Make profit in real estate with VND 100 million
Currently, with a capital of only a few hundred VND million to less than VND 1 billion, it is very difficult for individual investors to make profit from real estate products (real estate) because the prices of houses and land in both urban and suburban are too high. At the moment, a product, which is also related to real estate but with only small capital to invest, is gaining attention of the market. That is corporate bond, especially bonds issued by reputable companies, with feasible production and business plans.
Less risks and more profit than saving
While borrowing from banks with the interest annual rate from 10% to 11% excluding complicated procedure, collateral required and so on, companies issue bonds to raise capital from investors with annual interest rate from 8% to 12 %.
In general, the investment channel into houses, land, apartments for handover will bring higher profits around 20% -30% / year but in return, there are also many risks. Moreover, investors must have a basic knowledge and a decent amount of money around VND 2 to 3 billion to participate. Meanwhile, investing in real estate bonds initially does not need to have that much.
According to Mr. Tran Khanh Quang, Viet An Hoa Real Estate Investment Joint Stock Company, in the past many companies had issued but not in methodical way and thus that did not create confidence for investors. However, now bonds are issued under tighter control. All companies have bank guarantees and accordingly liquidity is better as well as risks are much reduced.
Investors who buy bonds of real estate companies with 12% interest rate do not need to wait for 12 months to get interest, maybe after 2-3 months that they can go to the banks to ask for interest and get 11% in advance and the bank will wait until then”- Mr. Quang instructed.
Therefore, with only from VND 100 million to less than VND 1 billion, investors buying bonds could receive higher interest rates than saving with less risk than investment in real estate. Mr. Nguyen Hung Anh, an investor, revealed: “I and my group of friends joined this market and received good results. Buying bonds is an investment gateway for those with little capital. Compared with the savings interest rate of banks of 4% to 8.9% / year, corporate bond rates are 2 to 3 times higher .
With only a small amount of capital, investors buying bonds can receive higher interest rates than savings and less risky than investment in real estate. Photo taken by Q.HUY
“Try before you trust”
According to financial expert - Dr. Bui Quang Tin, bonds issued by real estate companies are an attractive investment channel. However, he noted that the bonds with interest rates over 10% will bear increasing risk. Currently, it is difficult for investors to update information after the bonds being issued, so it is very necessary for corporate bonds to be listed on the stock exchange market for transparency.
“In addition, according to current regulations even it is not compulsory, companies must publish credit rating before issuing bonds. This is very important that most companies ignored”- Mr. Tin said. For individual investors, Mr. Tin said that they must carefully read the prospectus of corporate bonds and determine whether the company is guaranteed by a bank or has real estate assets, etc.
Meanwhile, real estate expert – Mr. Tran Khanh Quang said that companies currently plan to issue bonds must go through an audit and consulting agency. These agencies will check the enterprise, in terms of transparency, profitability of the project, and plan to manage and use that mobilized capital. Companies issuing bonds include two types: bonds with collaterals with low interest rates and bonds without collateral often with higher interest rates. Mr. Quang advised investors to pay attention to three points. Firstly, it is the prestige of real estate companies; Secondly, it is the bond issuer; and thirdly it is is bank associated with real estate company to issue bonds.
Source: Quang Huy – Phap Luat Ho Chi Minh City
