How To Finance Your Investment in African Real Estate

Investing in real estate across Africa offers exciting prospects, but successful ventures start with sound financial strategies. Whether you’re a non-citizen eyeing upscale properties or affordable housing in African markets like Ghana Nigeria or a local looking to make your first property purchase, understanding your financing options is crucial. Let’s explore how to finance your property investment effectively, ensuring you make informed decisions that pave the way for a prosperous future.

Exploring Mortgage Options:

In Ghana, reputable banks like First National Bank, Republic Bank, Fidelity Bank, and Stanbic Bank offer flexible mortgage solutions. Mortgages can be an excellent way to finance your property, especially when considering the attractive yields in locations like Accra, where rental yields range from 8% to 11%. An innovative e-mortgage platform collaboration between Seso Global and FNB now extends mortgage accessibility to both Ghanaians and non-resident non-Ghanaians, simplifying the property purchasing process. With a 15-year tenure and a competitive base interest rate of 13.5%, this mortgage product is set to transform property finance in Ghana.

In addition to this, Seso Global, has partnered with Republic Bank, to introduce a Diaspora Mortgage Platform, that streamlines the property investment process for diaspora and african citizens living abroad. Pre-verification and approval of properties expedite transactions, and collaborations with mortgage experts in the US, UK, and Canada ensure that the mortgage application aligns with diaspora market standards and procedures. Key benefits include a simplified mortgage application process, access to prime properties, tailored mortgage options, and transparent, secure transactions.

Self-Financing, Crowdfunding, and Loans

Beyond mortgages, explore self-financing, crowdfunding, and loans tailored to your investment needs. These financing avenues offer flexibility and can cater to various property investment scenarios. 

1. Savings: In savings, you have a certain amount of money set aside for investment in real estate in the future. Investing in property demands a high degree of financial discipline when saving.Begin with a comprehensive audit of your personal or household finances. This step provides clarity on your readiness for property investment. Consider establishing an emergency savings account with three to six months of living expenses to handle unexpected costs. Savings play a crucial role in real estate investment. It involves setting aside a specific amount of money over time to achieve a desired investment target.

2. Joint Ventures: Joint ventures involve two or more business partners pooling their resources and expertise to reach a certain goal. These individuals share common real estate goals, dreams, and aspirations. Additionally, the risks and rewards of the property investment are also shared. Family and friends too can utilize the “joint venture” approach when investing in property.

3. Bank Loan: Loans can be used as startup capital during the investment period of the real estate property. The property itself may be used as a security for the loan. Furthermore, commercial real estate loans can be used to purchase or refurbish a commercial property. These loans have a specified interest attached to them. 

Real Estate Investment Trusts (REITs)

If you prefer a more passive investment approach, consider Real Estate Investment Trusts (REITs). These function like mutual funds but allow you to invest in income-producing properties. They offer diversification without the direct management of properties.

House Hacking

House Hacking involves living in a property that generates income, like a duplex or house with additional rentable space. By renting part of your residence, you reduce total housing costs and learn the landlord business.

Government-Backed Financing Options

Various African governments offer government-backed financing options, including subsidies, tax breaks, and initiatives to support real estate investment. These aim to encourage investment in affordable housing, a critical issue in many African countries.

Seso Global Deal Room Deal Room

Seso Global, in collaboration with Africa Land Developers (ALD),developed a groundbreaking financing platform called the Deal Room. The platform offers an exclusive opportunity to connect with vetted property developments and invest in leading projects. Launching first in Ghana and expanding to Nigeria, this platform will simplify real estate investment in a way that drives significant growth in property supply and demand in major African property markets.

The Deal Room Process:

1. Identifying High-Potential Developers: Seso and ALD curate developers with promising projects.

2. Due Diligence and Financial Analysis: Rigorous assessment ensures project viability.

3. Initial Financing: ALD funds the first 10-20% of new construction projects.

4. Public Investment: The project opens to the public for co-investment with as little as $10,000.

5. Returns: Investors receive returns after the specified investment period.

As Africa’s real estate market continues to evolve, financing options are becoming more accessible and diverse. By aligning your investment goals with the right financing strategy, you can seize the exciting opportunities this burgeoning market has to offer.

About Seso

Seso Global has established itself as Africa’s most trusted property marketplace, providing a unique one-stop-shop for digital real estate transactions. The Seso Global app offers a diverse range of properties and real estate services in Africa, providing home buyers and investors with a comprehensive platform. This guarantees a secure and efficient end-to-end property purchasing journey, ensuring a seamless experience along the real estate value chain. With Seso Global, you can effortlessly purchase affordable properties in Ghana and Nigeria online and embark on your investment journey the right way.