One valuable lesson I learned in purchasing a property in Vietnam is to be careful of what the agents said. 9.9/10 times, their claims will be too optimistic or even false!
Let look at the difference between the quoted price for Vietnam local people and the quoted price for us. Can you guess the difference? The first photo is the local price. The second photo is the quoted price for us.
For the unit CT1-A-05-06 we are considering, the local price included VAT is Dong 2,511,935,629. The price of Hong Kong is Dong 3,127,256,544 which is 24.5% more than the local price.
Next, let’s look at the claimed return v.s. return calculated by data! If you search in Google, you can easily find advertisements saying that the rental yield in Hanoi can be as high as 6 to 8 percent. What is reality?
I have scrapped all listing data in Batdongsan and summarized the rental yield by .
|District||Purchase price per m2||Cash flow Per m2 Per Month||Capitalization Rate|
|Bắc Từ Liêm||38144329.9||114285.7143||0.03595366795|
|Hai Bà Trưng||68285714.29||175000||0.03075313808|
|Nam Từ Liêm||41047945.21||157142.8571||0.04593931015|
# There are missing values in the capitalization rate because some districts have no property listed for rent.
The average capitalization rate in Hanoi is 4.71%.
It should be noted that there is a relatively lower number of listings in some districts, including, Chương Mỹ, Gia Lâm, Hoài Đức, Mê Linh, Quốc Oai, Sóc Sơn, Sơn Tây, Thanh Oai, Thường Tín, Thạch Thất, Đan Phượng, and Đông Anh. The capitalization rate calculated may be distorted.
If districts with a low number of listings are excluded, the average capitalization rate in Hanoi is 3.24%.
The actual rental yield is half that of what the agents advertised!