources to help you make the right investment when it comes to real estate. Kindly subscribe to the MeqasaTV Youtube Channel for informative videos on real estate in Ghana. Meqasa is the largest real estate website in Ghana with millions of views each month