There are various ways to own property in Ghana. The most preferred by sellers is an outright cash payment for the property. However, only a handful of people have that capacity. Most people in Ghana are left with no choice but to go through the tedious process of acquiring land and building a house brick by brick. Some people contract special project managers to help them build a house to their specifications without the stress of daily monitoring.
For investors, building from scratch takes too much time and buying a home outright may just be beyond the capital available. That is where buying an old house in Ghana and renovating it comes into play.
There’s also the option of an off-plan purchase. Let’s examine both methods so you can make an informed decision about buying a house in Ghana as an investor.
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Buying Old Houses for Sale in Ghana
This is termed flipping in the US and UK where a person buys an old house and renovates it to fit modern market tastes and demands within the real estate industry. Ghana has a history of colonialism and as such has old buildings that date back to the early and mid 1900s.
You can identify these buildings from their old roofs to their thick walls. Some of these buildings are still very strong while others are falling apart.
Buying Off-Plan
When developers embark on a building project, they normally announce it and allow early investors or homeowners to put down an amount at a discounted rate. This is what it means to buy property off-plan.
Investors can invest in an off-plan project early and secure it at a better price than others who want to purchase when the project is ongoing or completed. You can find some of these deals on popular property sites or by subscribing to property-related newsletters.
Buying property off-plan is very common in Ghana and it’s one of the best ways to secure a property in Ghana. Let’s look at some of the pros and cons of each method.
Pros of Buying an Old House to Flip
1. Lower Purchase Price
Old houses are often priced lower than newly built ones, providing potential for a good deal.
2. Existing Infrastructure
Old houses come with established infrastructure like mature landscaping, which can be attractive to buyers. You can build upon the work that has already been done in the old house.
3. Character and Charm
Older homes may have unique architectural features and a sense of history that can appeal to certain buyers. If you are a fan of arched walkways and spiral staircases, then old houses can meet those desires.
4. Quicker Turnaround
The renovation and flipping process may be quicker than waiting for a new property to be built. You will be able to move in quicker meaning you start making your money back fast if you are an investor.
5. Established Neighbourhoods
Old houses are often located in well-established neighbourhoods with existing amenities, schools, and community services. You will find old houses for sale in Ghana within prime areas like Osu, Dansoman, Dzorwulu and others.
6. Historic Appeal
Some buyers appreciate the historical significance of some old homes. An example is homes that belonged to prominent people in the history of Ghana like Dr. Kwame Nkrumah, James Emman Kwegyir Aggrey, Sir Gordon Guggisberg etc.
7. Immediate Availability
Unlike off-plan properties, once you buy it you own it. No need to wait until it’s built like an off-plan property.
Cons of Buying an Old House to Flip
1. Hidden Issues
Older homes may have hidden problems such as outdated wiring, plumbing, or structural issues that can be expensive to fix. You will need a professional to identify some of these issues.
2. Renovation Costs
The cost of renovating an old house can sometimes exceed the initial purchase price, impacting potential profits.
3. Market Trends
The design and layout of an old house may not align with current market trends and preferences making it hard to sell to certain audiences.
4. Zoning and Code Issues
Older homes might not comply with current building codes and zoning regulations, leading to additional expenses and bureaucratic challenges.
5. Limited Warranty
Unlike new builds, old houses may not come with warranties for structural or system issues, putting the burden of repairs on the buyer.
6. Limited Utility Efficiency
Older homes may lack modern energy-efficient features or plumbing, leading to higher utility bills for the homeowner.
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Pros of Buying a Property Off-Plan
1. Customization
Buying off-plan often allows for customization in terms of finishes, layouts, and sometimes even floor plans. With Signum Development, this is a possibility.
2. New Construction
Everything in the property is new, which means fewer immediate maintenance concerns compared to an old house.
3. Potential for Value Appreciation
As the property is new, it may appreciate in value over time, especially if it’s in a developing or prime area.
4. Modern Features
New properties often come equipped with the latest technology and energy-efficient features. You are most likely to own an off-plan property with a fully fitted kitchen. Off-plan properties often come with contemporary amenities, such as smart home technology, modern appliances, and recreational facilities.
5. Potential for Discounts
Developers may offer pre-construction discounts or incentives to attract early buyers. A great opportunity for investors to increase their return on investment.
6. Payment Plans
Developers often provide flexible payment plans during the construction phase, making it easier for buyers to manage finances. Buyers get to select a payment plan that is convenient and doable.
Cons of Buying a Property Off-Plan
1. Delays
Construction projects can face delays due to unforeseen circumstances, weather, funding or regulatory issues, leading to a longer waiting period. More reason why it is important to work with experienced developers.
2. Unforeseen Changes
The final product may not exactly match the expectations, and changes may occur during the construction process. Make sure you are always being updated on the progress month on month.
3. Market Risks
If the property market faces a downturn during the construction period, the value of the property may not increase as expected. This is a common school of thought but during the COVID pandemic, there was rather an increase in the value of property in Ghana.
4. Limited Immediate Profit
Buying off-plan properties might not provide immediate returns as the property market may take time to appreciate. Having a good property management company handle your property can direct business to your investment regularly.
5. Market Saturation
In prime areas, there is a saturation of off-plan properties, potentially leading to increased competition and pricing. It’s more costly to own property in the prime areas and due to the saturated markets, it may also take a longer time to break even on your investment. That is one of the reasons why Signum Development has properties in both prime and developing areas where competition is lower and yields moderate.
6. Dependent on Developer Reputation
The success of an off-plan investment is highly dependent on the reputation and reliability of the developer. Signum Development has built close to 200 homes in Ghana since 2015. Signum Development is a trusted developer within the Ghanaian Real Estate market.
7. Lack of Immediate Cash Flow
It might take time before the property is completed and can be rented or sold, which can affect immediate cash flow. Off-plan properties normally take 2 years or more to complete. Locking your price down for the next 2 years is a great investment that keeps appreciating even while construction is ongoing.
Going through this list will help you decide whether you would want to buy an old house in Ghana and refurbish it or if you prefer to buy an Off-plan property instead. Each of the methods above has its merits and demerits but it’s a matter of perspective and situation. If you are in search of Off-plan properties then this beach view property with studios, 2 bedroom apartments or this stylish residential property of 1-3 bedroom apartments might be ideal. We know you will not regret it. Contact our sales team if you have any questions.
15th December 2023
6:30pm
The Function Junction, Tse Addo
