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Investing In Real Apartments Whether There Are Better To Save Bank?


In the context of gold price and interest rate of bank deposit tend to decrease as the current investment in apartments for rent is the expert assessment is attractive investment channels, high profitability, especially The apartment from the middle to high level meets security standards, services and utilities in sync.

According to data obtained by the Rever from the Ministry of Labor – Invalids and Social Affairs, as of quarter I / 2017, the country has nearly 84,000 foreign workers who are granted work permits, of which 90% do not possess real estate. Survey of budget rent apartment of senior foreign personnel, the investment level varies from $ 1,500 to $ 5,000 per month.

See more: Vietnam Real Estate Investment

Investing in high-end apartments is a relatively lucrative channel for saving money

However, Rever notes that this easy-to-use supply of resources is not easy, given the relatively high standard of customer demand. In addition to the quality requirements of the apartment, the service must meet modern standards, security and security conditions, synchronous facilities and peaceful living space. The demand of customers in the segment of high-end apartments is becoming more demanding as many bring both spouses and children when coming to Vietnam, thus the demand for utilities serving family life such as Children’s amusement parks, international schools and international hospitals have also increased since then.

In other words, this group of customers is ready to pay high rents for apartments that must be of the international standard of living.

Luxury apartments  with 1 – 2 bedrooms are increasingly priced

Luxury apartments with 1 – 2 bedrooms are attracting investors, especially in the high-end projects. The high profitability, stability and low capital investment are the reasons for this heat. Therefore, it is no wonder that when any project is open for sale, apartments of this type are always attracted by buyers.

Recent reports show that HCM City is experiencing rapid growth of FDI, the total number of new and additional registered capital and investment in the form of capital contribution and repurchase of shares in the first quarter of 2017 reached $ 7,71 Billion, up 77.6% over the same period last year. Consultants are predicting that the prospects of high-end apartment rental in the coming years will be bright as many multinational corporations turn to manufacturing operations in Vietnam. The number of tenants is mainly foreign businessmen, specialists, and employees.

According to CBRE research, rental yields are higher than current savings rates. Specifically, the luxury apartment rental always maintained a profitability rate of over 8% per year during the past 3 years. This is the second highest rate in Southeast Asia, just behind the capital Phnom Penh (Cambodia) is 10%.

Apartment rental rates in Vietnam are quite high compared to many countries in Southeast Asia

The prospect of luxury apartment rental market becomes more apparent as many multinational corporations relocate their production operations to Vietnam. Along with this trend, a large number of professionals and corporate employees will have demand for rental housing.

However, in the market, only a few projects meet the strict requirements of high-end tenants, mainly concentrated in the East, especially Thao Dien and An Phu areas that are residential Of the expat community in Ho Chi Minh City. The profitability of these projects is always high and stable. With the average selling price fluctuating at about $ 2,500 / sqm, the investment cost for high-end with 1 – 2 bedrooms in Thao Dien and An Phu areas is about $ 125,000-200,000. The average rent range ranges from $ 900- $ 1,500 / month, reaching a minimum yield of 8.6% / year, much higher than the current saving rate.

Sending  bank savings and inflation fears

According to analyst Rever, if you have an idle amount of 2 billion, you decide to save that money in the bank with a 12-month interest rate of 6% per year. After a year, you will get a profit of 120 million. However, a problem that bank depositors should know is inflation. For example, if the inflation rate is 3% (half of the bank’s 6% interest rate), you will have a deficit of up to 60 million dongs. Therefore, the amount of interest you earn after one year will have to spend half to pay for inflation. That is not to mention, there are years where the inflation rate is very high about 5-6%, equivalent to the interest rate that banks offer. Then the interest you pay at the bank is enough to cover inflation.

Sending bank savings is a safe investment channel, but profitability does not really attract investors

It can be said that saving bank is a safe investment channel, not risky and a headache when thinking about the problem of capital loss. However, if compared with the form of investment for rental apartments, the profitability of saving deposits is somewhat less.

Rever’s advice for you when investing in rental apartments

Choose large-scale or high-density residential projects: Projects that have multiple units will make it easier to hire, attracting customers by the services that make up the building. In the building. The higher the density of dwellings, the better the ability to rent, with associated houses or villas should be located in areas for many homes, crowded.

In order to increase investment efficiency, it is necessary to choose a project that can receive rental housing right away, or investors have enough prestige to hand over time to increase investment efficiency and ensure cash flow.

Choosing projects that have a good living environment, closed service & high quality: Normally, projects with good living environment ensure better liquidity as well as better rental rates because they attract more high-class customers.

If the project is under construction, select the projects of reputable investors, big brands and especially the widely known communication investor.

In summary, with the comparison between savings deposit and real estate investment, we can see that real estate investment is more profitable than bank savings. That is not to mention the case in the future the value of real estate will be pushed up, the proceeds will certainly be higher through the form of savings deposits.

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Investing In Real Apartments Whether There Are Better To Save Bank?

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