“Experienced Real Estate Investors Advise: “Some Properties Are Just Not Worth Buying, Even at a Discount””

In the ever-changing real estate market, seasoned investors caution against certain types of properties that are best avoided, even if they appear to be a bargain. The following is an analysis of risky real estate investments, based on practical experience and current market trends.

Real Estate with Unclear Legal Status

A golden rule of real estate investment is to ensure transparency in legal matters. Experts warn against properties without proper land or ownership certificates, or those entangled in legal disputes. Investing in such properties can lead to financial loss, as well as costly and time-consuming legal battles. Examples include land in outlying areas with only informal documentation or apartment projects without the necessary construction permits.

Investors are advised to thoroughly examine legal documents, sales contracts, and seek information from relevant authorities before making any commitments.

Real Estate in Underdeveloped Infrastructure Areas

Despite their attractive prices, properties in areas lacking transportation infrastructure and social amenities like schools, hospitals, and supermarkets often struggle to increase in value. Liquidity becomes an issue, making it hard to find buyers or tenants. These areas are often subject to speculative price inflations, as seen in remote rural land with narrow roads and a lack of public utilities.

Therefore, it is advisable to invest in areas with well-planned infrastructure development and potential for growth in the next 3-5 years.

Real Estate in Polluted or Unfavorable Feng Shui Locations

According to investors, properties close to polluted areas (factories, landfills, cemeteries) or with unfavorable feng shui features (houses at the end of alleys or near drainage ditches) are often less desirable to buyers or tenants.

Consequently, the value of such properties may stagnate or decrease due to buyer hesitancy. Vietnamese culture places significant emphasis on feng shui considerations. Thus, it is crucial to carefully assess the location and surrounding environment. If the intention is to rent or resell, ensure the property meets the practical needs and preferences of the target market.

Real Estate Projects by Untrustworthy Developers

Numerous affordable real estate projects are heavily marketed, but some are backed by developers with insufficient financial capabilities or a history of scandals in project deliveries. This can result in project delays, missed deadlines, or poor construction quality. Investors may lose profit opportunities or face long-term capital lock-ins. This scenario has played out in low-cost apartment projects where developers face lawsuits due to delayed handovers or illegal construction.

Investors are advised to research the developer’s track record, review previous projects, and assess their financial capabilities.

Real Estate with Inflated Prices or Caught in a Speculative Frenzy

Vietnam’s real estate market has witnessed artificial land price surges fueled by speculation. These properties are initially cheap but later become difficult to resell due to a mismatch between price and actual value. Investors may find themselves trapped, buying high and selling low or at a loss. This occurs in land plots advertised as “new urban areas” without concrete development plans.

Resist the herd mentality and instead, analyze the area’s genuine potential, comparing prices with similar properties in the vicinity.

In conclusion, while the real estate market presents numerous opportunities, not all cheap investments are wise choices. Investors should remain vigilant, prioritizing properties with transparent legal standing, promising locations, and reputable developers. Thorough research and expert advice are key to sidestepping financial pitfalls and ensuring sustainable profits.