Authored by the expert who managed and guided the team behind the Indonesia Property Pack
Everything you need to know before buying real estate is included in our Indonesia Property Pack
Renting out property in Indonesia as a foreigner is absolutely possible in 2026, but you need to understand the specific ownership structures and tax rules that apply to non-citizens.
This guide breaks down everything from gross yields to neighborhood performance, so you can make an informed decision about your Indonesian rental investment.
We constantly update this blog post with the latest data and regulatory changes to keep you informed.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Indonesia.
Insights
- Indonesia's gross rental yield in 2026 averages around 5.5%, but smaller units in renter-heavy Jakarta suburbs like Bintaro and Bekasi can push yields closer to 7% or 8%.
- The 10% final tax on gross rent in Indonesia is non-negotiable and immediately reduces your net yield before any other costs, which many foreign investors underestimate.
- Bali short-term rentals show roughly 65% average occupancy with nightly rates around IDR 1.5 million, but tens of thousands of active listings mean saturation risk is real.
- Jakarta's rental apartment market currently has high vacancy, so pricing competitively is more important than maximizing asking rent if you want consistent cashflow.
- Foreigners cannot own freehold land (Hak Milik) in Indonesia, but can hold property under Hak Pakai (right to use) or strata-type apartment rights with specific conditions.
- Short-term rental licensing in Indonesia goes through the OSS (Online Single Submission) system under specific business activity categories like "Pondok Wisata."
- Sudirman, Thamrin, and Kuningan in Jakarta consistently attract the highest long-term rents due to CBD access and expat demand, with 1-bedrooms reaching IDR 13 million monthly.
- Budget roughly 35% of gross rent for total holding costs on a long-term Indonesian rental, including the 10% tax, property management, maintenance, and vacancy reserves.
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
Can I legally rent out a property in Indonesia as a foreigner right now?
Can a foreigner own-and-rent a residential property in Indonesia in 2026?
As of early 2026, foreigners can legally own and rent out residential property in Indonesia, but only through specific ownership structures designed for non-citizens rather than the freehold title available to Indonesian nationals.
The main ownership arrangements available to foreigners include Hak Pakai (right to use) for land and buildings, as well as strata-title rights for apartments under the framework established by Government Regulation PP 18/2021.
The single most common restriction foreigners face is that they cannot hold Hak Milik (freehold) title in their personal name, and eligibility for foreigner-permitted titles comes with conditions including minimum property values and residency or permit requirements set by Indonesia's ATR/BPN implementing rules.
If you're not a local, you might want to read our guide to foreign property ownership in Indonesia.
Do I need residency to rent out in Indonesia right now?
You do not need to live in Indonesia to rent out your property, as remote ownership is practically feasible as long as you have a local property manager handling day-to-day operations and compliance.
If you earn rental income in Indonesia, you should assume you need a tax identity pathway (NPWP), especially if you want to sign proper leases, receive rent through banks, and file taxes correctly under Indonesia's final income tax rules.
While there is no strict legal requirement for a local bank account, having an Indonesian bank account makes rent collection far more practical because it creates a clean paper trail for the 10% final tax on gross rental income.
Managing a rental remotely is definitely possible in Indonesia in 2026, but you will need local boots on the ground for showings, tenant issues, and staying compliant with the government's increasing focus on licensing unlicensed accommodations.
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What rental strategy makes the most money in Indonesia in 2026?
Is long-term renting more profitable than short-term in Indonesia in 2026?
As of early 2026, the more profitable rental strategy in Indonesia depends heavily on location, with short-term rentals outperforming in Bali's tourism hotspots while long-term rentals provide steadier returns in Jakarta and other work-driven cities.
A well-managed short-term rental in Bali can generate roughly IDR 180 to 280 million annually (around USD 11,000 to 17,500 or EUR 10,000 to 16,000), while a comparable long-term rental in Jakarta typically brings in IDR 100 to 160 million per year (around USD 6,200 to 10,000 or EUR 5,700 to 9,200).
Properties in Seminyak, Canggu, and Ubud tend to favor short-term renting financially because they attract international tourists willing to pay premium nightly rates, whereas units near Jakarta's CBD or university districts perform better as long-term rentals due to consistent domestic demand.
What's the average gross rental yield in Indonesia in 2026?
As of early 2026, the average gross rental yield for residential properties in Indonesia is approximately 5.5%, based on median asking rents compared to median purchase prices across major investable cities.
The realistic gross yield range in Indonesia spans from about 4% in prime, expensive districts to around 8% in more affordable but liquid rental markets like Greater Jakarta's suburban belt.
Studios and small 1-bedroom apartments typically achieve the highest gross rental yields in Indonesia because their lower purchase prices relative to rent create a more favorable ratio than larger family-sized units.
By the way, we have much more granular data about rental yields in our property pack about Indonesia.
What's the realistic net rental yield after costs in Indonesia in 2026?
As of early 2026, the average net rental yield after all costs for residential properties in Indonesia is approximately 3.2% for long-term rentals, with short-term rentals in Bali potentially reaching 5% to 7% net if professionally managed.
The realistic net yield range most landlords experience in Indonesia runs from about 2% in high-vacancy or premium-priced areas up to around 5% in well-located, competitively priced rental stock.
The three main cost categories that reduce gross to net yield specifically in Indonesia are the unavoidable 10% final tax on gross rent (not profit), condominium service charges and sinking funds which can be surprisingly high in Jakarta towers, and the vacancy drag that hits especially hard in Jakarta's oversupplied rental apartment market.
You might want to check our latest analysis about gross and net rental yields in Indonesia.
What monthly rent can I get in Indonesia in 2026?
As of early 2026, typical monthly rents in Jakarta's investor-friendly areas run around IDR 6 million for a studio (USD 375 / EUR 345), IDR 10 million for a 1-bedroom (USD 625 / EUR 575), and IDR 17 million for a 2-bedroom (USD 1,060 / EUR 975).
A realistic entry-level monthly rent for a decent studio in Jakarta ranges from IDR 4 million to IDR 8 million (USD 250 to 500 / EUR 230 to 460), depending on building quality and neighborhood.
A typical 1-bedroom apartment in Indonesia's main cities rents for IDR 7 million to IDR 13 million monthly (USD 440 to 810 / EUR 400 to 750), with Jakarta's CBD commanding the upper end of that range.
A mid-to-high 2-bedroom apartment in Jakarta or Bali rents for IDR 12 million to IDR 22 million monthly (USD 750 to 1,375 / EUR 690 to 1,265), though Bali's furnished villas can push well beyond that range.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Indonesia.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Indonesia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What are the real numbers I should budget for renting out in Indonesia in 2026?
What's the total "all-in" monthly cost to hold a rental in Indonesia in 2026?
As of early 2026, the total "all-in" monthly cost to hold a typical rental property in Indonesia is approximately IDR 3.5 million (USD 220 / EUR 200) on a property generating IDR 10 million in monthly rent, representing roughly 35% of gross income.
The realistic monthly holding cost range for standard Indonesian rental properties spans from IDR 2 million to IDR 5 million (USD 125 to 310 / EUR 115 to 290), depending on building fees, management arrangements, and maintenance needs.
The single largest cost contributor in Indonesia is the 10% final income tax on gross rent, which alone takes IDR 1 million out of every IDR 10 million collected and cannot be reduced through expense deductions.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Indonesia.
What's the typical vacancy rate in Indonesia in 2026?
As of early 2026, the typical vacancy rate for rental properties in Indonesia ranges from 10% to 15% annually, though Jakarta's oversupplied condo market pushes vacancy closer to 15% to 20% in many buildings.
Landlords in Indonesia should realistically budget for 1.5 to 2 months of vacancy per year, because tenant turnover, lease negotiation gaps, and Jakarta's competitive rental market make 100% occupancy unrealistic.
The main factor causing vacancy variation across Indonesian neighborhoods is proximity to employment centers and transport hubs, with CBD-adjacent areas like Sudirman experiencing faster tenant replacement than peripheral locations.
Tenant turnover in Indonesia typically peaks around April and May when work contracts and academic years reset, creating a window of higher vacancy risk that landlords should plan for.
We have a whole part covering the best rental strategies in our pack about buying a property in Indonesia.
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Where do rentals perform best in Indonesia in 2026?
Which neighborhoods have the highest long-term demand in Indonesia in 2026?
As of early 2026, the top three neighborhoods with the highest overall long-term rental demand in Indonesia are Sudirman, Kuningan, and Kemang in Jakarta, all benefiting from strong employment access and established expat communities.
Families looking to rent in Indonesia gravitate toward Pondok Indah, Cilandak, and Sanur (Bali), where international schools, green space, and quieter residential environments create consistent year-round demand.
Students drive strong long-term rental demand in Depok (near Universitas Indonesia), Dago in Bandung, and the Seturan area of Yogyakarta, where affordable units near campus fill quickly each academic cycle.
Expats and international professionals cluster in Kuningan, Mega Kuningan, and Kemang in Jakarta, as well as Seminyak and Canggu in Bali, where lifestyle amenities and English-friendly services support premium rental demand.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Indonesia.
Which neighborhoods have the best yield in Indonesia in 2026?
As of early 2026, the top three neighborhoods with the best rental yield in Indonesia are Bintaro, BSD City, and Bekasi (select areas), where moderate purchase prices combined with solid commuter demand create favorable rent-to-price ratios.
These top-yielding Indonesian neighborhoods typically deliver gross rental yields in the 6% to 8% range, compared to 4% to 5% in Jakarta's premium central districts where property prices outpace rental growth.
The main characteristic allowing these neighborhoods to achieve higher yields is their position as "gateway commuter zones" with good transport links to Jakarta's CBD, meaning tenants accept the location trade-off while landlords benefit from lower entry costs.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Indonesia.
Where do tenants pay the highest rents in Indonesia in 2026?
As of early 2026, the top three neighborhoods where tenants pay the highest rents in Indonesia are Sudirman/Thamrin, SCBD/Senopati, and Menteng in Jakarta, with Bali's Seminyak also commanding premium rates for furnished villas.
A standard 1-bedroom apartment in these premium Jakarta neighborhoods typically rents for IDR 12 million to IDR 20 million monthly (USD 750 to 1,250 / EUR 690 to 1,150), while 2-bedrooms reach IDR 18 million to IDR 30 million (USD 1,125 to 1,875 / EUR 1,035 to 1,725).
These neighborhoods command Indonesia's highest rents because they offer walking-distance access to corporate headquarters, embassies, and luxury retail, combined with building amenities and security standards that meet international expectations.
The typical tenant profile in these highest-rent Indonesian neighborhoods includes senior expatriate executives on corporate housing packages, embassy staff, and wealthy local professionals who prioritize convenience and prestige over value.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Indonesia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What do tenants actually want in Indonesia in 2026?
What features increase rent the most in Indonesia in 2026?
As of early 2026, the top three property features that increase monthly rent the most in Indonesia are flood-free location with good drainage reputation, reliable high-speed internet with backup power options, and secure parking with 24-hour security staffing.
A flood-free location in Jakarta, which is the single most valuable feature, can add a 15% to 25% rent premium because tenants have learned the hard way that micro-location flood risk varies dramatically even within the same neighborhood.
One commonly overrated feature that Indonesian landlords invest in but tenants do not pay much extra for is luxury finishing materials like imported marble or designer fixtures, which matter far less than functional basics like air conditioning quality and water pressure.
One affordable upgrade that provides a strong return on investment for Indonesian landlords is installing a quality water filtration system and ensuring consistent water pressure, because poor water quality is a common complaint that tenants will pay to avoid.
Do furnished rentals rent faster in Indonesia in 2026?
As of early 2026, furnished apartments in Indonesia typically rent 2 to 4 weeks faster than unfurnished units, with the difference being most pronounced for studios and 1-bedrooms targeting expats and short-term corporate tenants.
Furnished apartments in Indonesia command a rent premium of roughly 15% to 30% over unfurnished equivalents, though this premium must be weighed against higher maintenance costs, faster depreciation, and the risk of damage from tenant turnover.
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How regulated is long-term renting in Indonesia right now?
Can I freely set rent prices in Indonesia right now?
In Indonesia, landlords have essentially full freedom to set initial rent prices for private residential leases, as there is no national rent control framework governing the private rental market in early 2026.
Rent increases during a tenancy are not capped by Indonesian law for private rentals, so the practical limit on increases is simply what the market will bear and what you negotiate into your lease contract terms.
What's the standard lease length in Indonesia right now?
The standard lease length for residential rentals in Indonesia is 12 months, though 24-month leases are common for family tenants and higher-end homes where landlords prefer stability.
Indonesian landlords typically request a security deposit of 1 to 2 months' rent (IDR 7 million to 26 million / USD 440 to 1,625 / EUR 400 to 1,495 for a typical 1-bedroom), plus advance rent payment, though there is no strict legal maximum for private rentals.
Security deposit return rules in Indonesia are largely governed by the lease contract itself, with standard practice being deduction for damages beyond normal wear and return of the balance within 14 to 30 days of move-out, though enforcement depends on the contract terms you negotiate upfront.
We made this infographic to show you how property prices in Indonesia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
How does short-term renting really work in Indonesia in 2026?
Is Airbnb legal in Indonesia right now?
Airbnb-style short-term rentals are legal in Indonesia but not permissionless, meaning you need proper licensing through Indonesia's OSS (Online Single Submission) system under a relevant business activity category like "Pondok Wisata."
To operate a short-term rental legally in Indonesia, you must register through the OSS platform, obtain the appropriate KBLI classification for accommodation services, and comply with local zoning and building requirements.
Indonesia does not currently have a strict nationwide cap on rental nights like some European cities, but licensing, local zoning rules, and building management policies can effectively limit short-term rental activity in specific areas.
The most common consequence for operating an unlicensed short-term rental in Indonesia is administrative penalties and potential closure orders, as the Ministry of Tourism has explicitly stated its focus is on strengthening oversight of unlicensed accommodations rather than banning platforms.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Indonesia.
What's the average short-term occupancy in Indonesia in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Indonesia is approximately 50% to 55% nationally, with Bali outperforming at around 65% (roughly 237 booked nights per year).
The realistic occupancy range for short-term rentals in Indonesia spans from 40% in less touristy locations up to 75% in prime Bali zones with strong reviews and competitive pricing.
Peak occupancy months for Indonesian short-term rentals are July, August, and December through early January, when international tourists and domestic holidaymakers drive booking rates above 80% in popular destinations like Bali.
The lowest occupancy periods in Indonesia typically fall during February, March, and October, when tourism traffic dips and operators in competitive markets like Canggu may see occupancy drop to 35% to 45%.
Finally, please note that you can find much more granular data about this topic in our property pack about Indonesia.
What's the average nightly rate in Indonesia in 2026?
As of early 2026, the average nightly rate for short-term rentals in Indonesia is approximately IDR 900,000 (USD 56 / EUR 52) nationally, with Bali commanding a higher average around IDR 1.5 million (USD 94 / EUR 86) per night.
The realistic nightly rate range for Indonesian short-term rentals spans from IDR 400,000 to IDR 3 million (USD 25 to 187 / EUR 23 to 172), depending on location, property type, and amenities.
Peak season nightly rates in Bali typically run 40% to 60% higher than off-season, meaning a property charging IDR 1.5 million in low season might command IDR 2.1 million to IDR 2.4 million (USD 130 to 150 / EUR 120 to 138) during July, August, or the December holidays.
Is short-term rental supply saturated in Indonesia in 2026?
As of early 2026, short-term rental supply in Indonesia shows significant saturation in Bali's main tourist corridors, with tens of thousands of active listings creating intense competition for occupancy and pricing power.
The current trend in Indonesian short-term rental listings is continued growth, particularly in Bali, where new supply keeps entering the market despite already-competitive conditions.
The most oversaturated neighborhoods for short-term rentals in Indonesia are central Seminyak, Canggu's main strip, and parts of Ubud center, where listing density means new entrants must compete aggressively on price or quality to achieve decent occupancy.
Neighborhoods in Indonesia that still have room for new short-term rental supply include Canggu's periphery, the Uluwatu area (especially near the cliffs), parts of Sanur, and emerging destinations like Lombok's Kuta and Senggigi, where demand-to-supply ratios remain more favorable.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Indonesia, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Government Regulation PP 18/2021 (English) | Official government-hosted translation of Indonesia's land rights framework. | We used it as the primary reference for what foreigners can legally hold. We cross-checked key concepts against the original Indonesian text. |
| Basic Agrarian Law (UU 5/1960) | The foundational law underpinning Indonesia's entire land rights system. | We used it to explain why freehold ownership is restricted for foreigners. We kept explanations consistent with Indonesia's legal structure. |
| DJP Final Income Tax Guidance | Official tax authority explanation of the 10% gross rent tax rule. | We used it to anchor all net yield calculations and cost estimates. We built the tax component of holding costs directly from this guidance. |
| Bank Indonesia Housing Survey (Q1 2025) | Central bank's official residential property price and market condition report. | We used it to ground market climate assumptions in official data. We treated it as a reality check against private-sector narratives. |
| Global Property Guide Indonesia | Long-running international property data publisher with transparent methodology. | We used it to estimate gross yields across Indonesian cities using consistent methods. We cross-checked against local reports for realism. |
| Airbtics Bali STR Data | Structured short-term rental analytics built from AirDNA provider data. | We used it for Bali occupancy, ADR, and supply saturation signals. We treated it as market telemetry alongside official regulatory sources. |
| Cushman & Wakefield Jakarta Report | Professional real estate firm's quarterly rental apartment market analysis. | We used it for Jakarta rent levels and vacancy context. We stress-tested our vacancy assumptions against their professional data. |
| OSS (Online Single Submission) Guide | Indonesia's official business licensing platform for risk-based licensing. | We used it to explain how short-term rental licensing actually works. We avoided folklore explanations about permits. |
| Ministry of Tourism Press Release | Official ministry communication about policy direction and enforcement focus. | We used it to support claims about licensing enforcement versus platform bans. We referenced it as the policy backdrop for short-term rentals. |
| Pinhome Market Report | Major Indonesian property platform with stated research methodology. | We used it to triangulate rental market direction where official data is limited. We treated it as secondary validation rather than primary source. |
We have made this infographic to give you a quick and clear snapshot of the property market in Indonesia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.