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The rich still invest tens of billions in homestay investment: "If you know how to do business, you will recover your capital after 2 years"

2707-2023

The rich still invest tens of billions in homestay investment: "If you know how to do business, you will recover your capital after 2 years"

Acknowledging the situation of cut loss, selling off homestays and resorts in the suburbs of Hanoi, Tran Thanh (Hanoi investor) said: "If the business is not profitable, cut loss is understandable." This investor emphasized: "If you want to do business, you must have a "job" in that field. At least, you have to understand, not see other people doing business easily, receiving high profit, that means you can do the same. If business and investment made big profits, everyone would invest."

Currently, Mr. Thanh is contributing capital to invest in a homestay in Ba Vi, Hanoi. In 2020, this investor and his associates spent 7 billion to buy land with a total of the project is over 2000m2. In 2021, a homestay concept was born. By the end of 2021, this homestay will be put into operation. The total cost of homestay investment is more than 4 billion. Revenue from this homestay is estimated at 65-70 million VND. Mr. Thanh estimates that the investment will pay back in about 4-5 years.

“Because the homestay is built on high terrain, the climate is cold. The cost of building materials is quite high, but the annual maintenance and repair costs will be reduced. That's why the estimated payback period for homestays is higher than for conventional projects."

Ms. M, who is currently a homestay investor in Thach That, also estimates that the payback period for the investment will be about 2 years. The investment amount in land with the total area of the project is more than 7000m2, estimated at 20 billion VND. The total cost of construction and rooms is about 8 billion VND. Currently, the homestay has been in operation for 2 months. Each month, Ms. M earns a total of 400 million VND.

Also a homestay, but Mr. Thai has a different direction. In 2019, Mr. Thai spent 3.5 billion to buy a villa in the project in Hoa Binh. After that, he signed a lease contract with the investor and received a profit of more than 10 %/year. The investor is responsible for operating the homestay rental. The profit that Mr. Thai received was higher than the interest rate on bank deposits. Mr. Thai said: "Currently, the demand for resorts in the suburbs is quite high. I buy homestay as a way to keep money. In addition to the annual profit, I am waiting for the villa to increase in price.”

Mr. Doan Manh is the CEO of Combo Home and also a direct participant in the market, many homestay projects, and investment and design consulting. He said, in the past 3-4 years, homestays have mushroomed in the suburban districts of Hanoi and in provinces such as Hoa Binh, and Son La... Most of these homestays are spontaneous.

Based on the location with the advantage of natural landscapes, many homestay owners spend tens of billions of dong to invest in rooms and some related utilities and rent. However, in order to work long-term with the homestay business, investors still have to know the "profession" of operation management, customer care ...

According to Manh, many investors choose to invest in homestays for many reasons. First, compared to land investment, homestay is still a type of real housing need. The advantage of this type of business is to generate business cash flow. The "taste" of many investors today is to find real estate products with business cash flow.

Secondly, in terms of the profit rate, investors can recover the construction capital in 2-5 years. If business is good, the time can be as fast as 1.5 - 2 years. While investing in a hotel, the payback period has to cost twice as much.

Third, in difficult market times, investors have financial potential, and homestay is a safe place to keep money. Thanks to the ability to bring business cash flow, homestay can also increase land prices in the medium and long term

Manh also said that suburban resorts are still a trend in the near future. That is the reason that the demand for resort accommodation in the suburban homestay will continue to increase. This is the reason why the homestay model develops.

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