Buying old houses, renovating and selling new ones, investors should be careful of risks

VÂN HI |

Can Tho - Low capital outlay and good liquidity make investors choose to buy old houses to renovate and resell.

Faced with the increasing demand for housing and the desire to quickly make a profit, Ms. Phuong Ha (CEO of a cosmetics company in Can Tho) decided to change direction and buy old houses, then renovate and resell them.

It is known that at the beginning of this year, Ms. Ha spent 5 billion VND to buy 2 houses in Can Tho City and Vinh Long with the purpose of short-term investment. However, after selling, the majority of customers' demand was for low-cost houses, making Ms. Ha's "short-term" investment not as expected.

Nha dau tu re huong mua nha cu tan trang moi vi co thanh khoan kha tot.  Anh: Bich Ngoc.
Investors are turning to buying old houses and renovating them because of good liquidity. Photo: Bich Ngoc.

Ms. Ha said: "2 months ago, I spent 1.2 billion to buy an old house and another 200 million VND to hire someone to repair, design, and add furniture. After negotiating, I just sold this house to a customer for 1.8 billion VND. Now I am still looking for an old house to invest in."

According to this CEO, compared to investing with a large amount of money while land prices are increasing, the opportunity to make a profit will be more difficult than before. For buying an old house or renovating a new one, the capital outlay is low but the liquidity and profit are quite good.

Meanwhile, talking about investing in "magically" transforming an old house into a new one, investor Nguyen Hai Duong (Vi Thanh City, Hau Giang Province) is somewhat cautious.

"I also invested in this form, making a profit of 200-300 million, but then gave up because it took too much time and was not sustainable. Moreover, real estate prices are on the rise, finding an old house priced under 2 billion in a big city is not easy while most customers only stop at buying cheap houses," said Mr. Duong.

Anh: Kieu Phung
The housing segment is expected to flourish due to high demand. Photo: Kieu Phung

Mr. Tran Minh Hau - owner of a real estate brokerage office in Ninh Kieu district, Can Tho city - said: The business model of renovating old houses into new houses, although having good liquidity, contains many risks in terms of capital retention time and customer preferences.

"Investing this way, in addition to finding a good location, requires knowledge of construction, structure and calculating the level of home repair to avoid the case of too much repair cost, increasing the selling price, then the risk of unsaleable", Mr. Hau said.

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