Ghana’s Lettings Sector Needs To Evolve

For some valid reasons of which many landlords will testify, has resulted in the rental sector in Ghana favouring the landlord in certain aspects. Most commonly a landlord charges one to three years rent in advance, even though according to the Rent Act, landlords can only charge a maximum six months rent in advance, with succeeding rental payments due every six months.

My 16 years experience of working for and managing estate agent offices in Central London and Ghana, I believe to take Ghana's property industry to the next level there needs to be an evolution from traditional practices, enabling a massive opportunity for further growth in the lettings sector.

I emphasize with landlords and the system of taking the complete rent upfront, due to unreliable tenants and miss-use of their properties. Especially if these rents can be achieved within a reasonable amount of time. But what of the properties that are left on the market for months at a time gathering dust?

Yes the appreciation in property prices means an empty property is still achieving good yields, but a landlord should also take into consideration the extra (on average and an estimate) 10%-15% rental yield a landlord can achieve on a tenanted property per year, not to mention the rental price increases for subsequent years thereafter.

MONTHLY RENTS

In the UK, USA and Europe, rents are predominately paid to the landlord in advance on a monthly basis. They have systems in place where a potential tenant is referenced usually through a referencing company, but can be carried out by the lettings agent also. Credit checks, employment, bank, previous landlord and character references are processed, before a landlord considers accepting a tenant for their property.

With an infant lettings sector in Ghana and no nationally recognised system for actual tenant referencing in place, there is an opportunity for reputable and professional letting agents, landlords and referencing companies to

convene and discuss a workable system and a way forward. This will boost the sector like never before, by allowing reputable tenants to be able to pay their rent with a few more options, i.e., monthly, quarterly, six monthly, as well as the current larger payment methods if this is affordable to them.

FORWARD THINKING PROPERTY COMPANY

There is at least one property company in Ghana who are starting to implement this system, by advising landlords of the benefits and implementing a unique and innovative reference service for professionals and employed prospective tenants. Enabling them to pay their rents monthly in advance. If you would like to consider this scheme or would like further information contact, Crown Regency Ltd, Property Consultants based in London & Ghana, www.crownregencyghana.com, [email protected], who are one of the first taking this approach.

Even though changing a landlords mind-set of collecting monthly rents will be difficult and take some time for them to get used to, due to the fact they will have a sizeable less amount of a lettings income upfront and the slightly higher risk factor of defaulting tenants that may arise from the system of paying rents periodically, Ghana has a vision of becoming the 'international hub of Africa', so it will have think and act 'internationally' also, if it's to achieve its vision.

There are however some landlords already coming to the same conclusion, as their properties remain empty even though there is a high number of well paid professionals who can afford monthly rental payments but also would like 'some money in their pockets' for sustenance or may not have the complete funds for the full year, a more flexible and international approach will allow a progression in Ghana's property lettings sector.

Mr Leslie Ado

Director of Crown Regency Ltd, Property Consultants, London: Ghana

www.crownregencyghana.com, www.crownregency.co.uk
Editor of Epicurean Magazine, Ghana's Luxury Real Estate and Life Style Magazine
www.epicureanghana.com