I can’t wait to collect money to rush into the silver fever, bury my face and hold a grudge for 10 years
10 years buried capital
In 2009, the land fever swept many places. Thanh and his wife (Hanoi) were also eager to calculate and invest in land to make a profit. With a capital of 200 million dong, she and her husband borrowed another 300 million dong from the bank, to buy a piece of land of 80m2 in Thanh Oai, Hanoi. However, she did not expect it to be a wrong decision that made her regret for 10 years.
According to Ms. Thanh, she and her husband are just side-by-side investors, do not have much knowledge and experience in real estate. Therefore, the choice to invest in that land was mainly told by acquaintances and in fact, she and her husband saw that their investment had made a profit. In the beginning, the newly purchased land had a higher price. Given that the price could still go up, the couple did not sell.
However, things reversed quickly after only a few months. Land price turned to go down, transactions in that area gradually became sparse and fell into illiquidity, although later on, the price dropped sharply. Ms. Thanh and her husband, as well as many other landowners, are selling to cut their losses, but they can’t find buyers.
She still remembers as in 2010, 2011, the interest rate on bank loans “escalated”, her husband and wife had to “pay back debt” for the loan to buy land. After 5 years of persistently unsuccessful selling, the debt has also been paid off, the couple is so bored that they decide to forget the land.
However, by 2021, land fever will return. The land that Thanh and his wife bought in each year was crowded with people asking to buy. “My wife and I sold it for 1.2 billion, making a profit of 700 million dong. Looking at that profit, many people think it’s a lot, but compared to more than 10 years of waiting and boredom, compared to bank interest rates and opportunity costs, my wife and I are still at a loss, “said Thanh. .
Similar situation is Ms. Trang (Hanoi). At the end of 2018, she and her husband bought a piece of land of 50m2 in Chuong My (Hanoi) for 200 million VND. Stage wave crest, this land was paid up to 450 million but she and her husband did not sell. However, after that, the price of land dropped dramatically, her land “falling” down to 100 million VND. Because she doesn’t have to borrow from a bank, she and her husband do not intend to cut losses.
Land prices have only increased slightly over the years. 8 years later, someone bid 150 million dong, she and her husband also wondered if they wanted to sell it to get capital to do other things. However, after thinking carefully, both saw that the amount of 150 million was not enough to invest in anything, so they decided not to sell at a loss.
Earlier this year, Trang and her husband sold the land for 700 million VND. She said: “We feel lucky because the land fever has returned to be able to sell the land at such a price. Despite being profitable, the depression that persisted for so many years made my husband and I tell each other never to buy land during the fever again.
Anticipate risks to avoid “swinging”, burying capital
According to real estate experts, plunging into the “land fever” race to make a profit is very risky for side-by-side investors. Because they have no experience, it is likely that they will “slow down”, that is, enter the market at the “peak of the wave”. Or maybe they entered the market not too late, but because they see the price of land being paid very high every day, it will be difficult to make a decision to close the sale because they think the price is still going up.
In fact, the price of land has peaked, then it will recede and turn down. “Earth fever” passes very quickly, especially in areas “virtual fever“, investors who do not sell in time are likely to have to cut their losses very deeply or lose their liquidity, and put up for sale without buyers.
Therefore, before deciding to invest, real estate investors need to spend time learning about the history of land price growth in that area. For areas where the price has risen to 40-50%/year or increased by times, you should not participate because of the great risk.
In particular, be cautious if you borrow from a bank to invest in real estate during a fever. It is advisable to take into account the problem of floating interest rates and how long the interest payment tolerance will be to anticipate the pressures or risks if the land cannot be sold, which has been buried for many years but still has to pay interest.
Thuy Minh
at Blogtuan.info – Source: vietnamnet.vn – Read the original article here
