Why are beautiful villas in “golden land” Da Lat rented at super cheap prices?
The beautiful villa at 63 Hồ Tùng Mậu, in Ward 3, Da Lat City, is currently being rented out at a surprisingly low price. This villa is located on prime land, with a total area of nearly 920 m2. It consists of a 3-star villa with a floor area of almost 290 m2 and a parking area of about 57 m2. Its strategic location is right next to Kim Cúc roundabout. From here, famous places such as Da Lat night market, Lam Vien Square, Dinh II, Xuan Huong Lake, and the interprovincial bus station are all within a few hundred meters to less than 2 km.
On March 22, 2024, the People’s Committee of Da Lat City submitted a proposal to the Department of Finance regarding the review and appraisal of the rental price adjustment for villa number 63 Hồ Tùng Mậu, leased by the Branch of Vietnam Airlines – Vietnam Airports Corporation in Da Lat. This issue was also previously addressed in a proposal submitted in September 2023.
According to the signed appendix to the contract number 03 in May 2021 between the People’s Committee of Da Lat City and the Branch of Vietnam Airlines – Central Vietnam Airports Corporation (later merged into the Branch of Vietnam Airlines – Vietnam Airports Corporation), the rental price for the 2020-2024 period is 7,986,000 VND per month. This price has increased by 10% compared to the 2015-2019 period. However, it does not take into account the rental price specified in Decision 259/QĐ-UBND issued on February 5, 2016 by the Provincial People’s Committee of Lam Dong. The rental agreements signed in 2006 and subsequent appendixes do not include any provisions for adjusting the rental price when there are changes in the state’s rental rates.
Therefore, the rental price of this villa has remained at around 8 million VND per month due to the strict compliance of the lease agreement signed by Da Lat City.
The Financial Loss
The People’s Committee of Da Lat City acknowledges that the current rental price for villa number 63 Hồ Tùng Mậu is relatively low compared to similar rented villas. Therefore, it is necessary to review and adjust the rental price for the 2020-2024 period to avoid revenue loss and ensure fairness compared to other rented villas.
In a report by the People’s Committee of Da Lat City, the Branch of Vietnam Airlines – Vietnam Airports Corporation disagreed with the price adjustment for the 2020-2024 rental period. They claimed that the appendix to contract number 03 was signed based on document number 2258/UBND issued on April 19, 2021, by the People’s Committee of Da Lat City, which referenced Decision 259/QĐ-UBND issued on February 5, 2016, by the Provincial People’s Committee of Lam Dong. Therefore, they requested the rental price to remain at around 8 million VND per month as stated in the signed appendix.
However, the People’s Committee of Da Lat City explained that although the document states as such, the calculation method specified in Decision 259/QĐ-UBND has not been applied. According to the research conducted by reporters, Decision 259/QĐ-UBND, issued by the Provincial People’s Committee of Lam Dong in 2016, sets the average rental price for a 3-star villa at 57,000 VND/m2 and for a parking area (considered as a grade 4 house) at 25,000 VND/m2.
However, when renting a villa, factors such as location, utilization coefficient, construction quality, convenience factors, etc., must be taken into account to calculate the price, which may increase or decrease compared to the general price. Accordingly, the rental price for villa 63 Hồ Tùng Mậu should be 62,700 VND/m2 (almost 18.2 million VND per month) and for the parking area, it should be 22,500 VND/m2 (almost 1.3 million VND per month). In total, the rental price for this villa would be nearly 19.5 million VND per month.
Considering that the rental period from January 1, 2020, until now is 40 months, the price difference between the actual rental price (around 8 million VND) and the rental price calculated according to Decision 259/QĐ-UBND with the utilization coefficient (around 19.5 million VND per month) means that the rental of villa 63 Hồ Tùng Mậu has caused a loss of about 460 million VND.
This situation highlights the need to review and adjust the rental prices of properties in order to prevent financial losses and ensure fairness in the rental market. Da Lat City is actively addressing this issue to protect the interests of both tenants and landlords.
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