Common Mistakes Tenants Make When Renting a Factory for Lease in Vietnam

Leasing a factory for lease in Vietnam may seem straightforward, but it involves many details that can cost businesses dearly if overlooked. For tenants entering the industrial real estate market, a poor decision can lead to logistical disruptions, financial strain, and missed growth opportunities.

From small manufacturers to large-scale exporters, many enter lease agreements without fully understanding the risks or evaluating long-term needs. This guide outlines the most common mistakes tenants make when searching for a factory for lease in Vietnam—and more importantly, how to avoid them.

Mistake 1: Focusing Only on Rent Price

Prioritize Low Rent Despite Its Hidden Trade-Offs

Tenants often jump at low rental prices without questioning what’s missing. A factory for lease in Vietnam with cheap rent might cut costs by compromising on structural integrity, lacking safety certifications, or sitting in remote zones with poor logistics. While the upfront rent looks attractive, the long-term expenses—such as high transportation fees, production delays, or costly modifications—can far exceed initial savings.

Instead of fixating solely on the rent per square meter, it’s crucial to understand what’s bundled into the price. Tenants should question why a factory for lease in Vietnam is offered below market rates and conduct physical inspections to confirm facility conditions.

Solution: Consider Total Occupancy Cost

Beyond rent, tenants need to assess the total cost of occupancy. This includes maintenance fees, security, fire protection services, infrastructure usage (e.g., sewage and water systems), and service charges. A factory for lease in Vietnam may present itself as budget-friendly, but hidden costs quickly add up and affect operational efficiency.

Careful financial planning that factors in the whole cost structure will save the tenant more in the long run than chasing low rental prices.

Mistake 2: Ignoring Legal & Compliance Requirements

Overlooked Safety & Permits

Ignoring legal compliance is a mistake no tenant should make when leasing a factory for rent in Vietnam. Some factories may not have the necessary fire safety certifications, building occupancy permits, or environmental licenses required by law. Operating in such facilities puts the tenant at risk of sudden business interruptions, legal penalties, or worse—forced closure.

A common example involves tenants discovering post-lease that the facility is not zoned correctly for manufacturing. Rectifying this mistake may involve complex procedures or even relocation, disrupting production timelines and supply chain commitments.

Solution: Always Verify Legal Compliance

Before signing a lease, tenants should request all compliance documentation from the landlord and cross-check it with legal advisors or industrial consultants. A factory for lease in Vietnam must be fully legal and suitable for the tenant’s intended purpose.

Verifying whether the facility meets national standards on waste disposal, emissions, and worker safety can prevent long-term complications. It’s far better to invest time in due diligence now than face costly consequences later.

Mistake 3: Leasing a Space That Doesn’t Fit Future Growth

No Room to Scale

One of the most overlooked mistakes tenants make when leasing a factory for rent in Vietnam is underestimating future growth. Many businesses sign a lease based solely on current production needs. However, within a year or two, expansion plans might demand larger facilities or additional functions the original space can’t accommodate.

Lack of foresight often forces tenants to relocate prematurely, resulting in wasted resources, disruption in operations, and double expenditures in lease and setup costs. In some industrial zones, moving to a new facility could take months due to limited availability, severely impacting momentum.

Solution: Plan for Long-Term Growth

Tenants should choose a factory for lease in Vietnam with flexibility in mind. Consider modular layouts that allow for easy expansion or properties within parks offering room to grow. It’s also wise to discuss potential expansion clauses in the lease to secure adjacent spaces for future use.

A forward-thinking approach ensures the factory continues to serve the business not just today, but as it scales in the years to come.

Mistake 4: Overlooking Utility Capacity and Technical Specs

Inadequate Facility Specs

Another major pitfall is ignoring the technical specifications of the facility. A factory for rent in Vietnam might look modern on the surface but lack the utility capacity required for the tenant’s operations. Insufficient electrical load, low floor loading capacity, poor drainage systems, or ceiling heights below manufacturing needs are all red flags.

Tenants who overlook these elements often face expensive retrofitting or must halt operations entirely until upgrades are made. Worse, some facilities may not be eligible for such upgrades due to structural limitations or zoning regulations.

Solution: Match Factory to Operational Needs

Before leasing, tenants should create a technical checklist based on their production and warehousing requirements. This should include power capacity (KVA), ventilation, fire protection, access points, and flooring specs.

Inspecting these aspects in-person ensures the chosen factory for lease in Vietnam can meet current and future production standards. Engaging an industrial engineer or site consultant during inspections is a worthwhile investment to prevent mismatch and downtime.

Mistake 5: Not Reviewing the Lease Contract Thoroughly

Hidden Lease Clauses

The lease contract is often filled with legal jargon that tenants may skim over. But failure to review the document in detail can result in unpleasant surprises. A factory for lease in Vietnam might include clauses about penalties for early termination, limitations on property usage, or ambiguous responsibilities for maintenance and repairs.

Some tenants unknowingly sign agreements that favor the landlord heavily, locking themselves into rigid terms that don’t align with business risks or market fluctuations.

Solution: Get Expert Contract Review

Before finalizing any deal, tenants should involve a legal expert familiar with commercial leasing practices. Every factory for lease in Vietnam should come with a clear, fair, and transparent lease agreement.

Check details such as lease renewal options, rent escalation rates, insurance coverage, and force majeure clauses. Having a lease that supports the tenant’s business goals and growth path is just as important as choosing the right location or facility.

Mistake 6: Choosing the Wrong Location

Poor Access & High Costs

Location is a deciding factor that can make or break a factory operation. Some tenants pick a factory for rent in Vietnam based on affordability alone, only to discover that it’s far from ports, highways, or labor pools. This increases transportation costs and delays supply chain operations.

Others settle in less developed zones with limited infrastructure or inconsistent utility services. These choices often seem affordable initially but cost the business more in time, labor, and logistics.

Solution: Prioritize Strategic Positioning

To avoid such pitfalls, tenants should map their supply chain and workforce access needs in detail. A factory for lease in Vietnam should offer strategic access to ports, raw materials, distribution networks, and a stable labor pool.

Investing in a more strategically located property can boost operational efficiency, lower delivery times, and improve employee retention. The cost may be slightly higher, but the long-term returns in productivity and reliability are well worth it.

Mistake 7: Underestimating the Importance of Property Management Quality

Bad Landlord Experience

Tenants often underestimate how much daily operations depend on the landlord or property management. A poorly managed factory for lease in Vietnam can result in unresolved maintenance issues, delays in service requests, or unresponsive communication.

This not only affects the working environment but also leads to unplanned downtime and frustration among the workforce. Bad management might also neglect safety upkeep or allow neighboring tenants to disrupt operations.

Solution: Check Property Management Track Record

Before leasing, tenants should evaluate the property management’s track record. Ask existing tenants about their experiences, review complaint handling procedures, and look into on-site staffing and maintenance routines.

A well-managed factory for lease in Vietnam ensures smoother operations, faster issue resolution, and a better working environment. Choosing a facility with proactive management is just as critical as selecting one with the right technical specs.

Read more:

• Leasing Industrial for Rent in Vietnam: A Step-by-Step Process for Foreign Companies
• Short-Term vs. Long-Term Factory Leasing: Which is Right for Your Business?
• How to Choose the Right Factory for Lease in Vietnam: A Tenant’s Guide

Leasing the right factory for rent in Vietnam involves much more than signing a contract and moving in. Tenants must look beyond surface-level costs to assess legal safety, scalability, utility fit, and long-term operational impact.

By avoiding these common mistakes, businesses can secure a facility that supports both present needs and future growth. Taking the time to ask the right questions and involve the right experts leads to better outcomes and peace of mind.

When it’s time to search for a factory for lease in Vietnam, informed decisions lead to sustainable success.

Are you new to Vietnam and seeking an industrial for rent in Vietnam with nice location, ample space, modern amenities, and dedicated support? Explore the options at CORE5 Vietnam, stay updated with their latest developments, and reach out to their team to schedule a tour of the factory village.