How to invest and exploit leasing market for foreigners efficiently?


How to invest and exploit leasing market for foreigners efficiently?

Being considered as “magnet” attracting foreign direct investment (FDI), in recent years, the number of foreign experts coming to live and work in Vietnam is growing. Accordingly, foreigners demand for luxury apartments is increasing and becoming an attractive investment channel.

Ciputra Hanoi – The best large-scale international township in Hanoi of 301 hectares

Profit of real estate for lease is leading the Southeast Asia. According to statistics, more than 320,000 foreigners are living and working in Vietnam, mainly in Hanoi and Ho Chi Minh City. By 2017, the number of foreign direct investment funds in Vietnam reached nearly USD 36 billion, up 44.4% in comparison with the same period in 2016. This is also the highest increase in 10 recent years. 115 countries and territories have invested in Vietnam with nearly 2,600 new projects granted investment certificates. The greater the funds attract from foreign direct investment, the greater the number of foreign experts (by projects) comes to Vietnam.

With the thought of just renting houses for work, the number of foreigners to Vietnam mainly rent luxury apartments because they have higher incomes and living standards than those of  Vietnamese. These apartments are fully furnishedfor residents. They are equipped with enough basic furniture and equipment, so the rent is usually from USD 1,000 to USD 1,500/ unit/ month. The increasing number of foreigners living in Vietnam is a major determinant of the large demand for rental units. Leasing investment for foreigners becomes a profitable investment channel in Vietnam.

In the recent Savills report, apartment rental rates in Vietnam are leading the Southeast Asian, double Singapore and 1.7 times higher than Bangkok. In term of high-end segment, the number of buyers of apartments for rent and investment accounts for a quite large proportion. According to Mr. Paul Mason, President of Keller Wiliams Vietnam real estate brokerage firm, the renting demand for high-end apartments has risen sharply and leasing market has grown rapidly and has become a highly profitable investment channel in comparison with gold, foreign currency and savings. This method is suitable for investors with idle capital and not adventurous.

Steps to help leasing marketing successful

In order to earn from high-end apartment leasing, investors should pay attention to conditions such as location, project size, progress of exploitation, services and utilities.

According to real estate professionals, good location is a place where there is a well-connected, convenient and fast transport infrastructure linking the capital’s major centers of entertainment, leisure, education and health, etc. Investors should pay special attention to select projects located in the area with vibrant leasing market. Good location can be a decisive factor for 50-60% success of leasing investment. In Hanoi, the areas where foreigners are mainly focused are West Lake, Ciputra Hanoi, Van Phuc – Van Bao and etc. According to sociological survey, these areas have good infrastructure with convenient traffic system and near the commercial centers. In addition, a number of prestigious international school systems with modern education are focused largely in the Ciputra Hanoi Urban Area, which makes this area a top priority when finding out a rental location by the foreigners.

The scale of the project and the progress of exploitation are paramount in considering the location for investment in leasing and have a direct impact on the maximum rental yield. Smart and experienced investors will never spend money on small and unprofitable projects and projects non-commited hand-over progress with customer because it impacts on their investment cash flow which cannot or delays profitability for a long time. In Hanoi, finding a reliable project for investment seems not be easy because not every developer has the financial capacity, reputation and construction progress always guaranteed. Most of these are emerging, small-scale and no long-term plan projects.

Considering these factors, it is easy to recognize the real estate brand leading the construction of the first-large enclosed urban area, which is Ciputra Hanoi, a company with nearly 20 years of establishment and development. Up to now, Ciputra Hanoi has been the home of more than 7000 residents from 74 countries – this is a metropolitan area with the largest international community in Hanoi. With an area of ​​300 hectares, of which 77 hectares is dedicated to green space and water, more than 100 hectares is for infrastructure and facilities, more than 800 villas and nearly 2,000 apartments are considered as an urban area with fully attractive and profitable investment potential with understanding and strategic investors as the urban land fund for synchronous closed urban area is not much.

Density of trees in Ciputra Hanoi is equivalent to the greenest island in the world, Singapore

The last but extremely important factor is the system of utilities and services at the place for lease. For tenants as foreigners, they are particularly interested in meeting their needs of education, health, shopping (for family), entertainment, sports and cuisine (for both family and single travelers). Therefore, a fully furnished apartment is not attractive enough, but services and facilities are really pulling factors attracting tenants to make decision. Most of the serviced apartments/residences in Hanoi are in the private model or management, so the synchronous construction of services and utilities is not advantage of these facilities.

Ciputra Hanoi – an international urban area with more than 30% of foreign residents is a clear demonstration of a high standard of living and services that meet the stringent requirements of international residents. Ciputra has been managed and operated by a foreign management board for almost 20 years with a professional public asset management team and is available for 24 hours a day. They include strict three-class security guard system and 5-star hotel reception service. International residents can be satisfied with a full range of various facilities that provide to all needs namely: 5 famous international schools such as: UNIS – United Nations International School, Hanoi Academy International Bilingual School, Singapore International School, Kinderworld Kindergarten, Sunshine House, etc. At the sports, entertainment and cuisine complex of 11.000m2 Ciputra Club, the tenants will have the best experience. In addition, the system of 27 convenience stores with diversified items, health and beauty salons, coffee shops and fast food restaurants will contribute to creating a comfortable life for the tenants when living here.

11.000m2 Ciputra Club sports, entertainment and cuisine complex

According to experts of real estate, only understanding the above “know-how”, investors will certainly be successful with the all types of leasing for foreigners in Vietnam in general and in Hanoi in particular.