Buying a house in Ghana is one of those things almost everyone dreams of doing. A house provides the basic need for shelter.
Among the options in getting a house includes buying or building your own house. Sometimes, it gets confusing whether to rent, buy or build a house in Ghana. The truth is, there is no straightforward answer. Your situation financially, and other factors can help you determine the path to take.
If you decide to buy a house in Ghana, this article is for you. Buying a house in Ghana comes with its challenges and risks.
However, if you want to avoid any risk, buying a house is the better option. This can be attributed to the risks associated with buying land and building your house. It is stressful and sometimes results in losing everything you put into the property.
Buying property, houses, or land is a complicated process in Ghana. Land can be owned by chiefs or traditional bodies, families, clans, government, and private individuals and organizations. Based on who you are buying from, it may require a different approach especially to ensure that you have all the necessary approvals to make your purchase valid. Void agreements can easily result in the loss of your property or having to pay twice the amount for the same property or land. The Lands Commission is responsible for managing government lands.
With that said, we will cover some of the things you need to know before buying a house in Ghana as well as the advantages and disadvantages of doing so.
Things to Consider Before Buying a House in Ghana
Are you Ready to Own a Home?
The truth is, you may want a house but can you own a house? It isn’t only about being able to afford to pay for the house.
Owning or living in your own house comes with certain responsibilities which you will have to attend to. Property rates and other fees become your responsibility once you own a house.
Maintenance costs of the house will fall on you as the owner, among other things constitute some of the reasons you might want to hold on to other options for now.
What Can you Currently Afford?
When buying a house, it is important to consider what you can afford. What you can afford may not be what you want. If you want to use other options such as a mortgage you need to have a solid revenue source. Mortgage providers will analyze your finances to understand the amount of debt you can afford.
Debt is something you should think about. You need to consider your current debt situation. And if you are considering a mortgage or other ways of financing your house, then you need to consider it even harder.
This is because without doing a proper analysis of the situation, understanding the implications of the debt instrument to your future, you may end up having to sell your house again to defray your debts or lose your house to the financing bank or company.
What’s the Purpose of the House?
It may be your dream to buy a house, but it helps to have a reason. It may be that your family size requires that you have a dedicated home to settle in. You could also have recently married and want a place to move in. Another purpose could be a house for rent. Lots of houses are for rental purposes.
The good thing about having a clear purpose for your house is that you can make good decisions that wouldn’t affect you in the long run. You can have a house which doesn’t meet your needs. Knowing the purpose helps you prevent such a situation.
What Kind of Home Will Suit Your Current Status
As you go out to buy, you need to know what you want. Without a good understanding of your needs, you may end up with a property you don’t need yet you have to maintain constantly.
Know Your Financing Options
The popular option is often to self-finance the purchase of the house. However, there are bank loans and mortgages to assist you.
The truth is, most people see mortgages and loans as only debts. They fail to realize that when used well, these debts can become systems to create wealth.
Mortgages used to pay for rental properties can quickly become a passive income source without having to put a lot of your own money into it.
You don’t have to buy a House
One of the most important things to keep in mind when thinking about buying a house in Ghana is that you do not necessarily need to buy a house. You may want to, but not need to. This is because the primary reason for having a house is for shelter. All other reasons are secondary.
In line with this thinking, you don’t need to see buying a house as a must to satisfy your need for shelter. Renting a place is equally helpful in meeting that need.
Taking this into consideration will enable you to approach it with the idea that it isn’t a must. You can take your time to find what suits your needs. A house is a long-term decision which should be carefully planned.
Look Beyond the Purchase Price
When buying a house, features, and facilities aside, most people consider the price. As much as that isn’t a bad thing, most people fixate on it almost to a fault.
For instance, you could buy a house for cheap but it comes at a high repair and maintenance cost which beats the purpose of focusing on price in the first place.
Work with a Contract/Documentation
Documentation is something that you need to be careful about when making any transaction. Buying a house is a big deal and involves a lot of money, time, and effort. Without ensuring that all the right paperwork is done, you can easily lose your rights. That is a situation you do not want to end up in.
Work with a Licensed Real Estate Agency (Agent/Realtor)
The best way to buy a house is to buy from a real estate developer. If you cannot buy from a developer, your next option should be to work with a real estate company that has a good reputation.
Finding licensed real estate agents and realtors isn’t very common. Whatever you choose, make sure you build a concrete understanding of the situation, your options, and who you can trust to work with.
Mortgage companies and banks will sometimes have their licensed partners to help you.
What You Need to Know as a Foreigner Who Wants to Buy a House in Ghana
- You can own property; houses and land.
- You can only own land for up to 50 years lease.
- To engage in real estate as an investor, the Ghana investment promotion center (GIPC) is the right authority to get information and permissions/licenses.
- You should work with a licensed real estate broker or realtor. Better still, work with a company with a good reputation. The easiest way to buy a house in Ghana as an ex-pat is to buy from a real estate developer in a gated community. You are assured of basic services and facilities. Security is also something a gated community gives you.
Advantages of Buying a House in Ghana
- Hassle-Free, Move-in Straight away
When you buy a house, it’s most likely going to be a finished or partly built property else it won’t be a house.
The good thing is, in both cases, someone else has already worked through the land issues, started building, leaving you to complete it.
When everything about the house is completed, all you need to do is literally move in. You can find a house that meets your needs such as uncompleted, finished, furnished, and semi-furnished. These are all the states of houses you can buy in Ghana.
- Something you can call YOURS
The pride that comes with the accomplishment of being able to pay for a house and move in when you want to is a really good feeling.
Having a house you can always come back to at any time of the day without having to think about rent, or landlord is something we all at some point want to have.
It starts with making the decision and talking to people and organizations who can help you.
- Real Estate Appreciate Quite well over time
Historically, real estate appreciates over time. This means if your house is well maintained and in good shape, you can sell it later for a higher price.
You can also use it as a revenue system by renting some rooms out or the entire house out which brings you consistent monthly income.
Most landlords even go ahead to take fees for years in advance. That’s a hefty amount you can use for other investments.
- Tax Benefits
There are certain tax incentives for people who go for certain options of financing such as mortgages.
Disadvantages of Buying a House in Ghana
- Upfront Cost is High
Perhaps the one thing which scares people from buying houses is the hefty upfront cost in buying.
Also, most people doubt the benefits of financing options such as loans and mortgages. This leaves them with the option of using years to build their house.
However, while their money is locked up in the uncompleted house, they could have been earning some interest on their money. It all depends on how you approach it.
People get to live in their dream homes through mortgages that they were able to pay off. Look at your situation and decide what is best for you as a person.
- You Become Bound to The Location
Location is a huge factor when it comes to a lot of things, access in some way is bound to a location.
Your location determines the kind of environment you live in, it determines your neighbors, schools your kids attend, the facilities you can easily access, and so much more.
Once you buy a house in a location, you become bound to these things which could be a good thing or a bad thing.
- It Could Depreciate
As much as properties do not depreciate often, it happens. And when it happens, it could be disastrous when you find out that your property is worth less than when you bought it.
- You are Responsible for Property Rates and Maintenance
Owning a property isn’t without its responsibilities. You have to pay the necessary rates for owning a house. You also have to take care of your house. You can no longer afford to treat your house anyhow.
Buying a house in Ghana is probably easiest when you have industry knowledge. Industry knowledge in the sense that you know your options, financing mediums, the norms, and related risks. If you are in doubt, confirm (know for sure) before making any financial commitments. Work with a lawyer and a real estate agent to be sure you are doing the right thing. There are lots of property-related cases in court. You do not want yours to be the latest case. If you are considering buying a house, know that it’s a personal decision. However, you can always window shop and compare prices on Tonaton.com – Ghana’s Largest Marketplace.
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