Amid all the enthusiasm about investing in Vietnam, there are pitfalls to watch out for especially in real estate.
Vietnam – one of the most dynamic developing countries in Southeast Asia, has been a top draw within the region in the last few years. Increasing numbers of foreigners are getting interested in learning about Vietnam.
That’s why the number of foreign visitors started to rise significantly since 2015.
In the past six years, the expat community in Vietnam has expanded throughout the whole country. Many people come here with different purposes but most want to pursue a different lifestyle, and Vietnam seems like one of the few options that makes the dream become possible. Some move to Vietnam for business and eventually fall in love with the country. And lastly, Vietnam attracts investors because of its potential in many sectors, especially real estate.
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If you’re an expat living in Vietnam, it’s recommended to do your research thoroughly on renting and buying property in Vietnam. This article explains about the market in Vietnam, including the pricing, standards, locations, and the regulations. Admittedly, the paperwork is the most complicated part of buying/renting a property in Vietnam.
Renting in Vietnam
The answer to this is simple: As long as you have a valid passport, you can rent a property anywhere in Vietnam. Both furnished and unfurnished properties are available. Local agents are available on the Internet. If you want to find the best agents out there, make sure to ask for references from those who have been to Vietnam before.
There’s a fine print to buying from property developers – you must get an ownership certificate to be qualified.
By going through the local agents, you will have a better understanding of the procedures and the contract terms. These include payment methods, facilitating deposits, and negotiations fortenancylength.
There’s a huge price range for you to choose from. It can vary from a few hundred dollars to more than US$1,000. In addition, the price varies based on the location. If you’re planning to stay in big cities such as Saigon, Hanoi, Danang, the cost is a bit higher. These three cities are known as the economic hub of Vietnam.
Yet, they are still affordable for many foreigners living in Vietnam. Rentals in these cities can range between US$300 – US$1,500 a month. Compared to other developed countries, these prices are considered a lot more affordable. You may pay about US$500 a month for a fully furnished Western-style apartment.
Investing in property has become a lot easier for foreigners. Vietnam opened the door for foreign investors in 2015. Over the past six years, the market has become a lot more vibrant than ever. Prices constantly increase as more foreign investments come into Vietnam. Among ASEAN countries, Vietnam is currently one of the most sought after locations due to its potential in all aspects.
Before 2015, buying a property in Vietnam as a foreigner wasn’t a thing. The Vietnamese government restricted foreign ownership by introducing a lot of strict regulations for foreigners. That’s why in the past, not too many foreign investors participated in the real estate market in Vietnam.
After 2015, the Vietnamese government decided to open the door and welcome international companies to join them in improving the country’s economy. Now the regulations have changed. A foreigner can own as many properties as they want as long as they have the money. This revolutionary policy was the key factor that brought Vietnam closer to other countries in the global market.
People often buy property to either invest or settle down in Vietnam. Most of the time, foreigners decide to buy a property outside the megacities since it’s a lot cheaper. Also, they enjoy the peacefulness of the countryside. But in my opinion, if you want to earn big figures in your bank account, investing in properties in the main hubs of the country such as Saigon, Hanoi, and Danang will profit you significantly.
Having said that, there’s a fine print to buying from property developers – you must get an ownership certificate to be qualified. Since the government recently decided to restrict the regulation for the sake of its national defense and security, it’s now harder for foreigners to get their property ownership certificates.
One way of checking whether your chances of getting an ownership certificate is good is to check the list of available locations at the Construction Department in your area. If they are in locations belonging to the Ministry of National Defense and the Ministry of Public Security, they won’t appear in the list. These two ministries are the only ones which have authorization over projects in their locations.
Here are several current regulations in force:
- If you have a tourist visa, you can always buy a property in Vietnam;
- You can buy an unlimited number of property in However, 250 is the maximum number of properties you can buy in a Ward;
- Foreigners can buy up to 30% of units of a condominium and can own up to 10% of the properties in a project; and
- You can renew your leasing agreement after the first 50-year lease.
As a foreigner living in Vietnam, you cannot buy or own land. According to the constitution of Vietnam, only Vietnamese can own land and all lands throughout the country are governed by the State.
However, foreigners can get long-term leases. All foreign organizations and foreign individuals can lease land for up to 50 years. However, there’s an exception for the validity of the lease. Some are allowed to rent up to 70 years and 99 years, legally.
The paperwork is the most complicated part of buying/renting a property in Vietnam.
After the lease is over, you can renew the contract and have another lease. However, whether you’re investing in Vietnam or anywhere else, remember to be cautious. The regulations can be changed due to different factors. It may seem comfortable for now but there is no guarantee whether you can renew the lease or not.
If you’re interested in land in Vietnam, there’s a term called LUR (Vietnam’s Land Use Right). It helps increase the security of ownership for foreign buyers in Vietnam. You still have no rights to own the land, but you’re allowed to use it. Moreover, you must assign your LUR to the Vietnamese government if you want to lease your land. APR
Guillaume Rondan is a French investor and entrepreneur living in Vietnam for 5 years. He owns different ecommerce businesses and is the founder of Movetoasia, a community for like-minded expats, investors or business leaders who wish to invest, do business or relocate to Asia.