Buy-to-let offers easy cash returns

Asian expatriates are the main tenants for buy-to-rent and serviced apartments, Photo: To Ngoc Son

My Dinh, in western Hanoi, is apparently becoming one of the most attractive destinations for foreigners to lease apartments mainly due to its location on routes linking Hanoi with industrial zones  north of the city, as well as Bac Ninh and Thai Nguyen provinces.

This area also has several high-rise office buildings servicing international companies. It is now steadily maturing as a viable lifestyle choice location with several international schools, restaurants and shopping centres.

Among more than 380 units of Indochina Plaza Hanoi which have been sold, around 160 are currently occupied by foreigners.

With rental prices of $1,700 to $2,500 per month, these apartments are expected provide up to VND450 million ($21,400) per year in earnings for owners.

Meanwhile, Dolphin Plaza is a popular address for Japanese, Koreans and Singaporeans.

According to Nguyen Bich Son, business development director of the PMC, buy-to-let apartments are becoming more popular as homebuyers seek profits from leasing.

Apartments with high construction quality, good facilities and a pleasant environment are keenly sought by foreigners. Other factors include good quality schools and ease of access to work places.

Son said there were similar opportunities in the southern suburb of Ha Dong. Apartments at the Hyundai Hillstates development, a Korean-backed residential project, are being leased at VND14 to 16 million ($666 to $760) per month.

Out of around 300 apartments already in use, more than 100 were leased to foreigners, mostly Koreans who were working in Ha Dong and neighbouring areas.

In order to attract more buyers, developers of newly built buildings in Hanoi are also offering more incentives, including being prepared to take on newly-bought apartments and putting them out to lease.

The investor of Dolphin Plaza has claimed it can guarantee rental returns of $1,000 to $1,700 per month.

The project’s investor claims the profit ratio of leased apartments in Dolphin Plaza could be from 7 to 8 per cent per year, providing better returns than US dollar deposits. Apartment owners do not have to worry about finding tenants and are exempt from management fees for the first three years.

For many years, demand for apartments and house leases have been focused in Hanoi’s central districts. The most popular areas continue to be the districts of Hoan Kiem, Tay Ho, Dong Da, Ba Dinh and Hai Ba Trung.