Tag: houses in accra

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Career

Treasury Bills Are For Every Investor, Not Just The Risk Averse

Treasury bills are theoretically risk-free investments. Many people, investors and even those who are not investing, view treasury bills as an asset for investors who are risk-averse, primarily because of its low or no risk and corresponding low returns.

However, it is worth noting that in some economies like Ghana, treasury bills rates can get as high as 25% whereas some risky investments return way less. Theoretically incorrect, but this is the real world of investment. The 10-year average return on the Ghana Stock Exchange is few basis points lower than the average return on the 1year note within the same period. In 2015 the Ghana stock market (GSE-CI)returned -11.77% whereas the 1year note averaged about 22.75%. Whether treasury bills return higher or lower interest to investors, it certainly provides more to an investment portfolio than just the level of returns.

  1. Balanced investment

Rather than putting all your money in high-risk investments for an expected high returns, you can lower the risk on your total investments by investing a portion, not all, of your money in ‘risk-free’ investments such as treasury bills. What this means is that even if you lose all your money you have put in other risky investments, you have the treasury bills to fall back on. For instance, some financial institutions, beyond regulatory requirements, invest millions of deposits and shareholders’ funds in treasury bills to partly offset the large risks they take through other investments such as loans and trading.

  1. Attractive returns

Treasury bills can be your only investment if you wish so, though I wouldn’t advise that. In countries like Ghana, Nigeria and Kenya with relatively high interest rates, some people choose to invest in treasury bills alone. Take Ghana for instance, you are likely to double your principal investment in less than 4 years if you invest in treasury bills at current rates (around 22%)and rates remain around current levels for another 4 years –which is possible. This you can do by just handing your money to the government by buying treasury bills through your bank or brokerage firm. In countries where the yields on government securities are high, you can take advantage of it and make some decent returns while you sleep, rather than risking your money for returns just about the same as those of treasury bills rates.

  1. Safety of Investment

Many people are concerned about the fear of losing their money when it comes to investing. I’ve met so many. The first thing they ask is “will I get my money back, and how soon?” While these are legitimate questions every investor should be asking first, it is also important to know that investments are risky and it’s up to the investor to choose the risks that he or she can comfortably manage. For those who are not ready to take risk with their money, there are many options for you –and one of them is treasury bills. Your money is safe with the government of the day. You’ll get your principal in full plus the expected returns. Governments rarely default in their own currency.

Treasury bills are not for the one afraid to take risks with their money alone. They are for every class of investor – the risk-loving and the risk-averse

 

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Career

Should You Invest In Transport Or Real Estate? 5 Things To Know

Not a simple decision when it comes to choosing which investment is worth your money. First time investors and seasoned and sophisticated investors alike, have similar challenges when it comes to the choice of investment. People have various methods of comparing one investment to another. Even professional investment analysts have varying methods. Transportation and real estate business are two of hot investments in Ghana and here are some simple guidelines for comparing them

  1. Payback Period

Commercial transportation in Ghana (mainly taxi and trotro) is one that many fail to see its profit potential. It is very profitable if managed well –like many other businesses. Taxis and trotro (mini-van commercial transport) repay their invested capital usually in less than 2years. Real estate on the other hand takes about 6years to recoup investment if rented. Real estate sold outright however takes an average of 3years (construction and sale period included) to recoup investment.

  1. Risk

Real estate carries lower risk than transportation business. However, to enjoy the comparatively lower risk, investors must do proper due diligence before putting in their first dollar or cedi, as the industry in Ghana is characterized by litigation, and regulatory requirements that must be duly followed. Location is very important. Consult an industry expert when it comes to which locations to invest in properties for maximum returns in short periods. Some real estate developers in Ghana have erected properties in areas where their millions are locked up in unoccupied properties, not even getting prospects to come and inspect. Transportation on the other hand carries high risk. Bad roads, car snatching, careless driving, flooding, are some of the risks you’re exposed to in the industry. Your vehicle could last only a month on the road, if you’re unlucky. However, insurance products abound in the country to help investors mitigate most of these risks. Both are not liquid investments; however vehicles provide better liquidity in Ghana than buildings.

  1. Returns

Real estate returns an average of 200% on sold properties. Amazing and tempting, but its true especially when your properties are located in prime areas. For rental properties, about 20% is expected in a year but again, the location could move the figure higher or lower. Transportation business in Ghana is quite simple and returns are easy to compute. Taxis and Trotro take about 18months to return 100% of the invested amount. The revenues are usually predictable and stable over a period, only fluctuating with changes in fuel price.

  1. Competition and Threat of Entrants

Commercial transport business in Ghana isn’t a difficult-to-enter industry. Once you buy a vehicle and follow due process (quite an easy process that can be completed in 2days), you are in business. For this reason, there are many investors in the industry –individuals and corporate entities. Services are quite homogenous, except for Uber which recently begun operations in Accra with a superior technology and pricing. Despite the thousands of vehicles on the roads of major cities, competition doesn’t seem so fierce. Ironically, real estate industry in Ghana has comparatively fewer players and higher entry barrier, yet competition among these few players is high –fierce and challenging. You always need to do more to make a sale, especially if you’re not strategically located.

  1. Residual Value

An important feature to look at in these two businesses is how much your investment is worth at the end of an anticipated period of time. The value of vehicles in Ghana and almost every other place I know, generally decrease over time. Wear and tear alone is sufficient reason for the value of your commercial vehicle to be halved after 2years on the roads of Ghana. Commercial vehicles usually are in good condition for 4 years, after which the cost of repairs and maintenance could equal or even exceed its revenue. At this stage you could sell your vehicle for about half of the cost of acquisition. However, well-kept cars could fetch the same price they were acquired for. Real estate on the other hand keeps rising in value. Each year the cost of buildings in Ghana goes up. Most properties are priced in US dollars and the depreciation of the cedi in itself is an implicit rise in the value of dollar-priced properties. Real estate properties have rising residual values. No matter how old the property is, it’s sure to fetch you more than the cost of putting it up.

These guidelines are not exhaustive but they should guide you to make a preliminary assessment of where to put your money.

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Career

Will you Build or Buy your Dream House ?

The decision to buy or build a house is a big one, but only if you do not read this article to the end. Many dream of owning a house but are confronted with either buying it or building it. Either way you can take a mortgage to fund it.

Price

In Ghana residential properties are usually sold at double the cost of putting it up, at least, especially the real estate developers. On the other hand, there are so many problems associated with building it on your own such as land litigation, building permit issues, theft of materials among others. However, barring such problems, which can be solved, building your own house is cheaper. About half-price.

Litigation

To avoid litigation and its related burdens of moving in and outs of law courts, people prefer to pay a premium to acquire a ready-to-move-in house. That’s okay if there are no financial constraints. However, if you’re not ready to pay double the cost of the building then I urge you to consider acquiring litigation free land to put up a decent structure for yourself.

Lump Sum

You may not have the lump sum of money required to pay for a house outright and you may likely not qualify for a mortgage to fund it. It is therefore prudent to begin building your house gradually with what you have. Pause and resume construction on gradual basis. No matter how long it takes, you’ll complete it one day.

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Quality

I have seen residential properties constructed by many real estate developers and the quality is not something I can boast of. Why would you pay double the cost for a poorly constructed property, only to spend about half the amount in five years time on renovation? That’s why I advise friends to build it themselves, where they can monitor the development on regular basis and choose materials themselves or with the help of an expert.

Mortgage

People jump at mortgages to finance their homes. They spend 15 years repaying the mortgage and interest. If you are not in a hurry to own the house and you can invest your funds at rates higher than the mortgage rate I urge you to do so towards building your house. A steady periodic contribution will be helpful.

In summary, I will say, due to the poor quality and high price of residential properties in Ghana, I advise building one yourself whether you have the funds immediately or not. If you would qualify for a mortgage, negotiate with the provider so you can use it to build your own. Usually this would happen only after you have started building, then you can request for a mortgage to complete the uncompleted property.

I hope these simplistic considerations will guide you in your make-or-buy decision, at the individual level. Drop a comment or contact me for further clarifications

 

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Career

Buy your Real Estate Properties from the Right Companies

If you’re buying properties in Ghana, there is a chance you may come across many sellers. Not all of these sellers are there to sell you properties. Some are in to take your money and disappear.

They walk around with you and show you several properties across the length and breadth of the city, but they disappear the moment you make payment to them.

It is therefore important you know who you’re buying from. In Ghana for instance, there is a 25year old body of real estate developers called Ghana Real Estate Developers Association that regulates and speaks on behalf of the real estate developers. The GREDA is one body you can trust. It’s the country’s leading organised body of real estate developers that people can trust. It’s members include real estate companies in Ghana that serve different segments of the market in different locations across the country.

The members of GREDA are expected be act professionally in line with their ethical and professional standards. Buyers would be able to do business with them based on mutual trust, as there is a mother body you can report unprofessional behaviour to, and be assured that it will be addressed accordingly.

It is advisable to go through the list of GREDA members whenever you’re dealing with anybody that purports itself as a real estate company in Ghana. This is not to suggest that non-members are not legitimate business entities but being a member gives buyers additional comfort and reliability.

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Business featured

How to Start a Real Estate Business in Ghana

Real estate has become one of the profitable industries in the country over the past decade. We could attribute this to rising demand for real estate partly emanating from a growing middle class and foreign visitors from neighboring countries and afar, who usually have long stays in the country.

In Ghana, real estate returns at least 50% in the local currency to investors if the property is sold outright. Returns in some cases are as high as 200%.
Real estate in Ghana is primarily characterized by acquisition and sale of land, build & sell, renting and leasing, buy & improve & sell, and many more forms. The fast growing ones include erection of apartments for sale and/or lease and acquisition of land for development of gated community properties for sale.

Landed properties usually have very long lives and can serve as a generational business and also as collateral for loans if found in the right location.
Location is a very important factor in the real estate business and in most cases, the single most important factor. In Ghana, major cities represent the best locations. Takordi, Kumasi, Tema and Accra expectedly provide the best value for your landed properties in terms of location.
One of such hot spots in Accra is examined in this article and presented for investors to consider. You can go to the opportunity section to continue reading on this property.

OPERATIONS

In order to reap the full benefits inherent in this business you need to make some choices upfront when buying properties. The real estate business in the country requires careful examination of all documents related to a sale of property and appropriate due diligence.

It is important therefore to conduct a full search at appropriate agencies to satisfy yourself that the property you are investing in is rightfully owned by the seller, unencumbered, and the seller has a legitimate right to sell it. The examination must include physical inspection of property to make sure it is not badly damaged, or that it may not incur you unnecessarily burdensome expenses in the near future such as refilling of site and material repairs or even the need to pull down the property and rebuild it.

Property acquisition is therefore a very important step in the business and must be treated with appropriate professional advice and caution.
Some properties require way too much time and management to make them profitable investments. Out-of-town vacation rentals, low quality commercial buildings in bad areas, long collection of chamber and halls and single rooms are some examples.

Nice properties located in good areas rented for as long as possible to decent creditworthy tenants either for residential or commercial use are among properties that require least management.
To make good returns on your real estate investment, selecting appropriate marketing strategy becomes important. Target your marketing efforts to only people who can and are able to buy or rent your property and do not waste time on those who cannot.

OPPORTUNITY

A parcel of land lies in a prime area in Accra which is available for sale at the moment. The land which measures 92 x 125 ft lies right behind the wall of the plush Trasacco Valley estates at Adjiringanor, and also has King’s cottage to the east, another gated bourgeois community.

This property can be used for two 4-bedroom storey buildings or one 5-bedroom storey building with ample space around it or can even be used for three 3-bedroom houses.

Demand for properties in this area is high as evidenced by the comparatively high property prices. The area already has electricity, roads, water and other completed houses, most of which are storey buildings.
When you buy property, you are diverting money from your liquid assets such as stocks, bonds, term deposits etc., and investing into very illiquid assets – real estate. For this reason, the property must be one that will give you good returns and can be quickly sold.
A financial summary of the investment is presented below. The figures here are presented in US$.

Outright Sale

Property Land Est. Cost of Building Total Cost Est. Sales value Profit % Return
5-bedroom 116,000 110,000 226,000 395,000 169,000 74.78%
Two 4-bedroom 116,000 200,000 316,000 550,000 234,000 74.05%
Three 3-bedroom 116,000 250,000 366,000 660,000 294,000 80.33%

Lease

Property Land Est. Cost of Building Total Cost Est. Annual Income Annual Return
5-bedroom 116,000 110,000 226,000 48,000 21.24%
Two 4-bedroom 116,000 200,000 316,000 72,000 22.78%
Three 3-bedroom 116,000 250,000 366,000 72,000 19.67%
These are only estimates based on certain assumptions. All profits are pretax profits. All amounts are in US$

RISKS AND CHALLENGES

A major risk associated with real estate investment is liquidity. Properties are not easily convertible to cash, unlike financial assets. However, depending on the property type, location and your marketing efforts, a property can be converted into cash within a short period.

Summary

Investment sector: Real Estate
Tenor: 1 year for outright sale; 25 years for renting.
Expected Return: 75% for outright sale; 21% per annum for rent.
Payback Period: 1 year for outright sale; 5years for rent/lease.
Risk: Low
Liquidity: Low
Attention required: Medium
…We are better placed to assist you. contact us now

Or Apply for the digital guide on how to start this business successfully. Business Contact

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Career

Accra’s Accommodation Ordeal Before National Service

National service accomodation
National service accomodation

Accommodation in the capital of Ghana isn’t just expensive but hard to find too, Kwaku lamented. Kwaku is a fresh graduate who had to move to the city for his national service program, a required 9-12 months of work that introduces you to corporate Ghana.

The national service period is a very important time in the life of fresh graduates in Ghana, as it does not only equip them with their first working skills and experiences but also a platform to launch a lifelong career. Kwaku, like many graduates, was excited to be posted to Accra, even though he has lived outside the capital and has no one to stay with during his national service period. The city offers much more opportunities in corporate Ghana than any other part. But first, he must get a place to lay his head.

Accommodation Options In Accra.

Accra presents vast accommodation options to its inhabitants; single rooms, two bedrooms, three bedrooms, executive four and five bedroom houses, apartment buildings, and many more. Kwaku’s options are basically two: buy a house or rent a room. Not many fresh graduates around the globe can afford buying a house or taking a mortgage. So the obvious option is to rent a room in Accra.

If you have ever rented accommodation in Accra, you would know that often, there are middlemen involved in the search, negotiation and payment for the rented room. Apartments in Accra are expensive and even beyond the budgets of most middle-level managers of comparatively well-paying business and non-business organizations in Ghana. Kwaku knew his only option: to rent a single room in a not-too-busy parts of Accra, but close enough to his workplace in order to save on transportation fares within the city of Accra, which may be expensive for a fresh graduate. The presence of Uber in Ghana is expected to ease movement within Accra.

The Search For A Room To Rent

Kwaku nearly ended with nothing, having spent about GHc700 moving around in taxis across the length and breadth of Accra in search of decent single room to rent. Agent fees, ridiculous taxi fares (there was no Uber in Accra at the time), agents’ feeding, door-opening fees are some of the costs incurred by Kwaku in the process of looking for a single room accommodation in Accra. As an educated young man he took to the internet in frustration, using online real estate listing platforms like tonaton, olx, and real estate marketplaces like meqasa.

Fortunately he found so many properties to choose from, but then again, there’s the need to contact the people who listed the properties and arrange to inspect the property. Some of the people were actually real estate agents (middlemen) who still operated on the same terms they do if you don’t use the web. Kwaku ended spending additional GHc300 in the process but was happy with the properties he saw. He saw single rooms for rent ranging from GHc120 to GHc600.

The Choice

Having considered several factors such as shared facilities, proximity to his new job, noise level in the neighbourhood and price, he rented a single-room at GHc250 per month, and paid the ‘usual’ two years advance demanded by many landlords in Ghana.

Activities of real estate companies in Ghana and both offline and online real estate intermediaries can go a long way to improve accommodation prices and minimize the cost of the search for buildings in Accra and other parts of the country, whether for renting, leasing, cash purchase or mortgaged. Part of Kwaku’s ordeal could actually be avoided if we learn to use available online intermediaries such as tonaton, olx and meqasa for the searches, only to do physical verification after satisfactory online scrutiny.

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Career

How to Pay Less for the Property you want to Rent or Buy

The housing deficit in Ghana and most African countries such as Nigeria, Africa’s most populous nation makes it seemingly difficult to get a good real estate deal. There housing deficit in Ghana is estimated at 1.7million units and 17million in Nigeria. By the economic rule of demand and supply, the real estate market is expected to be a seller’s market, leading to an upward direction of real estate prices and rents. Activities of stakeholders on the ground show growing investment in the sector but not too convincing to see the deficit bridged within the next 5 to 10 years.

If you are paying for accommodation in Accra or most sub-Saharan African cities, it is likely your rent would shoot up after each period. Here are some suggestions on how to get good deals in the real estate industry

Search Everywhere

There are very good real estate deals in town, if only you search diligently. Often after seeing just three buildings, we want to make a choice quickly among the three so we can make payment before someone else snatches the property. I say don’t rush to make a choice. If you’re interested in a property you have seen, do express your interest but tell the owner or agent to give you another 5 days to make up your mind and come back. This should be acceptable to many property owners. What you do within the period is to look everywhere for more properties. Don’t make a decision until you have seen at least 10 properties of the type and location you want. To make your search easier, you can use online real estate marketplaces such as meqasa, and others like Tonaton and Olx.

Don’t Always Believe Sellers and Agents

Property owners and real estate agents often hype their properties; their features, location, price and facilities. You may be disappointed if you believe everything they say without checking for yourself. They tell you there are other buyers (or prospective tenants) ready to pay even if you’re the first. They tell you it’s the best deal you can get but it’s not. Your job is to find out for yourself, and not believe them wholly; else you would end up paying so high for the hype -only to regret after few months.

Always Push sellers for a Bargain

Due to the fact that the region has a large housing deficit, there is a growing perception that if you see a property and do not hurriedly show commitment to buy or rent, somebody else would snatch it. Many people do not push property owners to reduce the rent or the property price because they’re told another buyer is ready to pay the quoted price. That’s mostly false. If it were true, the property would be off the market. It is still available because no one has been interested in it over the period. Find out how long the building has been available on the market, and then you would know the level interest in it and how much bargain you can push for. Usually, aggressively advertised properties are easier to get the prices down. Push and push until seller is not ready to sell or rent the house at your price.

Don’t Make full Payment, yet

Many property buyers are in a hurry to make full payment for their new found home. Relax. Work through the figures and make a counter offer that favours your finances. Why make full payment now if you could spread the payments over a period of say three months or six or even twelve. For instance, when buying a property in Ghana, often you can suggest a payment option that suits your pocket and leaves you in a better financial position than the one offered by the seller. Try to explore such opportunities. Keeping your money can earn you some interest over the stretched payment period.

Show no Eagerness

Real estate owners and seller are just like sellers of any other product. They observe your eagerness and willingness to own or live in the property, and take a position in the negotiation accordingly. If you show them that you’re dying to live in their property, you only empower them to take a firm stand in the negotiation, which often costs you a few more dollars. A few more dollars you could easily wipe off the building price or rent if you show a certain level indifference towards the property. Sometimes, you can bluff and make it look like you’ve seen nicer properties at lower prices. With this, you take a firmer stand in negotiation and you’re able to push the price down – if only they want to sell and sell fast.

These recommendations are not only for houses for sale or rent in Accra, Tema, Kumasi and Takoradi alone, but can be applied in lands for sale as well, everywhere in Ghana and most African countries. Real estate in Ghana is still at an infant stage if you compare it to developed countries. The mortgage market remains largely accessible by only formal sector workers with income above certain levels.

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Career

The Hustle of Renting a House in Accra

You’ve got to live. Everyone deserves to be sheltered. Renting a house in the capital of Ghana, Accra and major cities in the country can be a stressful and daunting task that leaves you with headache.

This happens when you don’t know where to look and who to contact. It’s an information-driven activity that has led many people ripped off, whilst others have taken it upon themselves to make a decent living out of it through the acquisition and judicious use of key information in the industry. Opportunities exist, so are the dangers.

Price of Accommodation in Accra

Rent for a house in Accra and Ghana as a whole, depends largely on the location of the building. Location is the major determinant of the price you pay for accommodation. Other factors such as the age of the building, condition, availability of certain facilities and services, also contribute to the rent charged for a property in the major cities.

A three-bedroom property located in an estate at Kuntunse (outskirt of Accra) is rented for GHc450 whilst same building at Dzorwulo, Osu, and Asylum Down, Tesano would be rented for GHc1,500. In Achimota, Kokomlemle, and Kanda, a similar property is rented at GHc1,200. At the high end of the renting pyramid is East Legon, Airport residential area, Labone, Cantonments and Adjiringanor where a four-bedroom property is rented at GHc5,000 and above. It’s about location, location and location.

Takoradi is also seeing steady rise in cost of accommodation over the past five years, as economic activities see growth. Tema and Kumasi are also major cities whose accommodation cost is not materially different from Accra.

Why Rent is High

The housing deficit in the country, especially in the major cities and surrounding towns has put so much power in the hands of accommodation providers at the negotiation table. Prices are demand-driven. Economic activities are centered in and around the major cities which is causing rural-burn migration, hence the housing deficit. Secondly, the growth of foreigners in the cities has put some pressure on accommodation, causing demand for properties to push prices higher.

The absence of mortgages for the middle class and lower class has forced prices to shoot up so much so that decent accommodation is not affordable by a large number of the population. Eligibility for mortgages in Ghana will require that you earn a minimum of GHc3,000 per month, an amount that practically disqualifies about 80 percent of the population.

If mortgages were available and accessible by a larger portion of the population, there is a high possibility that rent would not be as high as it is. In absolute terms, rent in Ghana is not as high as you would find in places like the UK, the US, parts of Europe and even Dubai, but the standard of living and the average earnings of the Ghanaian makes it very expensive.

Regulation

The rent control body in the country is particularly in charge of making sure that property owners and landlords do not demand beyond six months rent for accommodation seekers. However, the regulation has been practically set aside by both landlords and property seekers alike, demanding and paying in advance rent covering period of 24 months usually. Prices however are dictated by the economic forces of demand and supply.

Agents and Fees

The high rent charged for accommodation in the cities is made worse by the unavoidable acts of agents (middlemen who assist accommodation seekers to get properties to rent). These agents are usually men who demand fixed amount known as registration fee which basically entitles you to their service, and a variable portion which is usually 10% of the total rent to be paid. Because you usually don’t have the time to roam the whole of Accra looking properties, you are usually compelled to rely on the unreliable agents.

Online Portals (Developments and Challenges)

The emergence of online portals has made the search for homes easier than before. Tonaton.com and meqasa are some the online portals bringing property owners and seekers together for onward transaction. With online portals, agents are taken out of the equation.

The online market is at the development stage and has some challenges. Among these challenges are inability to transact (make online payments) directly online without meeting the owner face-to-face, the need to verify the existence of the property and its condition and low penetration of internet use among adults, together are major deterrents to the growth and use of online platforms for property search and transactions. Such challenges have left the established role of agents unshaken.

Mortgage Market in Ghana

Mortgages are expected to help the industry grow by playing a key financing role in the property market. However, their role has been very minimal and limited to only the rich or gainfully employed. Most of these mortgages are dollar denominated, making it quite unattractive for the Ghanaian whose earnings are in the local currency, cedi…..a currency that has show high levels of depreciation against its major trading currencies over the past years.

The situation with residential properties is not so different from what pertains to commercial properties.

What’s Next for the Property Market?

The property market in Ghana has been recently flooded with many real estate developers as a result of the high markups in the industry. Thousands of properties have sprung within and around Accra and other cities, but remains expensive for the wallets of the average Ghanaian.

Try and make the most use of online portals to minimize the agent’s cost, seek the services of professional estate lawyers, and choose properties after careful examination of properties to select the best deal. In all these, there are very good deals in the city of Accra, if you’re willing to take your time and carefully go through your options.

 

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Career

Land or Car? Which one should you buy first

When you get your first job after school, you’re the happiest man when it’s the perfect job. After earning some good money and saving for your first two or three years, you have about GHc36,000 to play with. Many are the assets that career starters invest in. But which one makes a good investment.

Most of the career starters I meet are making a simple decision. They either save enough or take a loan to do one of two things: to buy a parcel of land or buy a car. And here’s how I see it

Buying a car

The classification of car as an asset in personal finance is one that remains a big debate on everyday basis. The arguments for and against its classification as an asset make sense to me, but that’s not my focus now. Young men and women save or take loans from financial institutions or their employers to buy a car for the following reasons

  1. To drive to and back from work, early and comfortably
  2. Public transport is unreliable and frustrating
  3. Hired cabs are too expensive
  4. Prestige and show-off

 

Fuel and maintenance costs are required on an ongoing basis, to use the car for the reasons stated above. These amount to about GHc300 monthly, with variations based on distance between home and office and the type of car. In the later life of the car, a third expense line appears – repairs. The terminal value of the car dwindles over time. So usually, you are not able to sell it at the same price you bought it after a year or two.

Buying land

The amount spent on the purchase of a used-car, in most cases, can buy a plot of land in some parts of Accra (likely outskirts of Accra). For example, the GHc36,000 in our preamble can buy a normal home-used car or a plot of land in some parts of Accra. But buying land at the outskirts of Accra isn’t a bad investment at all, considering the outskirts become mainland after a decade or less.

  1. No ongoing cost
  2. Value of the land rises over time in Ghana
  3. You still have to pay for public transportation to work

 

These features make land superior investment than buying a car for immediate comfort. The value of land in Ghana would usually double in about 5years. Eventually, the one who buys the land today has to save money again to buy a car, and the one who buys a car today also gathers money to buy a plot of land, both at about twice the value after about four years. So why is buying land superior – it’s in the ongoing costs and appreciation or depreciation of the asset purchased today.