By Austin Weyers, Deputy Director at CVR.
Want to invest in real estate in Da Nang, Vietnam? Vietnam offers a great real estate investment potential to have your investment grow along with a tremendous outlook. Second homes, retirement properties, or real estate investment properties with options for international management and solid returns, Vietnam is worth exploring!
Many investors want to know how to buy a home in Danang or Vietnam in general as a foreigner, which can be difficult and intimidating to work out on their own. As a result, it’s critical to provide clear answers to some of the most basic, yet crucial, questions about the Vietnamese real estate market. CVR is here to assist homebuyers by giving answers and solutions to these frequently asked questions.
Continue reading to learn more about some of the most commonly asked questions by our clients from all over the world.
Most commonly asked questions about Real Estate in Danang, Vietnam
1. Can I buy real estate property as a foreigner in Vietnam?
Yes! Vietnam revised its law on real estate in 2015 allowing foreigners to purchase property with only a valid visa to enter the country. Since 2015 foreign direct investment in ocean view apartments, city-center condos, beach villas, golf villas has exploded as an investor for investors across Asia and worldwide.
More details at: Buying property in Vietnam as a Foreigner
2. What are the property types that can be purchased by foreigners in Vietnam?
Currently, foreigners are only able to purchase properties in government-approved projects. The most common real estate products approved for foreign purchase would be – 5-star beach resort tourist apartments, traditional condominiums in the central business districts, oceanfront villas in resorts / residential compounds, golf course villas.
A quick look at Central Vietnam Realty’s website can provide more details of up-to-date listings for both foreigners and domestic buyers.
3. What is the first step in buying a home in Danang or elsewhere in Vietnam as a foreigner?
The first step is to find a property you are interested in and a real estate agent you trust. As the property market can be difficult to navigate and not always transparent, it is best to align yourself with an agent who can support you throughout the purchase process including due diligence, property search, legal review, negotiations, ownership transfer, tax responsibilities, etc.
4. How much do I have to pay an agent to help me buy a house in Vietnam?
Generally in Vietnam, the seller will pay the agent’s service fee, though it is becoming increasingly common to see buyers aligning with their preferred agent and offering a 1% fee on residential properties or a 2% fee on commercial properties.
The buyer paying a fee ensures the agent is working for the buyer, bringing off-market properties, and getting the absolute best deal for the buyer.
5. What Types of Property are the Most Popular in Vietnam?
Vietnam is world-renowned for its’ beaches and pristine golf destinations. The condos and villas in these locations make an extremely popular investment choice for second homes, investment properties, rental properties, retirement homes, etc.
6. Where to invest in Vietnam: Which cities and neighborhoods are the best to seek to buy a property in?
A few of the highlight destinations for Vietnam property would be Da Nang, Hoi An, Ho Chi Minh, Ha Noi, Phu Quoc, Quy Nhon.
Da Nang, Hoi An, Phu Quoc, and Quy Nhon emphasize a relaxed, beach lifestyle. On the other hand, Ho Chi Minh and Hanoi represent the business and administrative capitals of Vietnam.
7. How do you get into a real estate project with a relatively small amount of initial capital?
Thankfully real estate prices in Vietnam are still relatively low compared to other Asian cities! Beachfront studio apartments can start from prices as low as USD $70k!
Another method to favorable pricing is to purchase early during a project’s construction. Early bird investors are generally offered the largest discounts (up to 12%!) of the public sales price.
Payment plans also allow investors to purchase projects early during the construction progress and make installment payments until handover. This allows investors to pay only 20-30% upfront, and pay the rest as construction continues with an outlook for 100% in 12-24 months.
8. What type of property should I choose for the first investment in Vietnam?
It depends on your preferences! Some investors prefer a smaller condo in a 5-star beach resort for their first investment. This reduces initial risk and also allows for exposure to the Vietnamese real estate market.
Other investors are set on Vietnam as a residence and look at unique villas/homes in exclusive compounds and communities where they can be comfortable for years to come.
9. The price and budget to plan if you want to invest in real estate in Vietnam?
The prices range greatly across different locations in Vietnam, though Da Nang and Hoi An are the most approachable with comfortable budgets between USD $100k – $250k. This price range will unlock most of the market for active investors.
Ho Chi Minh and Hanoi can be a bit more daunting with starting prices nearly double at USD $200k – $300k. This can be even higher if looking for prime areas in these cities.
10. How to prepare the purchase of your property in Vietnam?
The best preparation is finding an agent you trust who is willing to work for you to find you the best properties at the most attractive prices.
A lot of market research can be done online beforehand as well to familiarize yourself with the Vietnamese real estate market. Though be careful as a lot of Vietnamese advertisements are outdated, inaccurate, or simply clickbait.
11. What are the requirements to invest and get a loan to buy properties in Vietnam?
The purchase requirements for foreigners are really quite simple! The only requirement for Non-Vietnamese investors is to hold a valid visa to enter Vietnam.
Unfortunately, there currently are no traditional financing opportunities for foreign investors which means the funds usually need to be prepared in full beforehand. There are some options for private equity lending, though it should be considered on a case-by-case basis.
12. Property Taxes and Fees in Vietnam
There are several taxes and ongoing fees to be aware of when considering property investment in Vietnam. One big distinction is when purchasing from the primary or secondary market.
Primary Market :
10% VAT tax – All units sold directly from the developer for the first time are subject to a 10% VAT tax (applicable to both condos and villas)
2% Maintenance Fee (sinking fund fee) – Funds paid by investors to a common fund to be used later for ongoing maintenance and repairs (only applicable for condos)
Secondary Market :
2% Sales Tax – All resale units on the secondary market are subject to a 2% sales tax on the final agreed transfer price. This tax is usually paid by the seller and applies to both apartments and villas.
0.5% Registration Tax – Small fee to transfer the ownership documents/titles from the seller to the new buyer. This tax is usually paid by the buyer and applies to both apartments and villas.
During the ownership duration:
Monthly Management Fee – Similar to HOA fees in the United States, these fees are paid by all owners in a project to common area upkeep and utility expenses, staff wages (security, reception, cleaners, etc), trash removal, etc. These fees are calculated based on a price per square meter. Generally between USD $0.5 – $1.5 per square meter per month.
13. How long does it take to buy a home in Vietnam as a foreigner?
The sales procedure can take anywhere from 2-10 days depending on the property and situation.
Purchasing property directly from the developer can even be done remotely in just a few days!
What’s the next step? Speak with a professional!
CVR can assist you in analyzing your options available for buying or selling a home in Vietnam! Our staff of fully licensed agents is here to answer your questions and provide you with free, objective advice on how to get the greatest deals on your sale or purchase.