Investing in land, the "gut" criteria that investors need to know

Sharing on a financial investment forum, an account named Khoa Bui said: “I am 34 years old, have an apartment, a car and savings of about 2.5 billion VND. I earn money through the Internet platform with an income of about 100-150 million VND per month. However, it is impossible to calculate how long this job will last. Currently, in addition to living expenses, I spend 80% on savings and 20% on stock investment.

With the remaining money, I want to spend 2 billion VND to buy a property which is a plot of land in the suburbs, about 20km from the center of Hanoi. Because I have no experience in the real estate field, I hope that those with experience can advise me on what I should pay attention to when choosing to buy land for investment.

Many inexperienced investors want to buy land in the suburbs.

Commenting on Mr. Khoa Bui's sharing, Ms. Chuyen - an investor living in Hanoi, said that when buying real estate for investment, anyone needs to pay attention to the basic criteria, such as whether the area is about to have a new infrastructure project, whether there is potential for developing an industrial park or an administrative area, whether there are amenities such as hospitals, schools or will a new residential area be formed in the future, etc. If the above factors are ensured, it will be the basis that can help your real estate increase in price by 20-30%, or even more. Sharing with the press recently, Mr. Dinh Minh Tuan, Sales Director of Batdongsan channel in the Southern region, said that for investors with "fresh money" and wanting to invest long-term, this is the time you can consider putting down money. However, investors need to pay attention to some criteria when choosing land for long-term investment.

Specifically, the first point is to research and choose a market with a driving force for regional economic growth, including GDP growth, infrastructure planning, transportation, and projects of large investors. This is the most important step for you to choose a potential market, avoiding the situation of buying but losing liquidity and not being able to trade. After choosing a suitable market, you need to determine the potential area in increasing radius.

According to experts, the most important criteria when investing in land are infrastructure planning, traffic, projects of large investors...

For example, in areas with developed transport infrastructure such as highways, airports or newly built industrial parks and urban areas, within a radius of less than 10 km around will be areas with strong price increases, collected by professional investors from the time information is available. With a medium budget, you can survey within a radius of 15-20 km to choose areas with softer prices, suitable for long-term investment. When the infrastructure or project is completed and attracts residents, the real estate market will continue to increase in price in a more sustainable way.

Second, investors need to pay attention to factors affecting land prices such as location, legality, area, and surrounding amenities. These factors not only ensure your investment is safe in the long term but also have the ability to exploit for rent. Because land is a product for investment or speculation, it is difficult to bring rental cash flow like many other segments. This will make non-professional investors impatient because they "bury capital and wait for the right time". If the land has advantages such as a convenient location, near a residential area with many amenities, you can still do business in some models such as renting parking lots, restaurants, etc. Although the cash flow is small, it helps your land increase in value more than leaving it vacant for a long time.

Third, accurately price the land and its liquidity. Many newcomers to the land market often have difficulty pricing the land and assessing its liquidity. Because after many periods of rapid increase and then decrease, the advertised price of the land will differ from the actual value. If you do not know the actual price range, you can easily fall into the situation of buying and selling at a loss, or when you need to sell, you cannot make a transaction due to lack of liquidity.

Therefore, before paying, you should survey the level of activity at the real estate notary offices in the area or the number of listings for sale. In addition, check the history of sales prices for about two years through local or specialized brokers in the area to grasp the price range around the land plot you intend to buy.

Regarding expected profits, according to Mr. Dinh Minh Tuan, data from Batdongsan channel shows that land has grown an average of 12.5% ​​per year over the past 7 years. Some well-developed markets can grow 15-20% per year. "Please note that at the present time, you should not use financial leverage to invest in land because of many risks. Paying high interest rates will erode your investment profits. In case of pressure to pay interest, you will have difficulty selling in a short time, and may even have to accept selling at a loss to get rid of the goods," Mr. Dinh Minh Tuan warned.

Quynh Chi

Source: https://www.nguoiduatin.vn/dau-tu-dat-nen-nhung-tieu-chi-ruot-nha-dau-tu-can-biet-204665323.htm