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Investing in real estate or having interest-bearing account?

Hi there,
What would be better/safer: investing in real estate in HCMC or having an interest-bearing account in a Vietnamese bank (that can also be foreign bank in Vietnam)?
I've been told in Vietnam interest-bearing account can be 8%?
What would be pros/cons of these 2 options?

The safer option is in the bank. The higher return may be property,if you buy right.

But is it 8% interest? Why so high? I've never seen such a high rate in Europe...

It's high because the lending rates are also very high. It was 14% about 5 years ago, and lending rates were 20-22%.

I've never put my money in the bank nor has my wife or any of her 7 siblings and their families.

8% eh? Man I've been missing out on all those free money.

Many will encourage buying, but how difficult is it to sell? If you are stuck with the 'investment' what good is it if you want/need to sell it?

Personally, I like to plan backwards. That is, what are my options to liquidate the asset when needed.

Remember, Vietnamese like 'new and trendy' things, so a used property might not be as appealing when there are many new buildings being constructed.

7Steven :

Many will encourage buying, but how difficult is it to sell? If you are stuck with the 'investment' what good is it if you want/need to sell it?

Personally, I like to plan backwards. That is, what are my options to liquidate the asset when needed.

Remember, Vietnamese like 'new and trendy' things, so a used property might not be as appealing when there are many new buildings being constructed.

Agree, but I have noticed more and more locals are buying renovated properties which are generally much cheaper than the new flash joints being built. But overall yes you are correct on the old versus new theory.

khanh44 :

I've never put my money in the bank nor has my wife or any of her 7 siblings and their families.

8% eh? Man I've been missing out on all those free money.

So where do you keep your billions of dong?

can't say lol

Damn, I was hoping to make a quick buck.

When interest rates were 17% it was great, but the downside was for  the poor buggers who were borrowing at around 22%.

interest rate 17%, inflation must have been 20+%.

I see people paying 100+% interest because they don't understand compounding. They see the daily or monthly payment breakdown without factoring their initial deposit and get screwed easily.

Do share.  ;-)

khanh44 :

can't say lol

I've just been to HSBC, they told me 3.9%. The 8% I heard was from Eximbank.
Anyway, I plan to invest in real estate but i'm just afraid it might burst soon.

There is another option which is , I believe, more feasible, you get 85% of profit from the rental program, higher than the interest rates and absolutely own the property for the whole life. Buying condotel is a new model property in Vn but popular in foreign markets.
Do not hesitate to pm me for more information
Thank you !

Ok, PM sent.

elena2710 :

There is another option which is , I believe, more feasible, you get 85% of profit from the rental program, higher than the interest rates and absolutely own the property for the whole life. Buying condotel is a new model property in Vn but popular in foreign markets.
Do not hesitate to pm me for more information
Thank you !

Be very,very careful. Only invest what you can afford to lose. Most banks are giving 7.6% for 1 year, the staff at HSBC have advised you badly.

Condo-hotels are a bad investment, they promise the earth and give you very low returns, read below.

Additionally, there are tons of financial risks with condo-hotel investments. First, there are risks when buying into an HOA community. You also have the risks that come with owning part of a hotel such as a downturn in the economy or poor management of the property. Lastly, the allocation of expenses between the condo-hotel units and other portions of the property – such as a developer-owned hotel or retail space – presents a risk.

colinoscapee :

Most banks are giving 7.6% for 1 year, the staff at HSBC have advised you badly.

Thanks so much for this reminder. I forgot the rule n1 in Vietnam: always ask many people to get a proper answer... I will ask another one...

colinoscapee :

Condo-hotels are a bad investment, they promise the earth and give you very low returns, read below.

Additionally, there are tons of financial risks with condo-hotel investments. First, there are risks when buying into an HOA community. You also have the risks that come with owning part of a hotel such as a downturn in the economy or poor management of the property. Lastly, the allocation of expenses between the condo-hotel units and other portions of the property – such as a developer-owned hotel or retail space – presents a risk.

Thanks again. I very appreciate this advise. I just wanted to know more about this type of investment.

That's wise thinking ...
When you plan to enter an investment, always think about the 'exit plan' too.
It can be very frustrating if you wait around struggling to sell a property, sometimes even up to a year or more (or sell it more quickly at a lower price), then simply going down to the bank and getting your money + interest. I would take the latter idea all day long ...

Thanks buddy :)
Yeah I plan to buy a property but not the cheapest one otherwise I might struggle finding tenants and resell it then.

Most Vietnamese I know buy those standard rings you see in the gold shops & rely on the fluctuation in the gold price. You can invest with foreign currency in the Agri Bank interest is low & the money gained on interest must remain in Vietnam the capital invested can be sent home.

Be careful foreigner.  Once you transfer money into vn and cash out in "vnd" to get the 8% CD interest. At the end it will be very very very difficult to exchange back to usd and transfer out ( I mean the legal way ).  Do your research before cash out in vnd.

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