One valuable lesson I learned in purchasing a property in Vietnam is to be careful of what the agents said. 9.9/10 times, their claims will be too optimistic or even false!

Let look at the difference between the quoted price for Vietnam local people and the quoted price for us. Can you guess the difference? The first photo is the local price. The second photo is the quoted price for us.

For the unit CT1-A-05-06 we are considering,  the local price included VAT is Dong 2,511,935,629. The price of Hong Kong is Dong 3,127,256,544 which is 24.5% more than the local price.

Local Price
Agent Price

Next, let’s look at the claimed return v.s. return calculated by data! If you search in Google, you can easily find advertisements saying that the rental yield in Hanoi can be as high as 6 to 8 percent. What is reality?

I have scrapped all listing data in Batdongsan and summarized the rental yield by \frac{yearly rental income}{Purchase Price}.

DistrictPurchase price per m2Cash flow Per m2 Per MonthCapitalization Rate
Ba Vì972222.2222

Ba Đình1300000002000000.01846153846
Bắc Từ Liêm38144329.9114285.71430.03595366795
Chương Mỹ7000000400000.06857142857
Cầu Giấy93421052.631750000.02247887324
Gia Lâm41311475.413600000.1045714286
Hai Bà Trưng68285714.291750000.03075313808
Hoài Đức28767123.29700000.0292
Hoàn Kiếm2000000003955900.0237354
Hoàng Mai60294117.65110389.61040.0219702249
Hà Đông56521739.13115384.61540.02449704142
Long Biên650000001250000.02307692308
Mê Linh13500000550000.04888888889
Nam Từ Liêm41047945.21157142.85710.04593931015
Phú Xuyên4000000

Phúc Thọ6666666.667

Quốc Oai5350000550000.123364486
Sóc Sơn6358974.359500000.09435483871
Sơn Tây650000048571.428570.08967032967
Thanh Oai32432432.43500000.0185
Thanh Trì53703703.7105971.47950.02367914439
Thanh Xuân52329384.72152941.17650.03507196057
Thường Tín8529411.76559166.666670.08324137931
Thạch Thất6800000575000.1014705882
Tây Hồ87609649.12185714.28570.02543751117
Đan Phượng2600000077623.456790.03582621083
Đông Anh23000000550000.02869565217
Đống Đa115058139.52000000.02085901971
Ứng Hòa11100000

# There are missing values in the capitalization rate because some districts have no property listed for rent.

The average capitalization rate in Hanoi is 4.71%.

It should be noted that there is a relatively lower number of listings in some districts, including, Chương Mỹ, Gia Lâm, Hoài Đức, Mê Linh, Quốc Oai, Sóc Sơn, Sơn Tây, Thanh Oai, Thường Tín, Thạch Thất, Đan Phượng, and Đông Anh. The capitalization rate calculated may be distorted.

If districts with a low number of listings are excluded, the average capitalization rate in Hanoi is 3.24%.

The actual rental yield is half that of what the agents advertised!

Be Careful!

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