Jakarta rental: IDR 18.74bn purchase and IDR 89.95m monthly rent — does it work?

[timo.cedar]

This would be our first rental, so I may be missing an obvious cost. It is a 1-bed duplex in Jakarta at IDR 18,740,000,000, with expected rent of IDR 89,950,000 per month. That gives a headline gross yield of roughly 5.8%.

The building appears sound, but the building reserves could change the result materially. My conservative model already includes vacancy, management, routine maintenance and a separate allowance for one larger repair.

Which Jakarta-specific or building-level cost am I most likely underestimating? Also, what net yield would compensate you for the risk here?

 

[xavi.page]

I would focus first on recurring building charges and any owner contributions to major works. Ask for actual budgets and payment history rather than relying on the current quoted charge. Also establish whether insurance, property tax, furnishing replacement and tenant-finding costs are in your model. A 5.8% gross yield does not leave unlimited room for omissions.

 

[far_hill]

How firm is the IDR 89,950,000 rent? Is it supported by completed leases for genuinely comparable 1-bed units, or is it an asking figure? With a duplex, layout and usable space can make comparisons awkward. I would model a lower-rent case as well as vacancy, because turnover can hurt through both lost rent and re-leasing costs.

 

[jade_deals]

Are you buying in cash or financing it? The property produces IDR 1,079,400,000 annually before costs. On the stated purchase price, a 4% net yield would require at least IDR 749,600,000 after annual expenses, leaving about IDR 329,800,000 for everything else. That is a useful ceiling to test against your detailed budget.

 

[jade_deals]

One caveat to my calculation: the denominator should be total money committed, not merely the IDR 18.74bn price. If acquisition expenses, initial furnishing or near-term building contributions sit outside that number, the true yield will be lower. Financing would then need a separate cash-flow stress test rather than being folded into the property’s unlevered yield.

 

[teaAndBlueprint]

I would not choose a required net yield until the exit and tenant pool are clearer. A stable building with broad rental demand is different from a distinctive duplex that may take longer to re-let or sell. Still, if the deal only works at full quoted rent, minimal turnover and no special building contribution, I would regard the margin as too thin.

 

[timo.cedar]

Thanks, this identifies the weak points. The IDR 89,950,000 is expected rent, not income from a signed lease, so I will treat verification of comparable completed leases as essential. I’ll also request the building budgets and contribution history, separate recurring charges from major works, and rerun the yield using total acquisition and furnishing costs. I’ll test lower rent, a longer vacancy and financing changes rather than relying on the 5.8% headline.