What is Shophouse? Things to know about shophouse

What is Shophouse? Things to know about shophouse

Shophouse is probably not a new concept for real estate investors. However, despite the positive reviews, this product is still not really understood and properly recognized for its potential.
Real estate investment at this stage is probably the time of land plots, townhouses and apartments. However, another segment is also considered a "golden egg" called commercial real estate . Shophouse can be considered as a representative of one of the typical types of the segment, appearing commonly in residential and urban projects today.

The exact concept of shophouse

Shophouse is a form of apartments, houses combined with commercial stores, also known as commercial townhouses. This is a form of real estate that carries two functions at the same time, including the function of serving real living needs and the function of using it as a ground for business forms.

Because of this versatile nature, although shophouse appeared not long in the Vietnamese market, it soon attracted the attention and interest of many investors.

The typical advantages of shophouse

Shophouse owns many advantages in terms of area and location; often present in commercial centers or big cities, where there are densely populated areas. If it belongs to urban projects, it is definitely located in a central location, around major roads and convenient to move.
In general, the current shophouses have the following outstanding advantages:

    Prime location: As mentioned, shophouses Shophouses are usually located on the ground floor of large apartment complexes, or on the main street front, crowded through it, ensuring business or rental. good shophouse; at the same time creating convenience in moving, quick connection.
    Good liquidity: Usually, shophouses serving residential areas will have a smaller quantity than other items. The number of shophouses only accounts for about 2-3% of the total products or higher, it can reach 5% if the project is large. The quantity is small but the demand is high, so shophouse always has a high competition rate, so the liquidity is also better, it is easy to find potential customers.
    Smart design: the purpose of shophouses is to have a private space for family activities but at the same time still use it well for business, so the designs are a unified whole but still have separate separation.
    High profit: the exploitation rate of shophouses is up to about 8-12%/year, much higher than savings or investment in securities. Besides, over time, the property value that shophouse brings will inevitably increase, renting or self-development is also financially beneficial.

What are the limitations of shophouse?

Despite possessing attractive advantages, this type is not necessarily without disadvantages. First of all, it must be mentioned that the selling price is higher than that of townhouses and apartments in the project . Real estate in a central location, multi-function certainly does not have a low selling price.
Second, shophouse depends greatly on the density and development of the surrounding population . This type mainly relies on the needs of services and utilities of the crowd to develop, so if it does not achieve a good population rate, the mining performance will certainly not be as expected.

Third, the time to own a shophouse is limited . Normally it will be 50 years, being granted a red book in accordance with the law. The time limit also affects the liquidity and profitability in the long run.

Above is some general information about shophouse. For investors who intend to put money down, understanding the product is a very important foundation to determine the suitability and feasibility of the plan.