Be Careful  When Investing In The Hostel In District 10

Suspected as an easy investment channel, but District 10 may be more risky, if not careful can also heavy losses.

District 10 is considered the economic center of Ho Chi Minh City with many favorable conditions for development. Every year, the number of students and workers from the province to move to District 10 is very large, so business district 10 is considered a relatively easy way to make money. However, when so many people enter the business of renting rooms, the level of competition is high, everything is not as smooth as before.

Have a dream of investing in a motel room

Recognizing the need to rent rooms for students and workers, Nguyen Van Cuong, a resident of District 10, borrowed money to build a three-storied block of 4 rooms. Meanwhile, the total cost is up to 1.4 billion; And his total capital is only 400 million. The remaining 1 billion, he does not borrow the bank that borrowed from the acquaintance, average interest rate of 10%.

Borrowing money to build rental accommodation is very popular

The thought that just finished construction is monthly he can “sit cool eat gold bowl” but not, during the first month, he only leased 50% of rooms, each room 1.3 million per month. , thus calculating the first month’s income is 78 million. The next 10 months, the number of renters in District 10 and moved to have increased, but the vacancy rate remained at 10-25%.

Cuong shared that in the neighborhood there are many people renting rooms, at competitive prices, he dared not let the price too high for fear of having no tenants, but to the current price, the room is still empty, that proceeds just enough interest, the rest is not enough.

That is not to mention that he has no experience so there are cases of renters who fled but did not know how to do, not to mention the need to pay sales tax and personal income tax. He estimated that this situation has to pay up to 2 years. The available land, but if you go to buy land anymore, he broke the bankrupt.

The idea will be rich by renting rooms, now soaked in bitter fruit

Business experience room 10

It can be said that the demand for renting rooms in District 10 is always high, but the supply in this segment is also high. Therefore, it is not difficult to see that the business people are very prosperous, but there are people who continue to lose moisture, so long that they want to give up.

Determine the investment segment of the motel room

In order to do business in District 10, it is necessary first to identify what kind of investment you want to invest in, a popular low-cost accommodation for low-income students or workers or mini-apartment building. How high is the demand for that segment in the region in which it is located? How competitive is the supply in that segment? This is the first step and almost decisive to the efficiency of the rental business.

Where does the capital come from?

Then need to determine the source of capital, own capital or loan capital? What percentage of the loan is borrowed? The more you borrow, the greater the pressure, if the business losses are not capital, you not only lose money invested in vain but also pick up a huge debt because of investment in district 10.

You can read more information at Vietnam Real Estate Market

The higher the interest, the higher the loan

Sourcing customers

Next, you need to find the output of the product, ie find a tenant. You can rely on social relationships, post to forums, rent rooms, stickers, and flyers. Try not to empty room because it has a tremendous impact on business performance.

Tenant management and risk prevention

In the management work, attention should be paid to the procedures for temporary registration, temporary absence for tenants to avoid fines. In cases where the client needs to have a black ink contract, collect the deposit so that if the customer leaves suddenly no loss of capital.

Doing business in District 10 can grow even more brilliant in the future, but make sure that you have to study and consider carefully before deciding to invest.

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