Analysis 5 common types of property for rent in Ho Chi Minh city

  1. APARTMENT FOR RENT

Apartments are a type that has emerged in recent years as the central land bank in Saigon has exhausted under the tremendous pressure that the population increases day by day. Facing such a lucrative investment opportunity, the giants in the field of high-end apartment buildings such as Hung Thinh, Vingroup, Novaland, … massively poured money to build skyscrapers with utilities such as swimming pool, gym, commercial center, …. The areas of District 7, 2, 6, 9 or Binh Thanh, Go Vap, Nha Be … with the advantage of the land fund to meet the area factor to build large luxury apartments with a suitable location, suitable for circulation to the center.

  • Advantages:
    Make the most of the land fund.
    The material life of the people is getting higher and higher, so they will choose luxury apartments.
    Additional system facilities such as parks, swimming pools, security guaranteed
    Demand for apartments of foreigners and short-term tenants.
    High accountability. For rent with secondary apartments, profitability will be stable.
    Flexible payment, in installments with loan support from the bank.
  • Disadvantages
    Price is rumored to be higher than real value.
    Investors went bankrupt while building projects.
    Market research and analysis takes a long time.

2. GROUND LAND

Ground land has been around for a long time, with high profits that bring great attention from investors, in addition, investors do not have to spend too much on upgrading or construction. Nhon Trach is one of the coastal areas with the location only 20-30p from the center of the city with key projects which are included in the priority of the state.

  • Advantages:

Does not cost too much to build, suitable for investors with little capital.
The largest land bank is peri-urban areas when the center is increasingly tight.
High profitability, expected to be 3 times higher than bank interest rates.
Supported by bank loans up to 70%.

  • Disadvantages:

Prices are heavily influenced by the surrounding buildings, inside or outside the urban development area, complete transportation infrastructure, and complete planning.
The law is unclear in many areas.

3. HOUSE IN THE FACING ROAD

Houses on the facing road are probably the oldest of all. The purpose of the townhouses is to improve brand awareness, convenient location for customers to find, suitable for opening shops, restaurants, hotels, … This is also a type not yet never reduce heat on the real estate market in Saigon before.

  • Advantages:

It is possible to combine the rental of space and to stay or can both business and accommodation.
The value in recent years has increased, less tolerant to price drops from market fluctuations.
The rental business is not afraid of lacking customers because the market is always in demand most of the beautiful location

  • Disadvantages
    Rents change frequently due to market fluctuations, difficult to follow.
    The area is usually not large.
    This type of high value requires investors to have large capital compared to other types.
    With the technology growing, some businesses or individuals take advantage of renting houses in the alley at a lower cost than opening their doors because customers thanks to technology can still easily find stores in the alley.

4. COMMERCIAL TOWNHOUSE

This is a relatively new type in Vietnam, even the name is quite unknown to many brokerage investors. Although this type has been popular for a long time in the world, it only emerged in Vietnam after real estate giants poured money to build high-class apartment buildings and new urban areas. It is a type of commercial townhouse in the front of the ground floor of buildings, often used as cafes, shophouses, offices, restaurants,…etc

Advantages:

Stable profit margin.
There is great potential as condominium and high-end urban projects increasingly develop.
Large commercial and high liquidity.
Receiving great attention from investors and individuals renting because of modern space suitable to become new cafes and restaurants.

Disadvantages:
As a new type, there is not much reference information on the market
The price is high compared to the common ground, only suitable for tenants targeting high-class customers
Still scarce in the market, it is difficult to find suitable investment places

5. ROOM FOR RENT

Room for rent is a classic type, most thriving in large city centers such as Saigon, Hanoi, Da Nang or tourist resorts like Nha Trang, Da Lat, … Because of housing prices of these areas are very high compared to the income of the people, so most of them often choose short-term or long-term lease to study, work or relax.

  • Advantages:

The cost is not too big, suitable for family business.
Demand is always high, not afraid of missing customers.
High liquidity, both take advantage of leasing and have the ability to improve the value of real estate through each day.
The revenue is quite stable monthly compared to the remaining types.
The number of people working and studying in the center is increasing day by day, the customers are getting more crowded.

  • Disadvantages:

There are many different types of people, difficult to control, not tight security.
It is easy to happen that there are debts, causing revenue losses and the time for collecting money may be longer than expected.
Depreciation of assets, maintenance costs at certain intervals.
Taxes account for 10% of revenue, including 5% of personal income tax and 5% of turnover.
Losing opportunity costs. Typically, the period of time for payback for this investment model lasts from 5 to 10 years. This means it is difficult for your capital flows to shift to other investment channels

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