Short-term apartment rentals are booming again

In the context of the difficult real estate market over the past year, the rental apartment segment in Ho Chi Minh City and other major cities is considered to be less affected. In particular, the short-term apartment rental service under the Airbnb model (a form of sharing economy in accommodation activities) is quite bustling thanks to the increasing number of tourists.

Bustling with tenants but residents upset

Just go to social networks and type in the keyword "rent an Airbnb apartment" or access Airbnb and similar applications, renters can easily find many apartments for rent in the center of Ho Chi Minh City such as The Metropole Thu Thiem (Thu Duc City), The Goldview (District 4), Vinhomes Central Park (Binh Thanh District)... with an average price of 1.3-1.4 million VND/night.

At Vinhomes Central Park, depending on weekdays or weekends, 1-bedroom or 3-bedroom apartments will have different rental prices. Specifically, a 1-bedroom apartment here has an average rental price of 900,000 VND to 1.1 million VND/night; a 2-bedroom apartment from 1.2-1.4 million VND/night; a 3-bedroom apartment from 1.5-1.6 million VND/night.

However, this service has recently received strong reactions from residents in apartment buildings because it affects their lives and benefits. At the Millenium Masteri apartment complex (District 4, Ho Chi Minh City), many households are upset because of the noisy and disorderly situation when guests frequently come and go regardless of the time, causing overload of elevators, entertainment areas, swimming pools, gyms... during rush hours or weekends.

A luxury apartment building in Ho Chi Minh City offers short-term apartment rental services. Photo: LE TINH

According to the management board of this apartment building, the fact that some people provide Airbnb services has disrupted the lives of residents. In October 2023 alone, the number of visitors and overnight stays was nearly 1,300 people, and more than 78% of them were foreign guests. The management board recorded 4 incidents of insecurity and disorder, mainly due to tenants not registering their information with the building management board.

Mr. TT, a worker in this apartment building, said that the apartments for rent here cost 1-2 million VND/day, the number of people staying here is from 4-5 people or more and are always full. This makes the residents unhappy.

"Previously, tenants freely used elevators and public facilities, causing residents to constantly complain. After making things worse, the management board did not allow tenants to use resident facilities such as swimming pools, gyms, etc., but the landlord had a "resident card" so they still brought guests in and out as usual. Residents were very upset but had to accept it," said Mr. TT.

Mr. Van Lam, who lives in the River Gate apartment building (District 4, Ho Chi Minh City), said that Airbnb guests usually stay from Thursday to Sunday. Previously, residents also complained about some guests causing disorder, but since the law does not prohibit it, everything went on as usual.

"The tenants are mainly foreigners or guests from the North who come to Ho Chi Minh City for work or tourism. When using Airbnb service, the tenants just need to come to the apartment, get the key in the mailbox, then someone will guide them to check in, which is quite easy, so this service is becoming more and more popular," said Mr. Lam.

Difficult to ban but need to manage

According to Mr. Tran Quang Trung, Business Development Director of OneHousing, who has a lot of experience in the real estate sector, while many other real estate segments are gloomy, apartments for rent are still positive, with rental prices constantly increasing. The average rental price of apartments in Hanoi increased by 4.5% over the past year. This has encouraged many investors to choose apartments as a form of investment that generates steady and long-term cash flow.

"Hourly and daily apartment rental services... are still a "fertile land". For example, the Masteri West Heights project of Masteries Homes in Hanoi, the design of the apartment and amenities are very suitable for hotel apartments, so many homeowners can equip it like a hotel and operate it in a chain, bringing in a very good source of passive income.

The profit from renting apartments in this form can be 2-3 times higher than pure monthly rental. As far as I know, there are investors who own dozens of apartments, equivalent to a mini hotel, which is about to be put into operation upon handover" - Mr. Trung said.

According to Mr. Trung, usually the area where foreigners rent will have good rental prices, which means the price level in that area will be pushed up. The increase in rental prices also helps the real estate price in that area increase.

In the context of the difficult real estate market, renting apartments still generates steady profits, especially the Airbnb service, which has attracted many investors to rush to rent apartments for short-term accommodation business through Airbnb (also known as hosts). Accordingly, hosts only need to register an account on the application platform and post ads. Transactions are carried out online very quickly and conveniently. Sometimes the owner and the tenant do not need to meet in person.

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, admitted that the service of renting apartments via Airbnb actually causes inconvenience to residents but it is difficult to ban. Because if the owner does not live there, they have the right to rent.

However, to limit the situation of causing insecurity and disorder, there must be a management solution. He suggested that the draft Housing Law should stipulate that if the owner wants to use the apartment for tourist accommodation, he must register his business, pay taxes and be responsible for managing guests so as not to affect the residents.

Residents and management need to be more aggressive

A real estate lawyer said that the law has provisions on the use of apartments for purposes other than residence. Specifically, Clause 11, Article 6 of the 2014 Housing Law prohibits apartment owners from "using apartments for purposes other than residence", meaning that renting out apartments is a prohibited act.

However, this regulation is almost impossible to implement in practice. "Therefore, for the regulation to be enforced, the most important thing is the will of the residents, followed by the viewpoint of the building management board. As long as the management board shows determination and clarity, this form of accommodation will certainly not continue," the lawyer noted.

Source: https://nld.com.vn/bat-dong-san/cho-thue-can-ho-ngan-ngay-lai-no-ro-20231120210224684.htm