In Vietnam, there are plenty of ways to invest, and owning land or an apartment is often towards the top of one’s list. No matter who you are or what motivates you to go down the path of ownership, Homebase seeks to not only make it easier to facilitate a purchase, but also serves as a guide to making the right choices.
Vietnam’s real estate market is on a long hot streak that most agree won’t slow anytime soon. Many families across the country have elevated their economic status through land purchases over the last two decades, and owning property has become among the most valued life goals outside of a healthy family and a good job for middle-class Vietnamese. Expats and foreigners have also taken notice of the investment opportunities here, especially as the government softens foreign ownership regulations.
Each of these groups have overlapping and disparate considerations and needs as they explore the ownership process. For Vietnamese (or mixed couples), these are typically economic in nature, with access to sufficient capital being the main requirement; whereas expats and those living outside of Vietnam may have capital needs, but require guidance in navigating their way through local regulations and processes.
When my wife (Vietnamese) and I (American) decided to jump into the Vietnamese real estate market last year, we began to explore different areas and projects based on recommendations from friends, followed by visits across southern and central Vietnam. While this proved to be a good starting point for the process, we realized that as novices we lacked the skills to accurately assess the necessary legal and environmental considerations. Was the developer running a scam? Was the land registered correctly with the proper paperwork in-hand? Was the soil of the right variety for building a structure, or just farmland? Would the land erode into the nearby river?
There were plenty of financial considerations as well - did we need to take a bank loan? Should we use our limited funds to buy one property, or spread it around to cheaper, higher-risk plots? Did we want to live on the property, or just invest?
For a while we idled in the face of these many questions, until a friend of mine told me about Homebase, a startup company which he had just used to purchase a property in Thu Duc City.
The service’s main goal is to provide a fully customizable financial tool that allows anyone to own any type of property (apartment, landed property, or land) in Vietnam. This provides an alternative to traditional bank loans that is more inclusive and accessible, especially to foreigners and entrepreneurs. Homebase serves the normally underserved customers (foreigners, Vietnamese who underqualify for bank loans, those exceeding the qualified age range, and more), and buyers have a say in the payment amount and schedule that will be the most convenient choice for them.
For my wife and I, the problems mainly lied in our clueless navigation of the Vietnamese real estate market. We had a difficult time selecting the most suitable pieces to invest in mostly because we didn’t have the tools and expertise to evaluate them. Homebase resolves this pain by offering us a fast track to land ownership while they handle almost everything else.
Here is a quick run-down of working with Homebase:
Given how lost we were in the pool of options for land ownership, I’m grateful that Homebase took over the process and spared us the legal paperwork that could be a nuisance for foreigners (and also Vietnamese). Once we selected a land slot, we only needed to chime in when our signatures and opinions were needed.
Perhaps one of the best features that Homebase offers is flexibility for ownership. They can support up to 90% of the capital upfront (most banks in Vietnam top out at 70%) to help more buyers reach their ownership goals. The customer then has the option to sell the property and split the profits proportionally with Homebase at the end of the contract term, or buy Homebase out at any time and own the property outright.
You can refer to the table below to see how Homebase compares with traditional bank loans:
In addition, the company offers a unique structure. Whereas bank loans are principal plus interest, Homebase agrees with you in advance on a fixed buyback price at the beginning. This allows you to plan a payment schedule that works best for you. The contract will range from 6 month to 10 years.
On top of saving time when using their services (only a few days before our family moved in), Homebase is also a cost-effective option to consider. According to their calculation, customers will save up to 50% each month with Homebase compared to alternatives.
Due to the co-investment nature of most of their deals, they are a stakeholder in the purchased land. For us, this was an important element because instead of assessing the value and risk of the property on our own, Homebase sent one of their estate experts to audit it — based on profit potential, legal/paperwork and quality —before we went ahead with the transaction.
They also help foreign investors purchase Vietnamese real estate, and thus Homebase offers guidance and tools for transferring funds, finding the right property and navigating legal issues. I have one such friend who is working with Homebase to fulfill his lifelong dream of durian farm ownership.
After running through our situation with a Homebase agent, it turned out that some properties we were considering were better options than others, and we settled on a piece of land in Bảo Lộc, not far from Da Lat.
After a straightforward paperwork process, in which a Homebase representative did all the heavy lifting and dealt directly with the developer, we transferred some money into Vietnam from our US account and paid the deposit. Within a few days, the transaction was complete.
Taken together, I think this model is a great fit for atypical homebuyers: Foreigners who aren’t eligible for bank mortgages, Vietnamese without a steady income to prove, and those above the age range for loans in Vietnam (over 65 years old).
As we were considering our options to exit the market, it turned out that Homebase could help with property selling as well. While we’d love to live in Bảo Lộc, given our lifestyle and small child, it’s not in the cards for now. To that end, unlike my friend, who will likely own his durian farm until the day he dies, we plan to sell the property when our financing term is completed in three years. Given that the process of selling a property can be just as painful as that of buying one, Homebase addresses that pain point by providing sellers with instant offers on their properties, allowing them to sell a property to Homebase in a matter of days, instead of going through a long and expensive listing process with their “Sell to Homebase” plan.
Here’s how it works:
- Check with Homebase about the property you want to sell and let them evaluate it.
- Based on market data, property information provided, and prices of the same property types, Homebase will make a cash offer for you.
- If you accept the offer, you will receive the payment in cash within 72 hours.
This is a piece of knowledge I learned about doing business in Vietnam: For every transaction, there is usually an intricate route to ownership that involves a lot of paperwork, dealing, verifying, notarizing in-person, and more. By handing all these tasks to their in-house team of experts on taxes and laws, Homebase streamlines the experience and minimizes the effort that customers like us usually spend on it.
Though Homebase’s offerings are unique in the Vietnamese market and fill a need for many, the company’s service follows in the footsteps of other similar companies in the US and Europe - including Divvy Homes, Opendoor and Zerodown - that seek to empower people to become home/property owners.
In an effort to make access to its services even easier, Homebase has just re-launched its website with clear explanations of the products, how it compares to traditional banking options, and a calculator to help you estimate your payment schedule first-hand.
For my wife and I, who knew we wanted to make our stake in Vietnam’s lucrative real estate market, Homebase was the key to unlocking access to capital and demystifying the land ownership process. For others, Homebase truly “serves the underserved” by providing an alternative to traditional bank mortgages that make homeownership a dream come true.
You can learn more about Homebase at https://homebase.com.vn/ or contact them at +84 94 823 00 33.
