Buying an apartment to rent: The golden age is over!

The rate of return from apartment rental is now only 3%-4%, much lower than a few years ago.

For many years, buying an apartment for rent has been a safe choice, providing a stable monthly income for many people, especially middle-aged customers. They see this not only as a way to preserve assets, but also as a sustainable profit channel thanks to the increasing value of the apartment over time. However, in recent years, the reality shows that the problem of profit from renting is changing rapidly, when the price of buying an apartment "skyrockets" while the rental price only increases "snail-like".

Profitability ratio decreased by more than half

A survey by a reporter from the Lao Dong Newspaper shows that in just the past 3-4 years, apartment prices in Ho Chi Minh City have increased by 30%-50%, some projects even doubled. Meanwhile, rental prices have only increased by 10%-15%. This difference has caused the rental profit rate to drop sharply, in many cases only 2%-3%/year, lower than the interest rate on savings deposits.

Apartment prices are getting higher and higher, but rental yields are at an all-time low.

Ms. Thanh Dung (residing in Xuan Hoa ward) said that in 2015-2016, she bought two two-bedroom apartments at the Masteri Thao Dien project (An Khanh ward) for only 2.4 billion VND/apartment. After completing the interior, she rented them out for 1,000 USD/month. However, after the pandemic, the rental price dropped to 19 million VND/month. On the contrary, the value of the apartments skyrocketed. In April 2025, she sold one apartment for 6.9 billion VND, an increase of nearly 290% compared to when she bought it. Just a few months later, the new owner transferred it for 8 billion VND, while the rental price of this house is now only 1-2 million VND higher than when she sold it. The rate of return on capital rental was 10%/year, but now it is only about 3.5%.

Not only Masteri Thao Dien, many areas that used to be "paradises" for apartment rentals are also in a similar situation. In the Phu My Hung urban area (in Tan Hung and Tan My wards), where the profit rate used to be 6%-9%/year, many homeowners have withdrawn. Ms. Minh, a long-time investor, said she owned 2-3 apartments here but sold them all this year. "Previously, a new two-bedroom apartment priced at about 4.2-4.5 billion VND could easily be rented for 20-21 million VND/month. Now this price is difficult to maintain, many apartments are now only 17-18 million VND/month due to competition from new supply. Renting is no longer as "good" as before, and I have to declare a 5% tax every month, so I decided to sell to invest in other channels" - she said.

In the more affordable segment, such as Phu My apartment (Phu Thuan ward), the price of a two-bedroom apartment is about 3.8-3.9 billion VND but the rental price is only 12 million VND/month, or a yield of about 4%. Projects in District 8, Binh Tan, and old District 9 are similar, with prices of 2.7-3.5 billion VND/apartment but the rental price is only 8-10 million VND/month, with a yield of 3%-3.3%.

Not as "easy" as before

Ms. Huong, Sales Manager of a company specializing in renting apartments in Phu My Hung area, admitted that the current price level is too high compared to the rental income. "Current tenants prefer new apartments over old ones, but the cost of capital investment has increased rapidly in the past 4-5 years. Therefore, although the demand for renting has not disappeared, the rate of return for investors has decreased significantly," she said.

The overall market picture also reflects this trend. According to a report by CBRE Vietnam, in the second quarter of 2025, the average primary apartment price in Hanoi reached VND79 million/m², up 13% over the same period last year; the secondary price reached VND50 million/m², up 15%. In Ho Chi Minh City, the primary price reached VND82 million/m², up 29%; the secondary price was VND53 million/m², up 33%. Meanwhile, the gross rental yield in the two major cities was only 3.4%-3.7% in the first 6 months of the year. This figure is significantly lower than that of Bangkok - Thailand (6.2%), Kuala Lumpur - Malaysia (5.1%), Seoul - Korea (4.3%) and only higher than that of Hong Kong - China (3.2%) and Singapore (3.3%).

Mr. Vo Huynh Tuan Kiet, Director of CBRE Vietnam's Residential Project Marketing Department, explained that the main reason for the decline in rental yields is the limited new supply, especially in Ho Chi Minh City - where in the first and second quarters of 2025, only 1,676 new apartments were opened for sale, the lowest since 2015. Most of them are focused on the mid-high-end segment, causing prices to rise. Although Hanoi has a more abundant supply (1,400 units in the second quarter), 100% are in the high-end and luxury segments, also pushing prices up.

In addition to supply and demand factors, additional costs such as maintenance, management, and taxes also erode investors' profits. Not to mention, the trend of short-term rentals via Airbnb and the strong development of social housing and affordable housing are reducing the demand for long-term apartment rentals, especially in the mid-range segment.

However, some experts believe that there are still opportunities if investors know how to choose. Mr. Ta Trung Kien, Director of Wowhome Company, commented: "If you choose the right newly handed over project, good location, many amenities, the rental rate can still reach 4%-5%/year, along with a price increase of 10%-15%/year. The important thing is that you cannot buy in bulk like before, but must carefully calculate each product."

Glimpse of light

CBRE noted that mid-range apartments in the wards of Di An, Lai Thieu, Thu Dau Mot in Ho Chi Minh City are attracting a lot of attention, thanks to the real demand for housing and renting from engineers and experts in industrial parks. Rental profits in these areas are quite attractive, while real estate prices still have room for long-term growth, following industrial development.

Source: https://nld.com.vn/mua-can-ho-de-cho-thue-qua-thoi-hoang-kim-196250825202133905.htm