Time-limited real estate investment: New business problem

In the context of long-term real estate that does not meet the market demand, time-limited real estate is getting more and more attention from investors.


Catch the new trend


Time-limited property ownership is becoming a new trend among investors. The reason is partly because the supply from long-term real estate is increasingly limited. Long-term real estate is no longer the only option of investors, instead of apartments, commercial and serviced apartments, resorts,... with a term of ownership of 50 years or 70 years.


At the seminar "Trends in property ownership: International experience and practice in Vietnam" has just taken place, Prof. Dang Hung Vo, former deputy minister of the Ministry of Natural Resources and Environment, said the land-use regime with a definite term had the advantage of making land users more responsible, always wanting to use it fully within their time limits. They have spent money to use land, avoid land speculation and accumulate financial resources into the land.


When ownership is no longer a matter of top priority, investors turn their attention to the quality of real estate. For real-time property, investors often pay special attention to factors such as cost, quality of works or synchronous infrastructure...


In terms of investment costs, CBRE Vietnam's senior director, Ms. Duong Thuy Dung said, most of the real estate with a term comes from the resort segment and this segment only has luxury or high level of medium. Granted, almost no ordinary people. This makes the cost of capital quite high.


“However, the occupancy of these resort products is very good. Products such as condotels are rented by the day and the prices in peak seasons, weekends,... are adjusted very flexibly. If there is an additional professional management unit, the rental price may be 10 - 15% higher and therefore, investors are willing to accept higher costs because the profit is usually better than renting for transmission apartments", Ms. Dung said.


Tourism industry development helps tourism real estate accelerate


Among types of real estate with current term, the tourism and resort segment is receiving a great attention.


Real estate tourism and resort are helping investors to profit


The strong growing tourism industry is a solid foundation for investors to safely deposit their pockets.


According to information from the Vietnam National Administration of Tourism, in the last 6 months of 2019, Vietnam's tourism continues to promote and grow in terms of international and domestic tourists.


Customers investing in tourism and resort real estate are often supported with the most convenient financial plan for cash flow management. For example, the investor of a resort offers a customer support policy with an interest rate of 0% for 12 months, an 85% profit share of the investor for a hotel apartment. Or the policy of 0% interest rate support for 12 months for villa products, villa owners and hotel apartments is expected to benefit greatly from the tourism service industry.


Thus, if it goes smoothly, within 1 year, investors are not under financial pressure and only wait for their products to increase prices or use cash flow from 60% of the remaining value of the products (should be payments must be made during this period) to invest in facilities or turn around the capital. The above profit problem is an example of the benefits that tourism, resort real estate products can bring to customers.


It can be said that the large tourism market is "carpeted" for tourism real estate to accelerate development, promising to bring many profits to investors.


According to Nhu Loan