Investment Property in Medan

Investment Real Estate in Medan

Investment Property in Medan
Investment Property in Medan

Medan 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 Medan.

Search Map of Medan Investment Real Estate

Medan (Indonesian pronunciation: [meˈdan] (listen); English: ) is the capital and largest city of the Indonesian province of North Sumatra, as well as a regional hub and financial centre of Sumatra. According to the National Development Planning Agency, Medan is one of the four main central cities of Indonesia, alongside Jakarta, Surabaya, and Makassar. As of the 2020 Census, Medan has a population of 2,435,252 within its city limits, and over 3.4 million in its built-up urban area, making it the fourth largest urban area in Indonesia. The Medan metropolitan area—which includes neighbouring Binjai, Deli Serdang Regency, and a part of Karo Regency—is the largest metropolitan area outside of Java, with 4,744,323 residents counted in the 2020 Census. Medan is a multicultural metropolis and a busy trading city bordered by the Strait of Malacca, making it one of the major economic cities in Indonesia. A gateway to the western part of Indonesia, Medan is supported by the Port of Belawan and Kualanamu International Airport, both of which are connected to the city centre via toll roads and railways.

The city was founded by the Guru Patimpus, a Karonese man who named the area of swampy land at the confluence of Deli River and Babura river Kampung Medan Putri. It later became a part of the Deli Sultanate which was established in 1632. In the late 19th century, colonial Dutch seeking new plantation areas chose Medan and Deli as the newest plantation hubs with Deli Company. They set up tobacco plantations, transforming Medan into a trade hub within several years, and earning Medan the nickname Het Land Dollar, meaning “the land of the money”. The city was well known due to the importance of tobacco as an export to Europe and the West. The rapid development of Medan came with the Deli Railway, which was established for shipping tobacco, rubber, tea, timber, palm oil, and sugar from Medan to the Port of Belawan, and then exported around the world. Medan was the capital of the State of East Sumatra before it became the provincial capital of North Sumatra. Medan was dubbed Parijs van Sumatra due to the city’s resemblance to Paris..

Medan is a financial, trading, and economic center not only for North Sumatra province but for the whole Sumatra Island. For many foreign investors, Medan is not only rich in culture and history but also presents itself as a dynamic economic hub of the world. As the robust capital of North Sumatra, Medan offers a large pool of human capital and talent, lower operational costs, a strategic location close to Singapore and Malaysia, and diverse natural resources. The city is known as a trading hub for palm oil export. In North Sumatra, there are approximately 4 million acres of palm oil plantations. Medan is one of the progressive markets in trading. About 60% of the economy in North Sumatra is backed by trading, agriculture, and processing industries.

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The financial stability of Medan 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 Medan

 

Renting out your Medan buy-to-rent investment property can grow wealth and income.

 

Whatever your goals with investment property in Medanare – preparation is key:

 

  • Set goals based on how much rental yield will be required and the local rental yield rates in Medan and be prepared to change your initial outlook.
  • Thoroughly research the Medan location with a special emphasis on fringe areas outside the main Medan metropolis that may be valued lower than their better-known neighbours. Rental yields of around 5% are still attainable in certain areas of Medan.
  • Ensure that your target investment property in Medan appeals to professionals. This is a demographic that ensures maximum income and low voids.
  • Finding and vetting suitable tenants is a job ideally left to the professionals. Working with an established letting agent with local knowledge and experience of property legislation will give you the best chance of success.

Flipping Investment Property in Medan

Flipping property in Medan

 

Flipping property is when we advise clients to buy a Medan 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 Medan market has a time to react to the renovation.

 

The Flipping Strategy in Medan

 

Investment property flipping in Medan 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 Medan real estate investments are sometimes referred to by professionals as ‘distressed’ Medan real estate.

 

What is distressed Medan property:

 

  • Medan property in need of renovation
  • Medan real estate with a change of puropose and use
  • Oversold Medan property
  • Bank repossessions in Medan

 

Put simply, long term investors in Medan purchase the property, renovate it and make it a lot more attractive to potential buyers.

 

Calculate profit that you make from Medan investment property flipping:

 

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Medan property purchase price: $220,000

Renovation costs: $20,000

Other costs: $25,000

Property sale price: $400,000

Profit: $135,000

 

Experienced property developers in Medan use a minimum profit value of 22% when looking at potential Medan projects. The reason for this is because there are lots that can go wrong in Medan 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 Medan 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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