Real estate investment is divided into different types, each type of investment has different advantages and disadvantages. Let's review these types of investment with AHS.
Apartment investment
Investing in apartments is a type of business that attracts many investors. There are flexible payment methods. And many installment policies with preferential interest rates to support buyers. Create favorable conditions for buyers to easily own apartments even if they do not have enough accumulated capital.
Advantage
Flexible payment methods: usually investors will have policies to support customers regarding payment terms.
In addition, this is the only type of real estate that supports installment payments, or is linked with banks that support loans with attractive interest rates.
The demand for housing is increasing: the population is increasing over the years, along with the average income of the people increasing, leading to the need for a place to live with full amenities is inevitable.
Investors can buy and invest in rental form.
Good liquidity: Investing in apartments can generate quick profits through the form of "surfing" investment. If renting out for secondary apartment investment, the ability to generate profits will be regular and stable every month.
Disadvantages
Many apartment projects are overvalued. The price cycle increases slightly, with few sharp fluctuations. Investors need to spend a lot of time to understand the market.
Townhouse
In addition to the type of apartment real estate investment, a form of real estate investment that many investors choose today is townhouses. This is not a new type of investment but has not cooled down because the demand is always good.
Advantage
Townhouses can be used for both residential and business purposes or for rent. Thus, it can be seen that the value of investment in townhouses is quite high. High demand, especially in areas with beautiful locations in the city. Stable monthly income is better than other types because the demand for renting townhouses for business is always there. Legality is often guaranteed more clearly and completely than land investment.
Disadvantages
The investment capital is much higher: the price of townhouses is often much higher than that of houses in normal alleys. In particular, townhouses on large roads and in beautiful locations have higher prices. Difficulty in making papers to separate the book because of the small area. Low liquidity depends on fluctuations in the real estate market, making it difficult to adjust prices as desired.
Investing in "land"
Land investment is a type that has been around for a long time but is of interest to many investors because of its high profits. As land funds are increasingly limited, land ownership in big cities is increasingly limited, investors, especially those with little capital, often look to the suburbs to invest in land. This type has many advantages, however, it also has many potential risks for investors.
Advantage
- One of the most potential, low capital investment types today.
- Expected profit is 2-3 times higher than bank interest rate.
- Profitability and liquidity are better than townhouses, especially in areas with complete infrastructure. The profit of land in 1 year is usually not lower than 15%.
- The possibility of this type of asset falling in price is quite low because it is less affected by the market growth cycle.
- Urban land funds are increasingly limited, land resources do not increase, creating conditions for land investment to develop strongly.
- It is a type of investment that is less influenced by the virtual value of advertising.
- If the land has a red book, the bank will appraise the loan price from 50 - 60%, even at the highest level reaching 70%.
Disadvantages
Because it is so hot, brokerage companies often take advantage of it to scam. The legality of some land areas is still unclear, making it easy for investors to face risks when investing. The more beautiful the land location, the higher the liquidity, the more expensive the price, losing a lot of investment capital. On the contrary, if the location is not beautiful, it is often difficult to sell, and capital must be "buried" for a long time. Land only really grows if it is located in an urban development area, with synchronous traffic infrastructure, developed regional economy, and well-planned.
Resort real estate
Slow and steady real estate Although this type of real estate investment has only recently gained attention, it is still the trump card for investors who prefer “slow and steady”. Because our country’s tourism industry is a key economic sector, it is increasingly accounting for a high proportion of domestic industries. Therefore, it leads to the development of resort real estate investment to meet the accommodation and relaxation needs of tourists.
Advantage
Resort real estate can be used for both living and business purposes in the form of self-employment or leasing to a business party. Quite unique compared to other types, it possesses a lot of potential that other types of investment do not have. It has a strong attraction among investors because of its long-term profitability. The committed profit level of this type is from 8 - 14% lasting from 8 - 10 years. According to records, the number of tourists is increasing due to the development of society. At the same time, the number of international flights has been improved, creating a large source of revenue for this type of resort real estate investment.
Disadvantages
Profits depend on the fluctuations of the tourism market. High investment capital depends on the tourist destination because resort real estate, especially those with sea views or on the coast, are often very expensive. Resort real estate often faces many legal difficulties.
Cemetery Park
Cemetery park investment is a new type of real estate investment but has created a lot of attraction for investors because it brings many practical profits. This type of cemetery park real estate investment has been popular in the world for a long time, but in Vietnam, this type has just started to flourish in neighboring provinces of Hanoi and Ho Chi Minh City.
Advantage
This type of niche market investment is not affected by the real estate cycle. High profits, some projects record profits of up to 40 - 100%. Supply is relatively low but demand remains unchanged. Investment capital is affordable and products are diverse. Investors will often be supported by investors to liquidate their products. Open mechanisms and legal corridors. The increasing quality of life and the Vietnamese people's philosophy of always returning to their roots, wanting to take care of the resting place for the deceased create potential conditions for the development of cemetery real estate investment.
Disadvantages
The risk from investing in cemetery parks is almost very low or non-existent. It is affected by the state planning factor. The investment concept of Vietnamese people is still quite hesitant towards this type of cemetery park.
Above are the advantages and disadvantages of different types of real estate investment. Please continue reading part 2.
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If you are interested in the real estate sector, please contact AHS immediately for advice and answers to questions, and together to develop a strategy to invest properly to generate high-value profits.
