But there are better opportunities in the region. Investing in Vietnamese real estate is not necessarily a bad idea, and you could make a profit on the purchase. There is a lot of bureaucracy in Vietnam and nothing unique that sets investors apart from the competition. Gross rental yields in Hanoi and Ho Chi Minh City – the return on the purchase price of a rental property before taxes, vacancy costs and other costs – are quite attractive.
We find that in Hanoi, yields range from 4 to 7, depending on the district. In HMC, yields are slightly lower, ranging from 2.6% to 6.3%, again depending on the district. Round-trip transaction costs are low in Vietnam. See our analysis of property transaction costs for Vietnam and property transaction costs in Vietnam compared to the rest of Asia.
The first way to acquire real estate in Vietnam is to establish a wholly foreign-owned company. By establishing a foreign-invested company (“FIC”), you can acquire either houses or flats. In this case, the purpose should be to provide housing for company founders, members and employees. The increasing demand for real estate in all categories, including residential complexes, offices, serviced flats or hotels, creates incentives for developers to continue investing in the Vietnamese real estate market.
A video is worth a thousand words, so here are two videos that illustrate and further explain real estate investment in Vietnam. Recently, foreign “fintech companies have enabled expatriates or investors to benefit from loans to invest in real estate in Vietnam. Overall, the number of foreign investors who are optimistic about the Vietnamese property market is growing tremendously. Foreign investors can own up to 100 ines of foreign-owned businesses in Vietnam, and there are now no minimum capital requirements to start a real estate business in Vietnam.
There are many reasons to invest in Vietnamese real estate now and not wait until it becomes less complicated – apart from the fact that barriers to entry are currently keeping asset valuations low. There are a few things to consider when investing in Vietnamese property, which are listed below. Some of the fees and costs to be aware of as a foreigner when investing in Vietnamese property are as follows. Now let’s move on to the main topic of today, “Why it is not good to invest in Vietnamese property”.
While there are some advantages to investing in Vietnamese property, the disadvantages outweigh them. Property investment in Vietnam does not promise crazy returns, but if you want a stable return, this is an optimal solution. Below are some of the main risks of investing in Vietnamese real estate. In any case, you would be part of a great investor movement, as foreign investment in the Vietnamese property market has increased in recent years.