Real estate is one of the safest investments in the world, owing to the low risk and high return it provides. Many investors seek to diversify their portfolios by adding real estate as a hedge against inflation. Real estate has historically been one of the best investment opportunities, and it is currently gaining ground on other dividend paying investment types such as gold, equities, mutual funds, savings accounts, and bonds.
According to experts, Ghana's real estate market is a clear preference for capital investments, with a projected return on investment of 20% to 25%. The country's construction and real estate sectors continue to enjoy prosperous conditions because of rising urbanisation, a growing middle class, and a continuous stream of government infrastructure projects. Therefore, investors have several chances to fund initiatives and build businesses, enabling them to safeguard investment options in the real estate sector.
For many reasons, investing in real estate is a smart idea. You may use real estate to increase your wealth while taking advantage of fantastic tax benefits and a high rate of return. Here are the top real estate advantages of investing in uncertain times.
1. Real estate is a valuable tangible asset
Your stocks and mutual funds are not something you can hold in your hands. A straightforward stock certificate or certificates of deposit is not comparable to the reality of a property that you actually own. If you’re looking for concrete evidence of your investiture allocation, your house or apartment is a physical structure you can touch. In this way, tangible value always trumps intangible value.
"Buy land, they're not making it anymore," Mark Twain once said. In this sentiment, your land will always be worth something, as will your property. Other ventures could leave you with little to no value in physical assets, like a new car whose value depreciates over time. Getting the best coverage you can afford through homeowners' insurance will safeguard your investment decisions.
2. Real estate yields higher returns
When it comes to blue-chip stocks and derivatives, there is a great deal of ambiguity in market conditions. The real estate market has a lower correlation with other significant asset classes and is less volatile than other investing strategies. As a result of the higher returns per unit of risk, real estate becomes the highlight of an investment strategy.
Additionally, the longer you own your property, the less risk you have of any loss. The real estate market is one of the first to adapt when there is rapid economic and infrastructure expansion, and it always bounces back quickly following downturns in the market. As the market rises, so does the value of your property, enabling you to build equity. In the stock market, the risk is constant, and your dividend-paying stocks may suffer from a number of uncontrollable variables. Real estate allows you to have greater control over your investment because your home is a tangible resource that you can leverage to generate a variety of sources of income while also enjoying capital growth and a high yield.
Ghana's main city, Accra, experiences a high demand for real estate from both local and international buyers. The requirements on the market span anything from lengthy leases to one-time purchases. Because of this demand, property owners are able to get a significant return on their property. Rental returns in Accra typically vary from 8 to 12%, making it one of the highest yields in Africa.
3. Property investments provide financial security
With real estate, you may get a monthly income from the properties in your portfolio, making it the preferred choice for investors. Although there are risks, buying to rent out may be a stable source of income over the long run with proper financial planning. Renting provides stability and a consistent source of income. Your safety blanket continues to become cozier as your home's capital worth rises. Even when interest rates rise, market forces will not be able to devalue your property so effortlessly.
4. Real estate acts as an inflation hedge
Real estate is different from assets that are limited by inflation. In essence, you get more out of every investment the more you put into it. Kitchen improvements are the most successful in increasing the value of a home. A reasonably inexpensive option to improve the appearance of the property is through bathroom improvements.
Another critical component is the property’s location. Purchasing a low-value home in a desirable area or a developing suburb will bring in profits which you can reinvest in the property, even when the markets are experiencing a rollercoaster.
Rental rates also grow when prices climb. Properly managed properties will increase values and produce higher rental revenue in future rate hikes and market volatility. Inflation can be fought off and profits can still be made in real estate.
5. Real estate offers appealing tax benefits
The tax advantages that come with owning property are one of the main reasons individuals invest in real estate. For investors, one alluring aspect of buying real estate in Ghana is the tax advantages.
The Ghanaian government has a variety of programmes and financial advisers to promote the real estate industry. The government gives significant tax savings to qualifying corporate purchasers or investors interested in constructing commercial real estate for their company.
The government is also leading the digitalization of Ghana's National Land Registry as part of a coordinated national digitization initiative. This will contribute to a more transparent and effective real estate and land value chain. In the end, these actions increase investors' access to and profitability in the Ghanaian real estate market.
6. Investing in real estate is simple
Anyone can purchase a house. The real estate industry is simple to comprehend and is mostly driven by customers rather than the market. You do not need to monitor the Ghana Stock Exchange if you invest in real estate. Real estate is straightforward, hassle-free, and provides guaranteed profits.
Real estate is unquestionably the most secure and lucrative kind of long-term investment available. However, a savvy investor needs to pay attention to a property's neighborhood track record, size, price, and amenities.
Are you looking for a lucrative investment during these uncertain times?
In recent months, real estate in Ghana has been shown to provide successful earnings in times of uncertainty. Over the past ten years, the real estate market in Ghana has experienced tremendous growth due to rising demand, adding to the country's gross domestic product. The demand for residential property dominates the real estate market, with the market for commercial property coming in as the second-largest sector.
The majority of potential investors might have significant concerns about where and how to engage in Ghana's real estate industry in current economic conditions. Having expert property advisors on your side can help you identify the ideal property in these unsettling times. In addition to assisting you in acquiring your investment property, the real estate professionals at Akka Kappa can also help you find the perfect tenant. Contact our experts today.