Investment Real Estate in Jakarta
Jakarta property investment can be a worthwhile venture if you are selective with the areas you choose to invest in. If not, you could find that your investment suffers due to low rental yields, dwindling demand, and slow property price growth in many parts of Jakarta.
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Jakarta (; Indonesian pronunciation: [dʒaˈkarta] (listen), Betawi: Jakarte), officially the Special Capital Region of Jakarta (Indonesian: Daerah Khusus Ibukota Jakarta) is the capital and largest city of Indonesia. Lying on the northwest coast of Java, the world’s most populous island, Jakarta is the largest city in Southeast Asia and serves as the diplomatic capital of ASEAN.
The city is the economic, cultural, and political centre of Indonesia. It possesses a province-level status and has a population of 10,609,681 as of mid 2021. Although Jakarta extends over only 664.01 km2 (256.38 sq mi), and thus has the smallest area of any Indonesian province, its metropolitan area covers 9,957.08 km (3,844.45 sq mi), which includes the satellite cities Bogor, Depok, Tangerang, South Tangerang, and Bekasi, and has an estimated population of 35 million as of 2021, making it the largest urban area in Indonesia and the second-largest in the world (after Tokyo). Jakarta ranks first among the Indonesian provinces in human development index. Jakarta’s business and employment opportunities, along with its ability to offer a potentially higher standard of living compared to other parts of the country, have attracted migrants from across the Indonesian archipelago, making it a melting pot of numerous cultures.
Jakarta is one of the oldest continuously inhabited cities in Southeast Asia. Established in the fourth century as Sunda Kelapa, the city became an important trading port for the Sunda Kingdom. At one time, it was the de facto capital of the Dutch East Indies, when it was known as Batavia. Jakarta was officially a city within West Java until 1960, when its official status was changed to a province with special capital region distinction. As a province, its government consists of five administrative cities and one administrative regency. Jakarta is an alpha world city and is the seat of the ASEAN secretariat. Financial institutions such as the Bank of Indonesia, Indonesia Stock Exchange, and corporate headquarters of numerous Indonesian companies and multinational corporations are located in the city. In 2021, the city’s GRP PPP was estimated at US$602.946 billion.
Jakarta’s main challenges include rapid urban growth, ecological breakdown, gridlocked traffic, congestion, and flooding. Jakarta is sinking up to 17 cm (6.7 inches) annually, which coupled with the rising of sea levels, has made the city more prone to flooding. Hence, it is one of the fastest-sinking capitals in the world. In response to these challenges, in August 2019, President Joko Widodo announced that the capital of Indonesia would be moved from Jakarta to the planned city of Nusantara, in the province of East Kalimantan on the island of Borneo.
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The financial stability of Jakarta has translated into a real estate market that rewards forward planning and a willingness to look beyond areas of traditional affluence.
Buy to Rent in Jakarta
Renting out your Jakarta buy-to-rent investment property can grow wealth and income.
Whatever your goals with investment property in Jakartaare – preparation is key:
Flipping Investment Property in Jakarta
Flipping property in Jakarta
Flipping property is when we advise clients to buy a Jakarta property below market value, renovate it and then make a profit by selling it at a higher price, all within a few months, and often before the Jakarta market has a time to react to the renovation.
The Flipping Strategy in Jakarta
Investment property flipping in Jakarta is a simple strategy. You find a property that is in need of renovation from our list and purchase it for a low price. These type of Jakarta real estate investments are sometimes referred to by professionals as ‘distressed’ Jakarta real estate.
What is distressed Jakarta property:
- Jakarta property in need of renovation
- Jakarta real estate with a change of puropose and use
- Oversold Jakarta property
- Bank repossessions in Jakarta
Put simply, long term investors in Jakarta purchase the property, renovate it and make it a lot more attractive to potential buyers.
Calculate profit that you make from Jakarta investment property flipping:
Final Selling Price less Cost of Purchase less Costs = Profit
Here is an example:
Jakarta property purchase price: $220,000
Renovation costs: $20,000
Other costs: $25,000
Property sale price: $400,000
Experienced property developers in Jakarta use a minimum profit value of 22% when looking at potential Jakarta projects. The reason for this is because there are lots that can go wrong in Jakarta property flipping and working on a potential margin of 22% should still leave a good margin of error.
Property Secured Investments is a Private Equity fund that invests in Jakarta and many other towns and cities across Europe. The fund is only available to Sophisticated Investors and closed to United States Citizens. While this is not an offer or promotion of the fund, more information can be found at the website
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