GIUDE TO REAL ESTATE INVESTING IN GHANA: EXPLORING ALTERNATIVE ENTRY POINTS FOR BIGINNERS -

GIUDE TO REAL ESTATE INVESTING IN GHANA: EXPLORING ALTERNATIVE ENTRY POINTS FOR BIGINNERS

 

A few weeks ago I spoke on a real estate panel at Labadi Beach Hotel on the topic “Unpacking Thriving and New Markets and Strategies to Invest in the Real Estate Sector in Ghana”. Immediately we ended the session, close to half the participants surrounded me to seek more insight into how they can invest in the real estate sector in Ghana. To many, it was a dream to pursue someday when they gather enough funds. Little did they know that, that dream can be materialized even now using the little or no resources they have. But among the masses that came to me was a young University of Ghana student. She was so passionate about real estate investing but lamented a poor financial background that makes her see this dream coming to pass in a far distant future if it comes at all.

But while she was still counting her problems and reasons why her dream and passion may be a mirage, I looked at her closely and noticed that she was using an iPhone 16 ProMax. Wow, I exclaimed in my thoughts. So after pouring all her frustrations, I told her she has more than what it takes to start her real estate business today even while a student. She was like what!. What do you mean sir!, she asked in surprise, and I asked her as whether the iphone (iphone 16 Promax 1TB) was for her and she said yes. Then I told her again if she is aware the price of her phone can buy a plot of land or even two (2) or be given in exchange for a land in areas such as Tsopoli and some other parts of Accra? and she said no. 

 

The rest is history, the point here is, there are many people out there with the mindset that one needs to have huge capital to be able to venture into real estate investing. In fact, it is good when one has huge funds to start with, but whatever the case may be, one can still start with the little he has or even start with nothing at all. This is not motivational speaking. We have been there before, it is sound industry information you need.

 

Having had this experience with many people over the years as an industry thought leader speaking on real estate programs, I decided to publish this article to help persons nurturing ambitions to invest in the real estate sector, are well informed enough to take the swing. Therefore, the purpose of today’s article is to present a formidable guide to real estate investing in Ghana, exploring alternative entry points for beginners. Now, without wasting time, we shall be taking you through six (6) entry points beginners can use as gateway into real estate investing irrespective of how small their initial capital may be. We shall be looking at; the Land Sale Agency Entry Point, Housing Sale Agency Entry Point, Building Material Supplier Entry Point, Joint Venture Entry Point, Property Rental Entry Point and last but not least, the Barter Trade Entry Point.

Land Sale Agency Entry Point

One can start his or her real estate business without cash; this sounds weird but it is possible. The Land Sale Agency Entry Point is a real estate investor beginner entry point where the individual subscribes to a trusted real estate company and sell their lands on commission basis. Subsequently, an agreement could then be reached between the agent in question and the real estate company to covert commissions into lands for the agent. A dual arrangement could even be made allowing the agent to receive commission at a certain percentage and the rest converted into lands. 

The beginner who can do this consistently for two (2) consecutive years or more will have enough parcels of land to start his or her own real estate land banking investment.  In some cases particularly with lands owned by chiefs, when an agent brokers the purchase of bulk parcels, the chiefs most often give out extra lands to him by way of appreciation even beside what is agreed upon in their written commission contract. Depending on the size of the transaction, the agent can land a parcel as huge as an acre of bonus land or more in addition to his entitled commission.

Let me get practical here with an illustration as to how one can employ this concept. There are many bankers and other corporate workers out there who have excess liquidity but lack the information on genuine real estate companies to buy lands from. Drawing a strategy targeting only bankers and working your strategy out within a year can guarantee surprising results. The sale may work magic if one is able to negotiate installment payment plans or a hire purchase plans between these bankers and the real estate companies. This allows many to buy these lands in multiple units over time without putting stress on their budget.

In fact, the demand for hire purchase lands has been fantastically high in recent times, the only challenge there the agent will have to surmount is in twofold, one, information asymmetry and two, availability of trusted real estate companies to do business with. What this means is that, anyone who will be able to make this information of available hire purchase lands to the working public and is able to connect this working public to these trusted real estate companies to deal with, is already on his way to a successful real estate investing business. Just a few weeks ago, we facilitated a similar agreement between BuildMasters Ltd and Estate Masters Ltd. It is not a rocket science, you too, can.

Housing Sale Agency Entry Point

This concept is similar to the Land Sale Agency Entry Point; the mode of operation is however quite different. Unlike the land sale agency concept where commissions can easily be converted to lands, houses are more expensive than lands. Therefore, converting commissions into houses can be challenging. However, one can have a commission agreement and the commissions accrued over time could be used in acquiring lands in developing areas. It is possible for one to say selling houses is difficult and may take a very long time to broker a deal, even though that cannot be discounted, the truth is, the commission from one such deal can buy even an acre of land depending on the location. This can be the entry point as a land banking investor. 

There are instances where developers even give cars, lands etc to agents in place of commission. A classic example is a gentleman who was given a car together with many other forms of compensation in place of cash commission selling houses for Adom City Estate years back. Today, this gentleman in question has his own real estate development, the Lord’s View Estate near the Ace Heights’ Grace Court, in Tema Community 25. Time and space will fail us to mention all the practical case studies we have recorded on the field over the years.  

It is not that easy, but I can tell you with authority that, success in this industry is more of how rich you are with industry information than the amount of physical cash you have to start with. Seek industry information from industry thought leaders, consultants, brokers, developers etc. Build strong quality network and database and that will be enough to stage a kick-off. 

Building Material Supplier Entry Point

Sometimes, it is interesting to see people who are into building materials for so many years and still wonder or struggle on how to enter or venture into real estate investing. Admittedly, small scale building material suppliers may find it quite difficult to engage this entry point. However, medium to large scale suppliers can easily enter into the real estate investing sector through partnership with off-plan developers. This is a concept where a building material supplier signs an agreement with an off-plan developer to supplier building materials for the development of the property in exchange for a given number of units of the development. 

This can easily be done through either a partial or full barter agreement for units of the development in exchange for materials. This is proven to be one of the effective real estate investment strategies and has been adopted by some players over the years. This normally works with industrial scale real estate developers most often into gated communities. In this entry point, the agreement could vary in several ways depending on the situation, convenience or options available to the parties. For example, a developer may take care of labor whilst the building material supplier takes care of the supply of all materials to the project. Alternatively, the material supplier may supply only materials. 

 

We can even have a more complex agreement involving multiple parties where one part is the provider of the land, another party supplies labor and another supplies the building materials. For example, such complex agreement is most often done with high-rise buildings where the financial muscle of two (2) parties is not enough to execute the deal.  But remember that in all circumstances, one will always have to engage the requisite professionals in the drafting and the subsequent signing of these agreements.

 

Barter Trade Entry Point

It is interesting many think that barter is an obsolete trade model after the invention of paper money. If you the one reading this article is part of that school of thought, perish your thought, it isn’t. The barter trade entry point is still relevant in the real estate investing sector. In fact many have used it to acquire lands and made fortunes from this over the years. This is normally common with family land owners or lands owned by the chiefs. Depending on the situation or whatever variables informing the agreement, cars, cows, watches, cellphones, mattresses, bicycles, motorbikes, tricycles, cement and other building materials alike. Citing practical situations, a few years back between 1992 to somewhere 1996, DVD players, cassette recorders (known commonly as tape) were given out in exchange for lands in areas such as Kokrobitey, Kasoa etc.   

The list goes on and on ad infinitum. I am pretty sure by now one would understand why I told a university student with confidence that, she could start her real estate business whilst still in school as a student. That iphone 16 Promax can be given out in exchange for plots of land in areas such as Tsopoli, Agortor, and some parts of Kasoa etc to start with. She can even get two (2) plots or more depending on how desperate the land owner is in need of the money etc.

Sometimes, it is interesting to see people carry two (2) phones, Samsung Galaxy Z Fold that costs about Ghs 26,976 and the second phone iPhone 16 Promax that cost averagely Ghs 29,000 yet they tell you they do not have enough to invest into real estate. If only they are willing to give those two (2) phones in exchange for lands, they could even get a plot or more depending on the location and that will be a good starting point for their real estate investing business. I am pretty sure by now, you are beginning to appreciate the fact that, it is no longer about having enough physical cash to start, but rather the level of industry information one has. 

Just like you consult your medical doctor when you have strange feelings or symptoms in your body, so is real estate investing. Speak to the professionals when you have mixed feelings about real estate investing and you will always have no regrets, this is the more reason why industry leaders such as the Africa Continental Engineering & Construction Network Ltd etc are around to guide you through in all your real estate investing journey. 

Joint Venture Entry Point

Joint ventures (JV) are crucial in the real estate industry. This is the situation where resources are pooled from multiple partners to develop a project. It could be one party contributing the land and the other bringing in the funds to develop the project. There could be multiple partners depending on the nature of the project and consensus of the parties involved.  It is often done between landowners and developers and in most instances where someone has the land and does not have the resources to develop it. Another person has the money but does not have the land.

Sometimes, some investors do not want to go through the pain of land acquisition or may not like to spend part of their money on land acquisition etc. In such circumstances, the land owner gives out the land to be developed where a number of units are allocated to him whilst the rest goes to the developer in question.  Joint Ventures (JVs) that we have personally witnessed and facilitated are high-rise buildings where the developers take portions of the ground floor and some apartments in the first and middle floors whilst the land owner takes the rest at the subsequent floors. 

It could also be the other way round depending on the agreement reached between the parties. In the case of residential properties, some number of units are allocated to the developer and the rest to the land owner. Even with the joint venture, there can be more than three (3) parties to the agreement, one the landowner, the other the building material supplier and the third could be the labor supplier. The material supplier supplies the entire project for some number of units of the development, the landowner takes his units and the labor supplier also takes his share.

Property Rental Entry Point

The property rental entry point is another interesting entry point for beginner real estate investors. This is where an individual acts as rent agent over time to accumulate more commissions to enter into mainstream real estate investing. Similar to the housing sale agency, it is quite challenging to convert commission into units of a property to an agent. However, the agent can accumulate commissions by himself and venture into mainstream real estate investing. But in adopting this entry point, one has to set his priorities right.

Residential rentals may take years of agency business without any good savings to start a real estate investing business with. The reason is, commissions from residential rentals are paltry compared to commercial rentals.  Essentially, this is to advise that, for one to fast-track their way into real estate investing using the Property Rental Entry Point, then commercial property rentals should be the ideal option to take. But in all these, it is important for us to let you know that the list is non-exhaustive, there are still many entry points for beginners into the real estate investment space. But we shall end here for want of space and time; you can always contact us for more insight and professional guidance for all your real estate investing decisions.

Challenges with low entry points for beginners

As simple and so interesting that these low entry points may sound and are presented here, do not be deceived that it is that simple. It is important to draw your attention that it can be very challenging getting started using any of the following concepts as a beginner. In this concluding part of this article, we will summarize the challenges and offer solutions to overcoming each challenge.  Among these are;

Information Asymmetry

Sometimes it is extremely difficult to get the right partner who fits into the given concept or entry point you want to adopt. It could take years for one to get the barter partner, joint venture partner etc. However, this can be taken care of engaging industry practitioners, consultants, brokers, and developers etc to find, bid or strike the deal for you.

Trust

Moreover, trust among parties involved in such agreements is sometimes not predictable. One can strike a joint venture deal today commit some resources into the project only to be told his partner is withdrawing from the agreement. Sometimes, the challenge could be as a result of a unilateral decisions taken by a partner in respect of the agreement without engaging or consulting some key stakeholders on the side. For example, when you have a property or land owned by multiple persons such as siblings used for such an investment like any of the above discussed concepts. 

In the process, when there is disagreement between them, the execution of the entire agreement becomes a challenge. Another example worth mentioning for ease of comprehension that can also derail any of the concepts discussed is when the land in question being used is owned by a couple. In the event there is a divorce along the line, the execution of the entire agreement becomes a challenge because, the parties may each want to withdraw their shares in the investment. However, trust issues can be mitigated by engaging lawyers and all stakeholders, allowing enough time for deep thought-through decisions whilst inserting stringent remedial clauses to mitigate the incidence of fall outs. 

Effects of Speculative Information

Sometimes, speculative information around can make a party along the line thinks that he/she has been shortchanged in the deal. It could be around valuations of the land, materials, number of units allocated per the agreement etc. The moment a party feels shortchanged along the execution of the agreement; chances are that the agreement may be set aside which will be a cost to all parties involved. The impact of speculative information can be managed by engaging certified surveyors, quantity surveyors, values etc and most importantly, using the Land Valuation Division (LVD) of the Lands Commission for all land valuation issues. This is because land valuation information from this department is not easily contested. 

Valuation Disparities

The most difficult part of all the above concepts is the valuation aspect. This is where the biggest challenge is and if not managed well will make the investment plan not materialized in the first place and even if it does, may not be executed successfully. Normally where the issues arise is, for instance, how many housing units should the landowner take in exchange for giving out the land in the situation of the barter concept or how many units should the building material supplier take in exchange for the material supply.

In case of the land and houses sale agency concepts for instance, what is the dividing line and as whether that is fair for all parties. How many plots of land is worth giving out in exchange for selling 10 cares etc. These valuation controversies can lead to disagreements that may lead to a total collapse and non-execution of the investment plan. The antidote to this also is the need to engage lawyers, quantity surveyors, land surveyors, brokers etc. This gives some level of trust and confidence making all parties feel somehow getting value for what they are giving away etc.

Conclusion

In conclusion, let me reiterate that, getting started, your real estate investing isn’t as tough as differential calculus as you may be made or conditioned to believe. Remember also that one does not need too much of a huge initial capital to start with. The most important part is to have enough industry information and working with the right industry stakeholders. I do not know if the following developers will take it kindly citing them as practical beneficiaries of some of the concepts discussed here in chatting their way into big time real estate investing in Ghana. I wish they give me the permission. 

Bluerose Estate is one of Ghana’s leading providers of affordable housing, started as landscaping company. Regimanuel Gray started as block factory and diversified its way into Ghana’s largest social and mid-end developer. The Almighty Adom City Estate started as a building material supplier and made its way to the top as Ghana’s leading affordable housing provider in Ghana. The Greens, Sethi Realty etc all started as building material suppliers, the Lord’s View Estate, Amanqaur Real Estate and Construction also started with real estate agency etc. Time will fail us to exhaust the list of how majority of the developers or real estate investors started and today made it to the list of multimillionaires in Ghana.

In concluding this article, let me also sound a note of caution, it is not like those days where anybody gets up calls and parades himself as a real estate agent. The coming into force of Act 2020 (Act 1047), the Real Estate Agency Act mandates that one cannot engage in any real estate transaction if one is not certified by the Real Estate Agency Council (REAC). This is captured categorically in Section 22 of the Act.  Therefore in all these, it is important for one to seek council with certified brokers and agents in order not to fall foul of the law.

Finally, I would end by saying that it is easy but it is not that easy. 

This is the reason why one has to seek understanding and get the professionals along with you. On this note I recommend again the Africa Continental Engineering & Construction Network Ltd to you for all your real estate investment services. We are by far the leading Real Estate Developer, Real Estate Consultant and Construction giant in Ghana and in Africa. Search our website online on www.acecnltd.com and send us a mail. We have you covered 360℃.

Reference

• • Africa Continental Engineering & Construction Network (2024): Investigation into land price appreciation Ghana: A case study of Tema Community 25.

• • Africa Continental Engineering & Construction Network (2025): Investigation into land price appreciation Ghana: A case study of East Legon Hills.