Hundreds of abandoned shophouses and billion-dollar villas: Why aren't they rented out?

In big cities across the country, it is not difficult to see shophouses and villas invested with hundreds or thousands of billions of dong abandoned, overgrown with grass, or becoming temporary residences for people far away. home.


So, why do real estate properties worth tens of billions of dong close without being leased by their owners?




The situation of abandoned villas worth tens of billions of dong is not difficult to find in many places, especially in Hanoi. Over time, these villas are overgrown with grass and covered with moss... not only causing waste but also creating a "ghost" urban space even though it already has an owner.





If you have the opportunity to pass through Le Trong Tan street (Ha Dong), Trinh Van Bo street (Nam Tu Liem), it is probably not difficult to see images of hundreds of villas and shophouses that have been completed but lie exposed to the sun and rain. uninhabited, degraded, unkempt... for many years.




In Hanoi, many shophouses and villas are completed... but no one lives there





Occasionally, in urban areas with hundreds of apartments, there are still a few houses with tenants who both live and provide services. As someone who is renting a shophouse in an unfinished urban area in Dan Phuong district, Mr. Nguyen Quang Truong said he and two friends are renting the shophouse to open a coffee shop and real estate brokerage office.




It is known that Mr. Truong rented this house from an acquaintance more than 2 years ago. Because the house has just been basically completed, in order to use it, he has to spend an additional amount of money to install other items such as doors, curtains, electricity, water,... up to nearly 100 million VND. In addition, the rent is 7 million VND/month.





"Including the rent and repair costs is quite high. In return, the owner is an acquaintance so we can both live and do business for a long time, so it is acceptable" - Mr. Truong said.




Also according to the owner of this shop, some other shophouses in the area are rented cheaply by the owners. Tenants are mainly workers from small provinces, they rent cheaply to open breakfast restaurants, sell vegetables, pubs, etc. If you take it, you must return it. But because most of them live temporarily, furniture has not been invested in and installed, the landscape of this area is quite unkempt" - Mr. Truong added.





A row of shophouses in Hoai Duc district are in a dilapidated state, abandoned for decades

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Mr. Tran Thai Son - owner of a villa in an urban area west of Hanoi - said that based on the current market price, his villa costs about 28-31 billion VND. The current price is nearly 3 times higher than the price he bought this villa in 2010.




Sharing about the reason why this villa has been abandoned for more than 10 years, Mr. Son said that, despite being abandoned, the value of the villa still increased. While the area's infrastructure and amenities are still deserted, rental demand and rental prices are not high. Besides, the investment cost to complete this villa also cost more than 1 billion VND.




"In the phase of buying this villa, I also used financial leverage up to 60% of its value. If I continue to complete it for rent but the rent is not high, it will create great pressure to repay debt for me." , Mr. Son said.




Sharing the same situation, Mr. Le Minh Hiep - who specializes in high-end real estate business in Nam Tu Liem district said: "My two friends and I invested together. A few years ago, we made good profits and had quick liquidity, but from 2022 Up to now, we have almost not bought any more villas, while some previously "sold out" villas have not been sold yet. Although occasionally people ask to buy them, they pay too low a price."




The villa is worth tens of billions in squalor




According to Mr. Hiep, although the three villas are vacant, he has no intention of renting them out. Because if you rent it out, you will have to spend tens of millions to several hundred million to complete it, while the rent is not worth much.




“Although the houses are large and have beautiful locations, most of them have not yet completed electricity and water. If rented, the tenant usually pays a fairly cheap price. They also often stay temporarily for short periods of time, making the house unsightly and unsightly.




If finished beautifully, the current price of finishing inside the villa project is the lowest, ranging from 3-4 million VND/m2. For example, the cost of completing a 200m2, 3-storey villa is about 1.8 billion VND to 2.4 billion VND. I had to accept closing the door and leaving the house empty" - Mr. Hiep said.




Furthermore, this investor added, most of the things these villa owners care about is how the price increases, or when they need money they will sell.




It is known that villas are a real estate product that attracts great attention from investors in any period of the market. Investors who buy villas are often "rich" and people who use financial leverage for very large amounts of money. Meanwhile, if renting villas in unfinished condition is often very cheap, the money earned is only "change" compared to the amount of money they spent. Therefore, most of the owners