Jakarta 2-bed villa at 3.5% gross — what am I missing?

[nova.oak]

I am torn between setting a minimum yield first and modelling a bad year before deciding whether the price works. The second approach feels more realistic for this 2-bed Jakarta villa, listed at IDR 21,110,000,000 with projected monthly rent of IDR 61,390,000. That produces IDR 736,680,000 a year, or about 3.5% gross.

The building looks sound, but there is not much margin once ordinary operating costs are deducted. I still need credible allowances for downtime, management, repairs, insurance, property tax, financing changes and the combined cost of tenant turnover. If the rent is supported by completed lettings, would you judge the deal by its stressed net cash flow? If it is only an asking estimate, is the thin gross return enough reason to walk away before spending more time on it?

 

[openTheJournal]

The arithmetic is right, but 3.5% gross leaves very little room for surprises. I’d focus on tenant turnover: vacancy is only part of it, because cleaning, repairs, furnishing replacement and re-letting costs can arrive together.

Also clarify whether IDR 61,390,000 is an achieved comparable rent or an asking estimate, and whether the owner pays any shared-area or estate charges. Rather than choose a target net yield first, stress-test a bad year; if modest downtime plus one major repair wipes out the annual return, the purchase price looks too high.