What to invest with 500 million – 1 billion dong?
This is a question of interest, because many people have accumulated this capital, but wonder where to start, how to limit the risk of burying capital and losing capital?
At a recent investment forum organized by Forbes recently, Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Investment Joint Stock Company, said that investing in real estate is difficult with VND 500 million – 1 billion. There are products on the market, but they are not popular. Accordingly, investors can use leverage to borrow another 500 million dong – 1 billion dong to have a capital of 1-2 billion dong, easy to choose investment products. However, with this amount of money, how should you invest?
Mr. Quang said that you should invest in products you like, that is, real estate that buyers can go back and forth in that area, the plot of land may be far but close to that local center. For example, investors can return to their hometown, find and buy land about 200m from the Commune People’s Committee, which is feasible, easy to buy and sell.
“If you are in the city, this is a good opportunity to buy an old apartment, this is a neglected market. For example, in Tan Phu, Binh Tan, a new apartment sells for 50 million VND/m2, which is higher. 40-60% compared to the old apartment with the price of 25-30 million VND/m2. Now is a good opportunity to buy an old apartment for 1.5 – 2 billion VND/apartment”, Mr. Quang assessed.
According to Mr. Ngo Quang Phuc, CEO of Phu Dong Group, with VND 500 million – VND 1 billion, many people choose to buy land in the suburbs, but because the price is now high, many people choose to join forces to invest. This is risky if there is no consensus among the investor group.
“It is possible to buy mid-range apartments at affordable prices. Products are lacking, while the investor is having payment methods to support besides 20% of the initial investment. If you wait to have enough 2 billion, go. If you buy, you lose. Pay with your borrowing capacity,” suggested Mr. Phuc.
In addition, CEO Phu Dong also mentioned investment in rental real estate. This position, when buying any rental property, must be based on the level of benefit generation from that real estate, which is the basic foundation for thinking about investment. For example, buying a 2 billion apartment must be rented for 10 million VND/month, 3 billion apartments can be rented for 15 million VND/month.
“Buying an apartment has two values, one is exploitation and the value of the apartment increases. Any apartment that can be rented for 0.5% of the value can be bought,” said Mr. Phuc.
Meanwhile, Mr. Vo Huynh Tuan Kiet, Director of CBRE Vietnam, said that investing in any field, investors need to learn carefully about that field. Investors also need to understand their investment expectations and risk tolerance.
“In terms of high risk and high return, digital assets are probably at the top, can increase up to several thousand %. For investors who prefer safety, they will choose real estate. To join the real estate channel, The financial balance will be high, if the stock investment can participate with a few million, tens of millions of dong, real estate is suitable for people with a few hundred, several billion or more capital. Real estate can be highly profitable, but it can also be immobile for a long time. Investors need to prepare for such a situation,” said Mr. Kiet.
According to CBRE experts, this is the time if you invest in the townhouse market in the central area, it will be easier to choose the best product today. Currently, the price is quite low compared to before with a relatively large supply, choosing a townhouse is quite easy.
The second is the land in the periphery. The product is not necessarily 30-40km from the center, but only needs to wait to increase the price, need a lot of information and market factors. Maybe Bao Loc, Dak Lak, Ben Tre, Can Tho. The most important is what information helps the product increase in price.
Mr. Kiet also pointed out that making quick profits from the difference in buying products in the primary market no longer takes place on a large scale.
“There is a period in the market, when any project is launched, investors are competing for the right to buy, then there is a stage when investors can buy and sell to people who want to buy but cannot buy in this period. The difference between F0 and F1 is from 50-100 million VND, even more. Currently, the handover is not much, does not happen on a large scale, only in a few areas, a few large projects, “Mr. Kiet said. know.
Common mistakes when real estate investment?
Referring to the mistakes of real estate investors, Mr. Vo Huynh Tuan Kiet pointed out 3 common mistakes.
One, an investor encounters an investment case but doesn’t understand it at all. Investment follows the movement. For example, invest in Bao Loc land but do not know the location of the land.
Second, investors often focus on how much money they have when investing, but the important thing is cash flow. There are investors who stick to an attractive initial investment, but when they expect to sell quickly but can’t, the cash flow is out of control, the next payments can’t be paid, the income doesn’t follow. that investment, leading to possible loss of sales.
Third, profitability, exploitation in the medium and long term but the expectation of buying and selling quickly, does not match the market, has to hold goods, or happens to be caught up in land fevers that cannot run in time.
“If you want to invest anywhere, it’s important to understand what to invest, if you don’t understand what potential location or land price is, don’t invest. with their financial ability, low finance, high expectations, easy to get trapped in investment.Three, should have an information network, have relationships with brokers to grasp information, investment is information, grasp more The more you have, the higher your chances of winning are,” said Kiet.
Mr. Ngo Quang Phuc stated, the most important thing in real estate investment is legal. Investors need to understand simply, if they go to buy products from a real estate company, they need to find out if the project has a construction permit, if so, then feel secure. If you buy an individual house, you need to ask to confirm the status of the house, you can give the book to the notary office to check – this is where there is full information about the property, they check if it is ok, then they can make a contract purchase.
“Invest in the movement and forget the important factor is the legal issue, listen to it over and over again but still encounter it. The apartment does not have a book, don’t touch it. Second, buy the project product, the investor does not make a pink book. , investors must avoid. If the investor can do the legal work, the real estate price will increase. later,” noted Mr. Phuc.
According to Mr. Tran Khanh Quang, real estate is a product of great value, should not simply buy but focus on investing, and ultimately exploiting efficiency. It is necessary to consider the factor of exploitation efficiency, when doing this, the investment cannot lose. For example, a 100m2 land lot that can be used for accommodation will be worth about 15 million VND/m2, if the seller costs 7-10 million VND, he can buy it.
Quang pointed out that only professional investors dare to invest in land in the suburbs, new investors are very careful because it is not an easy dish. When investing in land plots, it is necessary to understand the space of that area, the market, the connection of the infrastructure, whether there are any business projects deployed, and importantly, the legality and the correct purchase price.
“Investors run 3-4 hours to Ho Tram, Binh Phuoc… see that the price is about 1-3 million / m2 and think it is cheap but forget that locals sell only 500,000 VND / m. Or many times when buying land with a book red but in the planning, buy and then have to leave it. If you are not an expert, you have to practice professionally, spend 3-4 days to learn and then put down money Real estate is a product of great value, with attributes in terms of price, value, sales force, should not buy because of liking.Most 70-80% buy because they like”, CEO Viet An Hoa shared.
Mr. Quang also mentioned the movement of buying a second home, which flourished after the COVID-19 epidemic. This expert said, about 50% of people want to buy land or a second house. Although the supply of real estate is higher than the demand, consumption is still good due to the tendency to buy a second house or even a second home. 3rd house increased.
“However, it must be understood that it is the second apartment, not the first, if you are staying at your parents’ house, you should not buy it. Buy to relax, not speculative surfing. Considering natural factors, infrastructure Social, service, buying factors but weak management unit, must hire someone to take care of that house is not recommended.The movement takes 18-24 months to be boring, the 2nd house can become a burden. According to the principle that the second apartment is to enjoy, consider it as a liability, you must choose the most beautiful and best one, the latter will still find it beautiful to sell at a good price, “said Mr. Quang.
Finally, Mr. Quang noted two important factors that are often overlooked. One, don’t buy “orphaned” real estate, buy “light” real estate.
“Orphaned real estate is having plots of land, a single project that cannot connect to the region, a project that is 1km away with nothing at all cannot be developed. Second, buying real estate is hoping to reserve a place. If people live here, don’t leave it there, if it’s 1-3 years old, the lights should be on, so you should buy it. For example, if you go through an apartment project to hand over and only have 1 flickering light from the security guard, you should go home”, Mr. Quang note.
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