A Ghanaian Lawyer and Blogger, Chris Vincent has written a long letter of advice to Ghanaians who own properties in Ghana while living in abroad.
He posted;
“If you build a house for residential purposes, it must be used for such purpose. If you build a house in Ghana to live in, and you live abroad eleven months of the year (only visiting for a month per year) and you are renting out there in abroad, while the house remains empty in Ghana with a caretaker enjoying it, that is not necessary.
If you build your own house in Ghana and you decide to leave it for your family or friends in Ghana to live in it, that is good for you. At least, you are making use of the house. But expect the bills to come to you or the maintenance costs too. And do not be disappointed if you visit to see the state of your house.
For those claiming that building a house in Ghana while you live abroad is some sound investment, what does buying a house where you live (abroad) leaves you with? Is that not even a far better investment? At least, you get to enjoy your house, it appreciates in real value and you can sell it anytime you that you want. Consequently, take the money with you to Ghana to buy a house when you finally decide to relocate.
This ridiculous idea of Africans living normal lifestyle abroad, and building huge houses back home to be enjoyed by caretakers majority of the time ought to end. I do not know who succeeded in passing on this idea from one person to another.
I know several people who will show you the photos of their nice houses sitting in Ghana when you meet them abroad. Usually, I ask them this: how often do you enjoy this house that you are showing me?
Last year, I spent about 7 months in total in Ghana, therefore, it makes some sense if I have a residential property there because I get to enjoy it.
Also, those of you who claim you can build a house and rent it out in Ghana, have you heard about what is termed as buy to let abroad? You even need less capital to get a place to buy and let abroad than you need to fully build a whole house in Ghana.
Also, a residential property is never an asset, it is a liability. Here again, people think every house is an asset.
The truth is, we lack proper financial education and we make a lot of bad investment decisions founded on passed on ideas by people who lack financial education in our communities.
In fact, to build a house with $150,000 dollars in Ghana and rent it out for even one thousand dollars a month is a bad financial decision. It will take you a total of about twelve years to break even (to make back $144,000 dollars). You will make $12,000 dollars a year.
If you invested the same $150,000 into an index fund with a reasonable 10% increase per annum, that is $15,000 dollars a year, and with the power of compounding, you’ll have $470,764 in the same 12 years”.