Buy a house or start a business: which comes first?

Business Insider

30-06-2025

If you have savings and you're debating whether to buy a house or start a business, you're facing one of the most defining decisions of your financial life. For most people, this choice can shape both personal wealth and legacy.
The security, equity, and a hedge against inflation offered by a home can often clash with the opportunities that come with starting a business.
So what's right for you then?
Because more than ever, the choice between two no-brainers could also mean the difference between surviving and thriving.
Let's lay the facts!
Africa's Real Estate Market Is Big, Growing, and Underutilised
Africa's total real estate value is expected to reach $17.64 trillion by 2025, and with a growth rate of 6% annually, we could be looking at over $18.7 trillion by 2029. When we compare this to the previous two or so decades, that's a lot of wealth being built in bricks and mortar, especially in urban centres.
Great Investment Zones
Cities like Abidjan, Dar es Salaam, and Accra are showing strong rental returns, only rivalled by Penrith. These range between 8 to 12% as these regions are fast becoming real estate magnets for both domestic and foreign investors.
Still an Untapped Market
Despite its size, Africa only attracted 0.15% of global real estate investment in 2023, which is roughly $1 billion out of $684 billion. This low penetration highlights a major opportunity and reflects infrastructure bottlenecks that the bold and informed can use to their advantage.
SMEs Are the Backbone
A great example of this is in Nigeria, where SMEs make up 96% of all businesses and employ 76% of the workforce. These SME's contribute nearly half the GDP across sub-Saharan Africa while creating about 80% of new jobs and representing almost 40% of the economy. To put it simply, they are the lifeblood of economic growth and innovation.
A Financing Gap
Here's the issue: there's a $330 billion annual funding shortfall for African SMEs. Women-owned businesses face a $42 billion gap on their own. Even with global funding programs, most SMEs still struggle to access capital. Traditional banks often shy away from startups, which pushes many entrepreneurs to rely on informal lenders or family savings.
Where To Look?
Fintech is booming, and firms like Moniepoint, PalmPay, and Paga are growing at over 60% annually. Agritech, clean energy, logistics, and e-commerce are also promising sectors with lower entry barriers and high demand.
Why Buying a Home First Can Make Sense
You Build Equity Automatically
The Penrith Floor Plan is proof that with prices rising 5-8% each year, owning a home builds wealth in the presence of rising inflation. It's also proof you're not just paying for shelter, but growing an asset over time.
You Can Use It as Leverage
Real estate works as collateral. Owning property can help you qualify for lower-interest business loans or even equity loans to start something new. In markets where credit access is tight, this can be a powerful financial tool.
Mental Peace Matters
A stable home removes worries about rent increases or surprise relocations. That mental bandwidth can help you focus more on your goals. And if you plan to start a business later, that peace of mind is priceless.
Things to Watch Out For
Homes aren't easy to sell in a pinch. Liquidity is a challenge.
Property costs don't stop at the sale; there's upkeep, taxes, and utilities.
Your money might grow faster in a startup than in property, depending on the timing.
Local zoning laws and title deed issues can delay your investment.
Pro Tip: If you're buying in a rising area, even a small or modest home can yield strong returns in a few years, especially if infrastructure projects are underway nearby.
Why Starting a Business First Might Be Smarter
Big Rewards
African startups, especially in tech, have delivered insane returns. A few have hit $1 billion valuations in less than 10 years. If you catch a trend early, your returns could be massive. Think Flutterwave, Andela, or Wave. This kind of upside is rare in property.
You Can Move Fast
A digital business doesn't need land or heavy infrastructure. It can adapt quickly, scale faster, and cross borders with less friction. With tools like mobile payments, cloud storage, and remote teams, even small startups can become regional players.
You Help Others, Too
Businesses create jobs, spark innovation, and stimulate entire communities. There's a social impact baked into the journey. Some founders even go on to mentor or fund the next generation of entrepreneurs.
But Know the Risks
That 45% of startups fail in the first five years.
Currency swings, inflation, and new policies can hit your margins.
94% of African SMEs are informal and often don't qualify for bank loans or grants.
Burnout is real, especially if you don't have a financial cushion.
What's The Verdict?
We've laid out the upside and downsides, so the question is, what comes first? If stability, slow-and-steady wealth, and peace of mind top your list, buying a house might be your best bet.
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