Hanoi house owners live in rentals to lease out properties for profit

Renting a house and spending on another house for rent is the type of investment of millennials in Vietnam. Condominiums in Ha Dong Districts are among the common choices for such a rent in Hanoi. - VNS Photo Minh Huong

As renting a house is increasingly common among millennials, more and more rental opportunities have popped up.

Kien and his wife lived in a villa they own in Linh Dam area, Hoang Mai District, southern Hanoi, three years ago but then rented it out and decided to live in a rented apartment in Cau Giay at a cost cheaper than they charge their tenants.

"My wife and I really like to live in a rented place as it is close to the school for our children, and close to where my wife works while I can spend my assets and money to invest," Kien said.

Nguyen Viet Dung, who works for a bank in Hanoi also leases out his villa in Van Quan area, Ha Dong District and a house on Lang Ha Street and lives in rental in Dong Da District.

Dung told Vietnam News: "I feel comfortable when renting a mid-range apartment in the centre of the city, though people keep asking me why when I have houses of my own I still live in a rented apartment, and why would not I buy the apartment.”

David Jackson, general director of Colliers Vietnam, said the previous generation considered housing as a stable value-added asset, now as millennials have become the main workers in society and gotten married, they have their own different housing needs.

Apartments are chosen by most young people today as the prices are considered better in locations more suited to their work and active lifestyle than where townhouses are found. Condominiums are also often closer to important social amenities such as schools, hospitals or shopping malls.

Dung said renting was convenient, but from an investment point of view, he would never buy an apartment as an accumulative asset but instead spend his money on a separate house or villa.

“The value of an apartment building will go down over time but the prices of separate places will always go up.”

Along the same line of thinking, Nguyen Bich Lien sold her ninth-floor apartment in Bac Tu Liem District for more than VND1.3 billion and put her money into two plots of land in Nam Dinh and Thua Thien-Hue provinces. She rents an apartment in the centre of My Dinh District for VND7 million per month.

"I saw a loss when spending on an apartment building so I put money into residential land in the provinces, hoping the price would increase in the next three to five years. If I had kept the apartment, its price would go down after five years and I would have had to pay more for the travel cost for me and my children, working and studying in My Dinh where my children could access higher-quality schools.”

Born in Hanoi in 1988, Doan Manh has lived in a rented house in the capital for the last 10 years, during which he married and had two children. In the past, men like Manh would have seen living in the house they owned as essential.

He said: "My principle is that money must be circular instead of being put into a house you live in.

"If you buy an apartment for VND1.5 billion, while the rent of such a house is only VND5 million per month, if you put that VND1.5 billion into a bank savings account, you can get more than VND8 million interest per month or if you invest it in real estate, the profit rate will be more than the rent of VND5 million many times."

Phan Cong Chanh, a real estate expert, said leasing out an owned house and living in rented accommodation is not accessible to everyone, especially those who consider houses as fixed assets for them and the next generations.