Resort real estate and apartments, which one to invest in?

To invest in resort real estate or apartments in cities is a thorny question for investors. Even savvy investors would be nervous to answer such a question. Though the interest rate of resort real estate is tempting, especially for condotels and resort villas, many investors still feel uncertain about mixed opinions on the subject.

1. The attraction of resort real estate 

Resort real estate has been an attractive investment in recent years. Experts say the Vietnam tourism industry, and resort real estate segment, will be dynamic in the coming years.

Resort real estate’s attraction

1.1. Strong growth potential

The country of Vietnam, with a coastline of 3,260 km, is endowed by nature and has a pleasant climate. A beach with pristine beauty and free from natural hazards is an ideal location for local and international investors.

Hospitality is likely to grow in such a place

Vietnam has presented itself as a safe destination for international tourists, after success in controlling the spread of Coronavirus and supports of expatriates in 2020.
To relieve pressures is extremely necessary today, especially when the living standard of the Vietnamese has been gradually improved. Thus, demands for entertainment and relaxation are increasing, so do the resort real estate segment.

Demands for entertainment and relaxation are increasing

As for Ho Tram Beach, it has a prime location: only 2 km away from Ho Chi Minh City (which is perfect to be a second home, relaxation place for weekends). What’s more, the accessibility to the area will be increased thanks to the construction of Long Thanh International Airport and expressways to connect Vietnam’s southeast provinces with southwest regions. Ho Tram condotels and beach villas have become a “hot” investment package recently.

Rest at a luxury resort is what everyone desires.

1.2. High interest rates

Resort tourism investment projects usually commit to yielding an annual profit of 5-7% from the first 2 to 4 years. Thus, investors can rest assured that the profit will be stable from the start. 
These projects all have an effective marketing campaign, which brings domestic and international customers and increases occupancy rates.

Investors rest assured when investing in resort real estate

According to statistics, after 2 or 3 years of operation, resort real estate would come to a “stable phase”, with annual profit from 8-10%. The possibility of an increase in profit generation also depends on the resort operator. That is to say that the higher occupancy rates, the more profit is generated.
Operational mechanisms, policies, rental rates, promotions, and service quality are some of the most important factors in assessing the ability of the resort operator.

1.3. No management time

Regarding real estate for lease, time and costs to find tenants are what concern investors. Besides, there are risks to renters and equipment.
As for resort real estate, all of the above-mentioned are taken care of. And the information is regularly updated and transparent to investors, except for the reasons of force majeure affecting the resort, otherwise, problems will be quickly resolved by the management board.

Less time for management work, more time for self-enjoy.

In addition, occupancy rates are all optimized. Ensure the maximum source of revenue and profit for investors

1.4. Luxurious experience

Depending on the regulations of each project, when the investor owns a resort apartment, investors can assign the property to the management board to exploit or to use it for personal needs of relaxation.

Resort tourism is one of the most meaningful gifts.

Not only receive the profits, but investors also have a certain time to experience at their own apartments and villas. A short stay here can also be a precious gift that investors can give to friends and relatives.

1.5. Mixed opinions

In recent years, there have been mixed responses to investment in resort real estate and resort villas. But from the perspective of savvy investors, the starting point of the problem is from the developer side: legal frameworks, unclear agreements, lack of financial capacity to complete the project, etc. these issues give investors real headaches.

Choosing a reputable developer is the first step to success.

It is necessary to observe and evaluate more about the project. With reputable developers who have strong financial capabilities, investment in resort real estate is the safest and most effective investment package today. The ability to complete the project on schedule mainly depends on the financial capacity of the developers.

2. Investment in urban apartments 

In previous years, investing in rental apartments was a safe investment option, particularly in Ho Chi Minh City. But now, the rental apartment market in Ho Chi Minh City alone is more diversified in terms of price and location. Is this still a potential investment field?

Whether investing in apartments will bring much profit in the coming time?

The market today
In late 2020, it took an average of VND50-80 million per sqm to invest in an apartment project in HCMC, but the profit yielded just around 4-5% a year. 
The number of apartments was handed over in the last 6 months of 2020, according to statistics.

• One Verandah - District 2: 779 apartments 
• D’Edge Thao Dien - District 2: 273 apartments
• Thu Thiem Dragon - District 2: 274 apartments
• The Western Capital - District 6: 233 apartments
• Eco Green Saigon HR1 - District 7: 4,000 apartments
• Ascent Lakeside - District 7: 217 apartments
• Hung Phuc Premier - District 7: 192 apartments
• Urban Hill- District 7: 164 apartments
• Lavida Plus - District 7: 1,212 apartments
• Conic Riverside - District 8: 664 apartments
• Safira Khang Dien - District 9: 1,570 apartments
• The Rainbow Vinhomes Grand Park - District 9: 10,343 apartments
• Centum Wealth - District 9: 518 apartments
• Sunwah Pearl – Binh Thanh District: 900 apartments
• 152 Dien Bien Phu - Binh Thanh District: 234 apartments 
• Akari City - Binh Tan District: 4.600 apartments
• Carillon 7- Tan Phu District: 625 apartments
• Orchid Park- Nha Be District: 520 apartments
• Saigon Intela - Binh Chanh District: 1068 apartments

Only in the last 6 months of 2020, more than 28,000 apartments were handed over. This number has no signs of stopping, with such a massive supply rate, it is likely to exceed demand in the coming period, or profits for secondary investors plummet and, most importantly, lower liquidity makes transactions difficult.

Above are some of the information that Arental.vn shared based on our own experiences and perspectives. Depending on the opinion and assessment method, investors can make safe and reasonable investment decisions.
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