What real estate asset should I invest in with $82,000?

January 4, 2024 | 09:31 pm PT
What real estate asset should I invest in with $82,000?
Real estate in Binh Chanh District, HCMC, in October 2023. Photo by VnExpress/Quynh Tran
According to the expert, with a budget of VND2 billion and no additional loans, you can choose to invest in land plots and apartment units on the outskirts of cities.

Question from reader Thanh Thuy:

My family is currently living in Ho Chi Minh City and we have a stable income with savings of over VND2 billion (US$82,051). I have been depositing money in the bank, but due to low interest rates, I am considering withdrawing it to invest in real estate.

I have seen quite a lot of information about real estate being sold at a loss or reduced prices recently, but I am hesitant and unsure about what types of investments would be suitable with this capital. My main goal is to accumulate assets and wait for the market to improve in about two to three years, then sell for a profit if the prices increase.

I am not considering taking out any loans at this time. Can an expert advise me on what types of real estate would be suitable and which areas might be good to consider with this budget? Thank you.

Advice from Dinh Hoang Thang, Senior Manager at PropertyGuru Vietnam Joint Stock Company, a property technology company:

Hello, from your question, I understand you have a cash reserve of VND2 billion, are not interested in utilizing additional borrowed funds, and are looking for real estate investments that are currently priced significantly lower than in previous periods.

Recently, real estate prices have been adjusting to more reasonable levels. We've seen a decrease in secondary market prices across various segments, including land plots, residential properties, and villas.

However, giving advice on bottom-fishing is very difficult, as predicting the market’s peak or bottom is essentially personal judgment.

Every real estate category has its potential in the market, influenced by various factors and policies at different times. Therefore, if you have sufficient cash for investment and are interested in buying real estate, you should not focus too much on whether the property's price is at its lowest. You can make a purchase as soon as you see a reasonable price.

Your main objective is to hold onto the property until its value increases and then sell it for a profit. With VND2 billion available, you have a wide range of investment choices in the current real estate market. Here are some suggestions you may consider:

Firstly, if you are considering investing in land plots or independent houses in Ho Chi Minh City, your options will be relatively limited with a budget of VND2 billion. You would need to consider areas on the outskirts of the city, such as Binh Chanh District, Hoc Mon District, or District 9.

In these districts, you might find land plots of about 35-40 square meters priced around VND2 billion. Currently, investors who have the cash ready have the higher ground in price negotiations so the opportunity to buy land at a lower price is quite high.

However, you need to be aware that these land plots will be far from populated areas or in areas where infrastructure and public services are not yet developed.

If your investment is purely speculative, you should be prepared to wait for a considerable duration, potentially three to five years, for these areas to develop and become more vibrant.

If you are open to considering provinces around Ho Chi Minh City, you will have a more diverse range of choices in both area and location. After a period of sharp increases, the prices of land plots in many nearby areas like Ba Ria - Vung Tau, Binh Duong, Binh Phuoc, Long An and Tay Ninh provinces have decreased by an average of 10-20% compared to 2022.

With a budget of approximately VND2 billion, you could purchase a land plot ranging from 100-120 square meters, 60% of which is partially designated for residential use, in already established residential areas.

For long-term investments, you might consider land plots near rapidly developing industrial zones, such as those in Phu My and Chau Duc districts (Ba Ria-Vung Tau Province) or those in Ben Luc and Duc Hoa districts (Long An Province).

Projects in central Ba Ria-Vung Tau and Long An average VND16-25 million per square meter, equivalent to around VND2 billion per unit.

If you are willing to move further towards Phan Thiet City’s Mui Ne Ward, there are also many land plot projects priced at VND2.2-2.5 billion per unit.

These areas have long-term potential for price increases due to robust infrastructure development. For these types of real estate, you will need to wait a considerable amount of time to achieve a substantial profit margin.

Secondly, with a budget of around VND2 billion, you can consider buying some apartment products, either a one-bedroom or studio apartment, in non-central areas of Ho Chi Minh City. These are listed by sellers who are heavily reliant on borrowed capital and are now under financial pressure to make fire sales.

However, for standard apartments, VND2 billion is hardly enough to purchase a unit in new projects without a loan. From 2021 to the present, the price of secondary-market apartments in Ho Chi Minh City has also increased significantly, averaging over VND2.5-3 billion per unit. Old apartments launched in the last five years, with an area of 55-60 square meters and good transport connectivity, have also doubled in price a few years after completion and issuance of title deed.

To invest in apartments below VND2 billion, you might have to look towards the industrial hubs of Binh Duong, Dong Nai, which are 15-20 km away from Ho Chi Minh City.

However, many older apartments, those over 8-10 years old in the suburban districts such as District 8, 9, 12, Thu Duc, are still quite reasonably priced, even as low as around VND2 billion for smaller units. These can be purchased and immediately rented out to generate a regular monthly income. But such apartments often lack modern amenities and quality and have fewer factors driving up their prices.

Townhouses built on 50-75 square meter plots in Ho Chi Minh City are typically priced at around VND3.5-4 billion. Even those that need to be sold quickly are often about VND2-3 billion, which is still beyond your budget.

But with diligent searching, you could find smaller independent houses in residential areas of Thuan An and Thu Dau Mot cities (Binh Duong Province), or Nhon Trach, Long Thanh and Trang Bom districts (Dong Nai Province).

Also, with this budget, you can consider buying other types of real estate suitable for both rental investment and weekend getaways in some projects located in Ho Tram and Long Hai towns (Ba Ria-Vung Tau Province), Phan Thiet City (Binh Thuan Province) or Nha Trang City (Khanh Hoa Province), though your choices will be limited.

These options are listed here to help you visualize and consider your investment choice. I hope you find the appropriate real estate asset to invest in.

*The question and answer were translated into English by AI.

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