The decision to either rent or own your home is probably one of the most popular decisions every Ghanaian adult has dealt with at a point in time.
“Buying a home in Ghana is way too expensive, rent instead! You’ll get more for less.” “Forget renting, buy a home instead! Renting is just throwing away money you could have used to acquire your own home.” These are some of the many comments you get to grapple with when deciding on which option to go for in acquiring your home.
If you have ever been faced with the task of acquiring accommodation for yourself or your family, you will realize that there comes a time when you get to this all too familiar crossroads: should I buy or rent? Many people will seek to offer you various opinions as to which accommodation arrangement is better, but we need to realize that either has its advantages or disadvantages depending on your peculiar situation. So before you decide whether to click on our home rental page or home purchase page, here are some factors to consider:
In deciding on whether to rent or buy a house in Ghana, there are few questions you need to ask to be sure of which of the options to go for. These are some of the critical questions you need to ask. How much money do you have at the moment? How consistently do you expect your inflow to be? Are the inflows going to appreciate over time, depreciate, remain stable, or fluctuate? You need to have a clear understanding of your financial position and assets, and be able to make projections as to how it is going to change in the future. You must assess objectively whether you have or will have enough to purchase a home at once, or at least make a down payment and settle the rest with a mortgage, in which case you make monthly mortgage payments. On the other hand, does what you have only afforded you the luxury of renting? Typically, rent prices are known to be about 5 to 10 times less than what home purchase deposits and mortgage prices are. However, these deposits and mortgage payments stay relatively stable, while rent prices are more susceptible to frequent increases. Be sure of which situation your pockets can comfortably commit to, before you sign the papers so that you do not put a strain on your finances and mental well-being.
Many people do not realize this, but real estate prices are as diverse as income variations out there. There is a rent price for every type of pocket, and so is there a home purchase price. These differences are mainly based on the location in which the property is situated; what we call “location value”. Real estate prices tend to peak the closer you get to city centers and fall when you move towards the outskirts of town. If you’re looking to move away from the urban areas and to the more suburban parts of town, you may be able to afford to purchase your home rather than rent. More people also find it advisable to stick to renting when they move closer to the center of the city, to spend less. However, here is the catch: To serve as an investment, a home purchase helps you build equity, and for that reason, it is better to invest where your money is likely to grow faster than where it will not yield any significant returns.
Life is by no means stagnant, and our lifestyle and tastes are subject to change, whether by our intentions or due to external factors. Sometimes life just happens, the key is to know the range of flexibility your life is likely to function in, at the time you are looking to buy or rent. How stable is your career? Does your job require you to change location every 6 months? What is your lifestyle like? Are you a traveler? For options like these, it would be more advisable to rent a home because you most likely are not going to stay at that location for a long time. On the other hand, there is a benefit of purchasing a home if you are hardly going to be living in it: you can put your real estate property up for rent to other people and make some money while you are away. People with a more “stable” lifestyle lean more to the option of owning a home because their stay is for a longer-term. With regards to the property itself, there are options for more flexible options. However, for rented homes there may be strict rules for design and remodeling, making it difficult to engineer the property to suit your changing needs. However, a home that is owned can be remodeled in any way that the owner deems fit, with no restrictions.
Knowing what your long-term plans are is another important consideration in deciding whether one would go for the option of renting or owning their property. Having a clear view of your long-term plans may or may not be directly related to the property you are deciding whether to rent or own, but it is an important influence on your decision. Long-term decisions like growing a family, traveling around the globe, etc. can help you know which decision is best in the short term. In addition, other long-term plans like investment strategies can influence your decision to buy or rent. If you want to invest in something that will yield some returns somewhere in the future, then real estate is one plausible avenue. The value you get from the property depends in the long-term depends on your commitment toward maintaining it. In deciding to buy or rent you want to be sure that this is in line with your long-term aspirations before you commit money to it.
There may be a few more considerations that may influence your accommodation decisions regarding whether to purchase or rent a home. However, the critical points above if well answered puts you in a position where you now have a clear understanding of your peculiar needs and situation. Whether you purchase or rent a property may be an expensive venture, hence it is important you invest time in reflecting on all the other points before putting pen to paper to sign any ownership document or tenancy agreement.