brick.balanced
Landlord
I’m comparing a Jakarta coastal home with alternatives in cheaper Indonesian markets. The Jakarta property offers only a modest current yield, but the case for it is stronger employment and transport fundamentals. The cheaper options produce more cash now, although they appear less liquid.
My concern is letting an appreciation story excuse weak numbers. I’m considering requiring a minimum cash return before assigning any value to future growth. For a fair comparison, I would calculate net cash flow after a realistic vacancy allowance, management costs, maintenance reserves, insurance, property tax and tenant turnover, then test how financing changes affect the result.
How would you set that minimum return, and which assumptions would you stress most heavily? Please distinguish actual Indonesian legal requirements from personal risk tolerance or investment preference.
My concern is letting an appreciation story excuse weak numbers. I’m considering requiring a minimum cash return before assigning any value to future growth. For a fair comparison, I would calculate net cash flow after a realistic vacancy allowance, management costs, maintenance reserves, insurance, property tax and tenant turnover, then test how financing changes affect the result.
How would you set that minimum return, and which assumptions would you stress most heavily? Please distinguish actual Indonesian legal requirements from personal risk tolerance or investment preference.