Buying an apartment Profit or loss. Many people often don’t like apartments because in their thinking “buying an apartment later sells for no profit”. This can be true for projects with serious legal, planning or quality degradation, or projects of crappy investors. As for high-quality high-end apartments, reputable investors such as Khang Dien, Vinhomes, Novaland, Keppel Land… Currently, there is almost no concept of “loss”, just a little profit or a lot of profit.
Let’s do a math test!
Take a look at the price increase chart of 25 high-end apartments below to see how well the apartment has increased in price. On average, every 5 years when a house is handed over, the selling price of luxury apartments usually increases by at least 50%, many apartments double the selling price after 5 years of handing over. In those 5 years, you have also made a lot of money from renting an apartment, or simply enjoying life in your own apartment without spending money on rent.
Try to do the math if you have 3 billion, you put it in a bank savings account to enjoy interest, on average you get 6% interest per year (about 180 million interest). After 5 years, you will receive 900 million bank interest + 3 billion deposit, you will have a total of 3.9 billion.
As for 3 billion you buy a luxury apartment, every month you can receive 10 million / month from renting the apartment (deducting taxes and other), a year is 120 million, after 5 years you will receive get about 600 million rent. However, at this time, the price of your apartment has increased by at least 50%. The price of the apartment at the time of buying 3 billion, plus the 50% increase in price (1.5 billion) is the total you have in hand of 4.5 billion if you sell it. This amount plus 600 million from the rental for 5 years, you have 5.1 billion.
Deposit 3 billion = 5 years later, there will be 3.9 billion VND
Buy an apartment 3 billion = 5 years later there is 5.1 billion.
This is just a comparison between apartment investment and bank savings. As for other channels such as securities, land plots, townhouses … that will not be discussed.
Potential and risks of apartment investment
The outstanding advantage of apartment projects is the price. If compared with other real estate products such as townhouses and villas, it is clear that the prices of apartments will be much lower. That is why many people choose to buy an apartment to fit their financial level.
More specifically, when comparing the price, if with an apartment with an area of about 70m2, the price fluctuates in the range of about 2 billion VND, but with the same area, to buy a simple house on the ground, buyers must spend at least 4-5 billion dong, even up to 6-7 billion dong in some places. Because the price of apartments is always at a “comfortable” level, many investors are still looking for this type of real estate.
In addition, apartment projects are often linked with banks and financial credit funds by investors, so borrowing capital to buy apartments has many advantages. Especially in terms of administrative procedures, verification of documents … will be more relaxed with buying other real estate projects.
Moreover, if you decide to invest in apartments, buyers will not only be supported with loan procedures but also can buy a house with many flexible forms such as installments, long-term loans of 10 years, 20 years. years or even 50 years depending on the loan amount. Buyers can choose flexible payment methods along with very favorable interest rates.
Another advantage when investing in apartments is that it is very easy to sublease and rent out at a high price. Unlike land houses with high rental rates, apartments for rent are suitable for the vast majority of people with good incomes because of their moderate prices. In addition, the living space and amenities of the apartments will almost always be better than the ground houses and townhouses. If there is no business need, tenants will prioritize renting cheap apartments and mini-apartments.
Living in high-rise apartment projects, residents will enjoy the best facilities and infrastructure such as community living areas, shopping malls, commercial centers, entertainment and entertainment areas. Children, schools, hospitals are also arranged most conveniently. In addition, the high-class modern apartments will always be fully equipped with fire prevention and escape plans as well as security and safety protection 24/7. These are things that ground houses cannot have.
Risks of investing in apartments- Risks come from investors
When it comes to the risks of buying an apartment, first of all, it is necessary to mention who are the investors, who are the reputable apartment investors, who are the reputable apartment investors and how to find them? The project has an investor to build a prestigious mini-apartment, … are always questions that real estate investors should ask before deciding to sign the purchase and sale of condominiums.
In the age of business tricks, many investors risk everything to sell houses through excessive advertising. Many investors have been dishonest, using tricks to make customers encounter many difficulties. Specifically, the design of the infrastructure layout was promised by the investors, but when it was handed over, the customers were extremely disappointed with the results received.
In addition, there are also investors who promise too much, in order to attract investment capital from customers (in the form of capital contribution in installments), in the end, with weak capacity, they could not continue to deploy but had to restructuring or transferring to other investors, forcing customers to accept the risks they bring.
Risk of input and output prices
Everyone knows that the prices of ordinary apartments are at a reasonable and acceptable level, but there are some projects with prices that fluctuate over time. For example, if the sale is open during construction at a cheap price, many people rush to deposit to buy, causing the price to increase dramatically. At the second deposit stage, the quantity in demand decreased significantly, causing the purchase price to decrease significantly. In terms of investment, those who invested in phase 1 have lost a large amount of money.
In addition, those who buy condominiums for resale will expect a higher cumulative level in the future. However, although the price may increase, but depending on the geographical location, public utilities as well as the investor’s advertising ability, this price will increase quickly or slowly, or even not increase. . Therefore, the return of investment is also partly due to luck.
For those who invest in apartments for rent, they expect a quick return on investment. But to get a quick payback, the rental price must be quite high. This invisibly shrinks the set of sublet customers, limited to those with good income who can afford that rent. Therefore, finding tenants will be more difficult, even landlords have to accept periods of time when there is no collection because there are no tenants.
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