Is it reasonable to have 2 billion to buy an apartment or save money to earn interest and rent a house?
Vinh Vu (36 years old, living and working in Hanoi) sent a question:
“I have 2 billion, so it is reasonable to use it to buy an apartment or save it to earn interest and then rent an apartment. Ask a financial expert for advice“.
Hello Vinh Vu. We have forwarded your question to Expert Tran Manh Hoang Viet. He is currently the Founder of TrustLife, Financial planner of FiDT and a well-known financial consultant Youtuber on social networks.
According to expert Tran Manh Hoang Viet, the question is quite general and has not fully described the relevant factors to make an accurate consulting decision. To be able to correctly identify and answer the situation, Expert Tran Manh Hoang Viet needs some additional information as follows:
– Family background, are you single or married? How many children do you have?
– What is your current form of residence?
– What is the total current income of you and your family (if any) and expenses per month?
– Do you have any current debt?
These are the basics of being able to give accurate advice. However, based on the data of the problem, Expert Tran Manh Hoang Viet will provide a reference solution for you.
Is it reasonable to have 2 billion to buy an apartment or save it for interest and then rent it?
General perception:
Option 1: If you choose to rent an apartment
With a savings of 2 billion, the interest rate on 12-month bank savings fluctuates around 5.5% – 7% depending on the bank. Thus, it is expected that the amount of money collected each year is about 11 million-14 million/month. Expert Tran Manh Hoang Viet takes the apartment rental price in Hanoi for your reference.
+ Small apartment with an area of 35m², basic rent for 9.5 million/month. Full furniture: 11-12 million/month.
+ Apartment from 1-1.5 bedrooms (45-50m²) basic rent for 11 million/month. Full furniture: 13-15 million/month.
+ 2-bedroom apartment (60-85m²) basic rent for 13 million/month. Full furniture: 15-19 million/month.
+ 3-bedroom apartment (90-122m²) basic rent for 17-18 million/month. Full furniture: 23-25 million/month.
With a savings of 2 billion dong, profit from 11-14 million/month, You can rent a living apartment for 2 couples and children in Hanoi for the 1-1.5 bedroom segment.
If you rent in the high segment, the comfort level is better, but you won’t be able to save more money. If the rent is average, each month the family will have an excess for other expenses.
Besides, you can learn more about other types of apartments such as mini apartments, the cost is reduced by about 20-30% to suit your needs.
With this money, you can rent a living apartment for 2 couples and children in Hanoi for the 1-1.5 bedroom segment.
Option 2: If you choose to buy an apartment in Hanoi
According to the latest report on the real estate market in Hanoi, the current apartment price fluctuates around 45 million/m². For the mid-end segment, an increase of 5% in the fourth quarter of 2021 compared to the first quarter of 2022 due to land fever in suburban areas.
The apartment market in Vietnam is divided into 4 categories: Affordable, Intermediate, High-end and Super-premium. The affordable apartment segment is about under 25 million/m, the mid-end segment is from 30-60 million/m², the high-end segment is from 70-100 million/m² and the ultra-high-end segment is over 100 million/m².
With your money, you should choose the mid-range segment, which comes with a location that may be a bit far from the center, in the suburbs. If you choose the affordable segment, you will have more options.
Suppose in case you have 2 billion and want to buy an apartment, you should look for a suitable area in the suburbs or suburbs with a price corresponding to your ability.
A little note:
Assuming you choose to buy an apartment, you should choose an investor to hand over less than 2 years to ensure the quality is new and consistent with the general market trend.
Second, you can use financial leverage through the form of capital mobilization from relatives (the advantage is low interest rates, flexible terms) or capital mobilization from banks.
When it comes to mobilizing capital from a bank, there are a few principles that you need to know specifically as follows:
– The amount to pay both principal and interest does not exceed 35% of your or your family’s total income.
– Find out and compare interest rates between banks or ask an expert for advice. In the process of researching, you should balance the following criteria to ensure optimal loan coverage.
+ Loan interest
+ Loan period
+ Loan value
+ Prepayment fee
+ Additional services such as buying life insurance, application appraisal fee.
In addition, when choosing to buy an apartment, the price characteristics are slow growth and low investment efficiency in the period after the first 5 years. Before that, the apartment was very stable in terms of profit efficiency around 11 – 14%.
From the above data, the expert advice is You can consider saving or investing to rent an apartment.
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
