There are currently two different opinions about renting or buying an apartment, in the context that this segment is still "hot".
Savings, apartment rental
Mr. Nguyen Thanh Tung - a real estate investor in Hanoi said, suppose a customer has 3 billion VND in spare money. Instead of buying an apartment, the customer saves and rents an apartment. With a savings amount of 3 billion, the interest rate for a 12-month bank deposit ranges from 7 - 8% depending on the bank. The expected annual income is about 220 - 240 million VND, equivalent to about 20 million VND/month.
Meanwhile, the rent for an affordable apartment with an area of about 80 - 90m2 is currently 10 - 12 million VND/month, while for a mid-range and high-end apartment it is about 15 - 20 million VND/month, equal to the savings interest rate.
However, it should be noted that in the rental calculation, the initial capital instead of buying is deposited in the bank, so where does the monthly rental of 20 million VND come from when all of it is deposited in the bank with annual interest. Besides, while the savings interest rate can remain the same for many years, even decrease, the rental price will usually increase annually. So after about 2-3 years, the bank interest may not be enough to pay the rent.
Customers should choose to rent or buy an apartment depending on their financial ability. (Illustration photo)
Not to mention, renting a house does not provide you with all the amenities you would need if you bought a house, and you will likely have to constantly move to find a new place to live, with all the accompanying expenses.
However, if your finances are not enough to buy an apartment, the best option is still to rent. The advantage of renting an apartment is that in case the apartment does not suit your living criteria, you will be flexible to change to another more suitable apartment. The apartment rental price is also easy to choose to suit your financial ability.
Buy apartment
For those with good finances, according to Mr. Tung, they should buy an apartment to "settle down and have a career". Suppose with 3 billion VND, customers can buy an apartment of about 80 - 90m2 in Hanoi. Apartment prices may not increase evenly every year, but if calculated within a range of 5 - 10 years, the apartment can increase by 20 - 30% compared to the time of purchase.
Therefore, apartments are not only for living but also a profitable asset for the owner. However, one of the issues that home buyers and investors need to consider when buying an apartment is the liquidity of this segment. The liquidity of apartments in general, especially the high-end apartment segment, is slowing down in the first 10 months of 2022 and this situation is expected to last until 2023.
Buying and selling immediately to make quick profits from apartment investment in a few months or quarters is difficult to do in a real estate market that is showing signs of stagnation.
Investors may even risk losing capital if they sell their properties early. After receiving a few years of ownership and then selling or renting for profit, home buyers or investors will face less liquidity risk. The important thing is that the apartment complex has ensured a full range of utilities and services as well as a stable community of residents.
Therefore, whether to rent or buy an apartment depends on each person's financial ability, usage needs and investment plans.
Ngoc Vy (Synthesis)
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