Mr. Tran Tien Dung (37 years old, from Ha Nam, self-employed) and his wife, after more than 10 years of trading, have saved more than 5 billion VND. With this amount of money, Mr. Dung and his wife are calculating to find a channel to invest.
Mr. Dung shared that the couple planned to use their savings to return to their hometown to buy land. However, many people advised them to invest in buying apartments in Hanoi because the prices are good, and they can even rent them out if they do not need to live there.
Faced with the advice, Mr. Dung said he was hesitant and had not made a final decision. “My main job is business, so I am quite busy, so I want to focus on safe assets. However, my wife and I feel anxious if we just leave the money lying around without investing anywhere,” Mr. Dung confided.
Sharing with reporters, financial expert, Dr. Nguyen Ngoc Tu - Lecturer at the University of Business and Technology - said that to choose the right investment segment, it is necessary to understand the advantages, disadvantages and profit potential of each type.
For apartments, the segment with a value of about 5 billion VND, handed over in less than 5 years, can grow in selling price by 4-8% per year during a period of stable market development. Apartments can also easily generate cash flow from leasing with a profit rate of about 3-5% per year.
The advantage of investing in apartments is the ability to recover first because it serves real housing needs. Apartments also rank first in terms of rental cash flow efficiency. Therefore, this is the segment with the best liquidity among real estate types.
However, according to Mr. Tu, this type also has a disadvantage that in order to achieve the expected growth rate, it is advisable to buy when the project starts selling. Of course, at this time, customers must accept the risks of future real estate such as slow progress or long time to issue pink books.
Apartments will also decrease in price increase as they age. After many years of handover, it is necessary to consider restructuring to newer apartments, otherwise the value and rental income will decrease accordingly. Converting to a new apartment will take more time and effort.
Meanwhile, with land in the suburbs or in the provinces, one can expect a profit margin of 12-15% per year with an investment cycle of 5 years or more. Especially when the market is developing vigorously or there is new planning information, population growth, the profit margin can be higher.
This financial expert believes that with a capital of 5 billion VND, one can choose areas that have been divided into plots, have clear legal status, and have an area of 80 square meters or more in the Ha Nam area.
However, high profits come with high risks. At this time, the land market is still quiet. This segment is suitable for professional investors, with high risk appetite and good market analysis and selection ability.
Therefore, with the 5 billion VND saved, Mr. Tu advised to determine investment taste to choose the right segment.
If the priority is to generate monthly cash flow, cover living expenses or support a business, pay off debt..., an apartment is the right choice.
On the contrary, if you expect outstanding growth in the long-term investment cycle, suburban project land will be the right option.
