News

Why should you invest in real estate?

3001-2023

Why should you invest in real estate?

Investing in Real Estate can make you rich quickly, but you can also go into debt if you invest at the wrong time or in the wrong way. However, this is still an enchanting investment channel and is chosen by many people.

The attraction of real estate

Robert Kiyosaki - author of the famous book "Rich Dad Poor Dad" - one of the best-selling personal finance books of all time. In his works, he emphasized the importance of this field. At the same time, investors must build a long-term plan to effectively exploit real estate. Therefore, it helps create more wealth and go further on the path to financial freedom.

Georgian-American real estate investor Tamir Sapir once said: "If you're not going to put money in real estate, where else?" Or the famous quote of former US President Franklin D. Roosevelt: “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” The two quotes above show the importance of real estate and why you should invest in this market.

Mr. Dung (Ha Tinh) was originally an office worker who switched to becoming a real estate broker. Mr. Dung started brokering the first plots of land in 2020 for investors who were his regular customers. With his existing knowledge, he took advantage of his weekends to take customers to see the land. Mr. Dan's customer base gradually increased and brought in more and more income. Mr. Dung decided to quit his office job and spend time on real estate.

“At first it was very difficult, I had to run many times before I could sell the first plot of land. To prepare for the new job, I also researched more about law, learned from friends in the same field, and participated in training classes to receive a certificate. The goal is not only commissions but also professionalism and longevity in this profession," Mr. Dung confided.

Bất động sản là kênh đầu tư hấp dẫn với nhiều người Real estate is an attractive investment field for many people

Mr. Hoang, from Nghe An, now has tens of billions of dong in Binh Duong after participating in real estate investment. Mr. Hoang is currently the director of a company specializing in "hunting" old and dilapidated houses to renovate upgrade and then resell.

The first house he "hunted" in 2011 in Phu Nhuan district (HCM City) had a total area of nearly 60 square meters with a price of 1.3 billion VND, 35% cheaper than the market price. He spent another 100 million VND to renovate the house and then rent it out. With the profit from his first house, Mr. Hoang continues to buy old townhouses at reasonable prices, upgrade them, and renovate them for business rental or resale. According to this investor, the total profit from selling and renting these types of assets within 12-24 months can help him earn billions of dollars.

“I can earn as little as tens of millions, as much as hundreds of millions. All deals are to buy cheap old houses, renovate them for sale, or rent with a minimum profit rate of 15%. With a small initial investment capital, this is a type of real estate investment that is quite popular among investors in big cities like Ho Chi Minh City and Hanoi," Mr. Hoang said.

According to statistics, in the first 11 months of 2022, real estate ranked 4th in terms of newly registered businesses with more than 8,200 businesses, an increase of 22.2% over the same period in 2021.

According to the Vietnam Association of Real Estate Brokers (VARS), Vietnamese real estate brokers currently have more than 300,000 people in brokerage companies, real estate exchanges, or independently. In recent years, the growth rate of real estate brokerage has averaged about 15%.

Thus it can be seen that this job is attractive to many people. Whether that person is a professional or a novice, real estate brokers have earned themselves significant profits, especially during bustling times of the market.

Real estate helps economic development

In recent years, the real estate market has helped the economy, industrialization, and urbanization grow. According to a research project of the Vietnam Real Estate Association (VNREA) published in 2021. in the period 2019-2020, the real estate market contributed 14% to GDP. This field is related to over 40 other important sectors of the economy, especially directly related sectors such as construction, manufacturing and processing industry, tourism, accommodation, catering, and finance-banking...

VNREA's research also clearly shows that the scale of real estate assets in 2020 alone, the proportion of real estate/total assets of the entire economy is 20.8% (205.26 out of 986.82 billion USD). It is estimated that in 2030 it will be 22% (1,232.29 out of 5,601.31 billion USD). In 2020, the added value of the real estate industry is estimated to reach 484.9 trillion VND (20.89 billion USD), and it accounts for 7.7% of GDP. In 2025, it is estimated to reach 1,249.8 trillion VND (53.84 billion USD), and it accounts for 9.72% of GDP. In 2030, it is estimated to reach 3,428.7 trillion VND (147.71 billion USD), and it accounts for 13.6% of GDP.

In addition, the real estate market is also an area that attracts investment capital. According to data from the first 11 months of 2022, the real estate business ranks second with a total FDI investment capital of nearly 4.19 billion USD, and it accounts for 16.7% of total registered investment capital. Cumulative from innovation to November 20, 2022, total FDI capital in the real estate business sector reached nearly 66.2 billion USD (15.1% of total investment capital).

The Ministry of Construction's report on operations in the third quarter of 2022 also shows that real estate credit reached VND 777,235 billion at the end of August. However, according to data from the State Bank, credit to the sector Real estate still increased by 15.68% at the end of August compared to the end of 2021. It accounted for 20.92% of the total outstanding credit balance of the entire system. Outstanding real estate business debt increased by 7.35%; Self-use purposes increased by 20.14%...

The real estate market has changed many urban areas towards modernity. Photo: Hoang Sang

The real estate market has changed many urban areas towards modernity; building many tourism - real estate products, changing many pristine areas into international-class tourist areas; providing a huge amount of housing; and making an important contribution to budget revenue...

Reasons to invest in real estate

Some opinions say that when you invest in real estate appropriately, it will bring the highest income because this field has many advantages.

Firstly, real estate benefits greatly from urban development policies and infrastructure planning. This is probably an advantage that other investment channels do not have. In fact, planning information, infrastructure projects, bridges and roads develop, and real estate also develop.

When there is information about infrastructure construction such as airports, highways, or a business requests to research an urban project. At the same time, many real estate giants or "realtors" come to that area to invest.

Or when there is information that a certain area is about to become a district or city, land prices suddenly increase rapidly. Thanks to infrastructure construction and planning policies, many investors have "won big", real estate value in that area also has more opportunities to develop.

Secondly, real estate has a variety of investment types such as land, apartments, townhouses, villas, etc. All of them help investors choose to suit their finances. If capital is thin, investors can contribute capital to buy with friends, relatives, and colleagues, or use financial leverage. Real estate investment also helps you easily access loans and credit capital as long as you have a reliable credit score and a stable job. However, it should be noted that you should not borrow more than 50% of the real estate value to avoid the pressure of paying monthly interest.

Thirdly, real estate prices tend to increase over time. This also depends on many other factors such as location, investment trends, market needs, etc. Investors can also add value to real estate by repairing, renovating, and decorating. When renovating a rental house, you can not only increase the rent but also help push up the value of the property.

Fourthly, real estate is a safe investment channel and creates a hedge against inflation. The world economy is facing instability. One of the causes of this is inflation. Inflation can reduce the returns on most types of investments. However, real estate investments often increase in value faster than inflation. Investors who view real estate as a hedge against inflation tend to increase prices when inflation is high. It is considered a safe investment, real estate value can also increase in times of economic fluctuation.

Fifthly, real estate creates a source of passive income and creates financial freedom. There are many ways you can turn real estate investing into passive income. For individual investors, an apartment/apartment/rental creates a stable monthly passive cash flow. You can even rent out an apartment/apartment/boarding house even if you haven't paid all the money to buy the property yet. For investors, businesses with retail space or offices for rent can also help them earn large amounts of revenue each month, so it creates a stable cash flow. Passive income is often the goal of any serious real estate investor.

Real estate is a unique investment with very large value transactions. This is always one of the investments loved by many people, especially investors with a long-term vision. You should invest in the right way to help you achieve financial freedom before the plan you set out.

10 famous quotes about real estate investment

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” Franklin D. Roosevelt, U.S. President.
“Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.” Marshall Field.
“Never depend on a single income, invest to create a second source”. Warren Buffett.
"Don't wait to buy real estate—buy real estate and wait.” Cavett Robert
“Real estate investing, even on a very small scale, remains a tried and true means of building an individual's cash flow and wealth”. Robert Kiyosaki.
"Landlords grow rich in their sleep without working, risking, or economizing." Political economist John Stuart Mill.
"Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” Andrew Carnegie.
“If you're not going to put money in real estate, where else?” Tamir Sapir
“Buy land, they're not making it anymore.” Mark Twain
“Don't be afraid of time. it takes more time, you will make more money,” businessman Donald Trump.