Rent or Own: The Pros and Cons

People interested in obtaining property in Accra have two primary options: renting and owning. Like in any market, both present benefits and challenges. However in Accra, a variety of factors, including cost, availability, and location, impact renters and buyers differently. Ultimately, acknowledging these factors and individual preferences will help identify the pros and cons of both options.

According to our 2014 annual report, The State of Real Estate in Ghana, only 13% of Ghanaian adults own houses, whereas 60% can afford to rent. At least 13% of the population can afford neither, reflective of a clear need for more affordable housing options. Current estimates put the national housing deficit at 1.7 million units, representing both a major opportunity for investors in houses in Ghana, but also a major challenge for lower- and middle-income buyers.

Renting a Residence in Accra

Accra contains many neighborhoods that offer a variety of condominiums and traditional flats for rental, often to expatriates. Advantages of renting include:

Highly negotiable rent prices
More flexibility in the duration of one’s stay
Having a contingency for failure to qualify for a home loan
No individual responsibility to arrange security or building maintenance
In Accra, particular challenges exist in the rental market, including:

Difficulty finding apartments available for short-term stays, let alone affordable ones
Requests from landlords to pay between one to three years of rent in cash up front, or to commit to a contract of this length
Potential eviction by the landlord on short notice should he or she demonstrate immediate need for personal or family use (the Rent Act of 1963 does mandate, however, that some time be given for evictees to secure new housing)
8% tax on income generated from collecting rent
Buying a Residence in Accra

Buying residential property in Accra remains a worthwhile investment. The robust property market has attracted not only expatriates and foreign investors, but also repatriated Ghanaians and middle- to high-income citizens of the country. Buying property in Accra has its share of advantages, including:

A chance to realize robust returns on investment in a growing market (our 2014 report put the annual growth rate of the Ghanaian real estate sector at 11%)
Low property tax rates
A national housing deficit that puts home ownership at a high premium
A variety of locations, property styles, and amenities from which to choose
Highly negotiable prices
Ability to establish a long-term base and account for the tastes and preferences of one’s family Nonetheless, the market poses significant challenges, particularly related to pricing, access to capital, and macroeconomic policy, including:

High costs of buying property
Sellers and agents heavy emphasis on the narrow luxury and ultra high-end sector of the market, often at the expense of affordable housing for middle-income buyers
Extremely high mortgage interest rates that are unfavorable to most buyers
Long-term commitment, financial and otherwise, to the property

Source : house.jumia.com.gh