Many investors have taken a loss to return their homes or switched to long-term rentals to reduce losses after the ban.
At the end of February, the Ho Chi Minh City People's Committee issued regulations on the management and use of apartment buildings, which prohibit the use of apartments for purposes other than residence, including short-term rental services through platforms such as Airbnb (online booking).
Many apartments tighten regulations
According to the new regulations, the exploitation of apartments as tourist accommodation facilities by the day or by the hour is only allowed in mixed-use projects, including tourist apartments (condotels) approved for the purpose of accommodation services business. Individuals and organizations operating in the tourism accommodation service business must comply with the conditions for conditional business as prescribed by law, including temporary residence registration for tenants. For apartments that are only allowed to be used for residence, short-term rental is completely prohibited. If the owner wants to rent out the apartment, he/she must sign a contract with the tenant and use the apartment for the right purpose of residence.
At Vinhomes Central Park Urban Area, the building management board issued a notice requesting residents to stop short-term rental services on March 15. The notice clearly stated that residents are not allowed to rent short-term through channels such as Airbnb. If there is a violation, the management board will stop providing services and report to the authorities for handling. Long-term rentals are still allowed, but residents must register for temporary residence, temporary absence and be responsible for the behavior of the tenant. According to Ms. Mai Tam, a resident at Vinhomes Central Park, since the new regulations were issued, she has stopped short-term rentals to avoid trouble. Currently, she only rents long-term and clearly states the conditions in the contract. "The law clearly prohibits it, and renting will also cause trouble, so it's best to stop," Ms. Tam shared.
An apartment complex in the center of Ho Chi Minh City has a sign prohibiting short-term rentals.
In some apartments in District 4, the situation of short-term rentals has decreased significantly. At Millenium apartment, the lobby is no longer as crowded as before. However, according to a resident living nearby, there are still occasional foreign guests coming to complete procedures to receive the house. Ms. Xuyen, a resident at Millenium, said that the control of short-term rentals depends a lot on the determination of the management board. "If the management board is strict, no one will dare to bring guests in for short-term rentals," she said.
Ms. Nguyen Thao (District 7) once signed a contract to rent an apartment with a person who specializes in short-term accommodation services. However, when the new law came into effect, she asked the tenant to arrange to return the house. "There are people who invested a lot in apartments for rent, signed a 5-year contract but had to stop renting after only 1 year, not recovering their capital. Even though they suffered a loss, they still had to accept it because the law prohibits it, so they can't do anything else" - Ms. Thao shared.
Ms. Ha Dinh, Head of the Management Board of an apartment building at Vinhomes Central Park (Binh Thanh District), said that most residents in the building support the ban on short-term rentals. "Residents want to live in a quiet environment, without sharing utilities or worrying about security. The ban on short-term rentals is a measure to protect the legitimate rights of residents," said Ms. Ha Dinh.
Redirect
Mr. Hoa, an investor from Da Nang, used to own many apartments in a project in Binh Thanh District, Ho Chi Minh City for short-term rental. The profit margin from this model was up to 30%-40%. However, since Ho Chi Minh City tightened management, he had to liquidate the furniture and switch to long-term monthly rental, reducing the profit to 5%-10%. "I paid off some of the rented apartments when the contract expired. For the apartments that were signed for 2 years, I switched to monthly rental. Although the profit decreased, there was no other way," said Mr. Hoa.
According to Mr. Nguyen Hong Hai, Chairman of the Board of Directors and General Director of VNO Vietnam Joint Stock Company, investing in apartments for rent is a safe investment channel for the elderly. However, when renting for a short time through Airbnb, the lack of security, sharing of utilities and the impact on surrounding residents have made many people upset. Therefore, when the government issued a ban, although some investors encountered initial difficulties, in the long term this is a necessary measure to ensure a safer and more orderly living environment for residents.
According to Mr. Nguyen Van Dung, General Director of Savista Holdings Joint Stock Company, the management board previously had difficulty banning short-term rentals because there were no clear regulations. Now, with the law and decision of the Ho Chi Minh City People's Committee, implementation will be easier. However, Mr. Dung said that there should be a roadmap of 3-6 months for people and investors to adapt, avoiding being passive in investment planning.
In fact, according to the latest information, Vinhomes Central Park Management Board has decided to postpone the ban on short-term accommodation rentals to May 15 after a meeting with the ward People's Committee, police and apartment management board. This decision is to ensure a roadmap that is suitable for the characteristics of the urban area and to give relevant parties time to prepare, avoiding damage to service providers such as Airbnb.
According to Mr. Ta Trung Kien, Director of Wowhome Real Estate Company, previously some short-term rental specialists had shifted from District 4 and District 2 to District 7 to avoid the regulations. However, with the new regulations, short-term rental activities will certainly gradually cease.
Still sneaky
In some old apartment buildings or those without a management board, short-term rentals still occur. At an apartment building on Ba Huyen Thanh Quan Street (District 3), many foreign tourists still rent apartments through online booking applications for prices ranging from VND700,000 - VND900,000/night. A resident living here said that because there is no management board, it is difficult to control this activity. "We are not too concerned about short-term rentals, as long as the tenants do not make noise and affect the lives of the residents," this person shared.
Source: https://nld.com.vn/gioi-dau-tu-can-ho-airbnb-chuyen-huong-196250317210851009.htm
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