Wealthy Vietnamese are buying villas and apartments in coastal resort projects and using them to serve both their vacation and investment needs.
In years past, rich people in big cities would buy land in the countryside or at the beach and build villas where they would stay just a few days a year on holiday.
However, these days, they choose to purchase apartments and villas at tourism complexes and then assign management to the project developers who arrange to rent the properties to other vacationers for short periods.
With these investments, the owners can have a a place to stay during holidays, while their property still can earn money when they are in the cities.
Doan Duc Hoa, Deputy General Director of Thu Thiem Investment Company said that investment in resort real estate is taking shape in Vietnam and it will flourish in time to come.
Hoa said that having realized the high demand, his company is building a 21 hectare eco-tourism resort in Mo Cay district of Ben Tre province. The project is capitalized at 250 billion dong. The company will build apartments and villas for sale and lease. If the clients purchase villas and apartments but only plan to stay for just a few days a year, the company can manage the apartments and villas on the owners’ behalf. The profit from the leasing will be divided equally.
Indochina Land recently offered 150 apartments and 30 two story villas at the Hyatt Regency Da Nang Resort & Spa at $180,000 for each apartment and $1.3 million for each seaside villa. Within a month, more than half of the apartments and villas in the ‘time-share’ project have been sold.
Micheal Piro, an Indochina Land executive, says the buyers of the apartments and villas can stay in them at no cost for one to three months a year. The apartments and villas will be managed by the company in the remaining time and leased to visitors. In this case, investors act as ‘shareholders’ of the resort projects, while they do not have to spend tens of millions of dollars to build the whole resort.
Developers promise high profits
Also according to Indochina Land, the apartments will rent for $300-400 per night, and a villa will rent for $500. If an apartment is rented for 70 days a year, the apartment buyer will be able to recover his capital within seven years. And during that time, the buyers will be able to use the apartment for up to three months each year.
Thien Thai Hotel and Tourism Company is developing another Danang beach project, Ariyana. It has committed to rent the villas on behalf of buyers at some $1,000 per month.
Real estate developers said that if the resorts have good business and can attract a lot of vacationers, the owners of the apartments and villas will have high profits at the same time the value of the apartments and villas will increase. If so, they can easily resell the apartments and villas to other wealthy people who also like beach vacations.
Another real estate developer, CBRE, judges that investors can profit from time-share developments in Nha Trang, Mui Ne, Da Nang and Hoi An, well known vacation destinations with ideal natural conditions. However, CBRE doubts that beaches like Do Son (near Hai Phong City) will support the same sort of investments, because Do Son mostly serves middle class vacationers who can’t afford luxury rental charges.