Should I borrow a billion dong from a bank to build a room for rent?

I live in Da Nang and am renting a house, raising small children, doing freelance business with unstable income. Last year, I spent most of my savings to buy a plot of land located on a relatively large and busy road near the center. This year, the business situation is more difficult, thinking about having land and still staying in, I feel a bit wasteful. Therefore, I am confused before deciding to build a house for both living and renting.

I plan to spend all my money save about 150 million VND, borrowed from relatives about 400 million VND and borrowed another billion VND from the bank to build a 4-storey house: the ground floor is for living and the upper 3 floors can build about 10 motel rooms for rent. because the land area is a bit small, about 74 m2).

According to my own research, this area usually rents for about 1.5 million VND a room with a mezzanine (during the epidemic). Most of them always have tenants because this area is busy, big roads, convenient transportation, near the center. I think this period, room rates may be higher. If the ground floor is not lived in but rents out as a space, I can get an additional 5 million VND per month.

The problem lies in bank loans. The counselor said that I can choose another loan package, not the usual 20-year package. According to this friend, the 20-year package only has preferential interest rates for the first time. I should borrow under the business support package with the interest rate of 6.5% a year, the maturity is 2 times a year with little extra cost and the bank will give maximum support on the maturity part. The overall cost if following this package is still more attractive than the normal 20-year loan package, and is proactive in paying back the principal (collecting a lot of principal in 6 months can pay a lot to reduce the interest according to the reduced outstanding balance). gradually rather than fixing the principal like the other 20-year package).

I don’t have any experience with the above 2 issues, looking for advice. Thanks everyone!

Nguyen Thi Hong