I cut my losses after renting out my apartment for 5 years

March 18, 2024 | 03:00 pm PT
I cut my losses after renting out my apartment for 5 years
Apartments in Hanoi. Photo by VnExpress/Ngoc Thanh
Believing in real estate brokers’ rose-tinted advice, I bought an apartment to rent out only to end up selling it at a huge loss.

Properties have always been considered a lucrative investment by many. I myself have spent many years as one of those who flip properties for a profit.

Five years ago, I decided to buy an apartment in Hanoi with my accumulated savings to rent out and earn some additional monthly income.

Like many others in the real estate market, I harbored hopes of making money from this investment.

However, I realized the harsh reality only after five years of renting out my apartment.

The broker who helped me buy my apartment told me they would find me tenants if I paid them a brokerage fee.

They said this fee would only be incurred in the first year.

However, I later found out that if I did not pay more fees in subsequent years, the broker would quietly encourage my tenants to move to newer, cheaper, and nicer apartments to cut off my source of income.

I also incurred losses due to maintenance and the long waiting time when the apartment was vacant.

Comparing the investment costs and the returns, I could immediately see that this business model was not as profitable as I initially expected.

In reality, many people who buy apartments to rent out are facing similar situations.

They are forced to accept any tenant regardless of the rent just to avoid having to pay for maintenance and various fees every month for a vacant apartment.

When I expressed my intention to buy an apartment and approached the real estate agent, I immediately received numerous calls from people claiming they were looking to rent an apartment.

However, after buying the property, finding tenants became an extremely challenging task and the rental prices were much lower than what I had imagined initially.

I then realized that these were all tricks and schemes of real estate agents and brokers. They might present evidence of rising house prices but they never disclose the low number of actual transactions.

Hearing the information from brokers might make you feel eager to invest in real estate, but in reality, property owners often struggle.

Whether they want to sell or rent out apartments, they will have to accept a price far below the inflated figures provided by agents and brokers.

In conclusion, I just want to share that renting out an apartment is not as simple as the overly optimistic rumors spread around by real estate agents.

You will have a hard time getting a good price while the costs for brokerage, maintenance, and other expenses mount.

The service fees and furniture costs will significantly eat into your profit margin to the point it might even be less than interest on a savings account.

Finally, after five years of trying to hold on to my apartment, I had to sell it to cut losses.

The amount of loss incurred was not small, but if the real estate market had frozen, things would have been even worse.

I have read that recent data shows that the listed prices for affordable and mid-range apartments in Hanoi have increased by about 2% this year.

From 2015 to 2023, the price index for apartments in the capital city has increased by over 80%.

However, like many others, I believe these are just inflated prices that do not accurately reflect the reality of the market.

But what do you think about investing in an apartment to rent out?

Reader Tran Yen Mai

*This opinion was translated into English by AI. Readers’ views are personal and do not necessarily match VnExpress’ viewpoints.

go to top