Authored by the expert who managed and guided the team behind the Indonesia Property Pack
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Thinking about buying a property in Medan and renting it out as a foreigner can feel overwhelming at first.
This guide breaks down everything you need to know about rental yields, tenant demand, legal requirements, and neighborhood performance in Medan for 2026.
We constantly update this blog post to reflect the latest market conditions and regulations.
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 Medan.
Insights
- Medan gross rental yields range between 6% and 8.5% in early 2026, which is higher than many Indonesian cities because purchase prices have not run ahead of local rents.
- Foreigners in Medan cannot hold freehold land (Hak Milik) and must use Hak Pakai or strata title structures under Indonesia's GR 18/2021 framework.
- A furnished apartment in Medan typically rents 20% to 35% faster than an unfurnished one because tenants expect move-in-ready units with AC and basic appliances.
- Short-term rental occupancy in Medan averages only 25% to 40% annually because the city attracts business travelers rather than international tourists.
- Medan Petisah, Kesawan, and Medan Baru consistently show the strongest long-term rental demand due to their proximity to the CBD, malls, and offices.
- Student rental demand clusters around Padang Bulan near USU and Medan Tembung near Unimed, creating reliable tenant pools for smaller units.
- Rental income in Medan is taxed under Indonesia's final tax regime on gross rent (PP 34/2017), meaning you cannot deduct expenses before calculating tax.
- Vacancy rates in Medan hover around 6% to 10% for well-priced long-term rentals, translating to roughly one month empty per year.
- Unlike Bali, Medan has no hard annual night limits for short-term rentals, but operating like a hotel can trigger local tourism licensing and hotel tax obligations.
Can I legally rent out a property in Medan as a foreigner right now?
Can a foreigner own-and-rent a residential property in Medan in 2026?
As of early 2026, foreigners can legally own and rent out residential property in Medan, but only through specific ownership structures because Indonesia does not allow foreigners to hold freehold land.
The main options available to foreigners are the Right to Use (Hak Pakai) for landed property and strata title ownership for apartments under Indonesia's Government Regulation 18/2021.
The single biggest restriction is that foreigners cannot own land outright under Hak Milik, which means you must work within the Hak Pakai or strata frameworks and avoid risky informal nominee arrangements.
If you're not a local, you might want to read our guide to foreign property ownership in Medan.
Do I need residency to rent out in Medan right now?
You do not need to be a resident of Indonesia to legally rent out a property in Medan, which means you can own and collect rent while living abroad.
However, collecting rental income in Medan practically requires a local tax setup because Indonesia taxes rental income under a final tax regime, and corporate tenants often request tax documentation.
While no law explicitly mandates a local bank account, most landlords in Medan maintain one because tenants typically pay in Indonesian Rupiah and international transfers create friction and extra costs.
Managing a Medan rental remotely is feasible if you use a property agent, building management, or a trusted local contact to handle tenant issues, repairs, and key handovers.
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What rental strategy makes the most money in Medan in 2026?
Is long-term renting more profitable than short-term in Medan in 2026?
As of early 2026, long-term renting is generally more profitable and reliable in Medan because the city attracts business travelers and domestic visitors rather than high-spending international tourists.
A well-managed long-term rental in Medan can generate around IDR 48 million to IDR 78 million per year (roughly $3,000 to $4,900 or €2,750 to €4,450), while short-term rentals often struggle to exceed that due to lower occupancy.
Short-term renting can outperform long-term only in prime CBD locations near malls and with professional management, fast guest communication, and consistently high reviews.
What's the average gross rental yield in Medan in 2026?
As of early 2026, the average gross rental yield for residential property in Medan sits between 6% and 8.5% per year, which is competitive compared to many Indonesian cities.
The realistic range spans from about 5.5% for higher-end landed houses to around 9% for well-located, furnished apartments in newer buildings.
Furnished apartments in CBD-adjacent areas like Medan Petisah and Medan Baru typically achieve the highest gross yields because purchase prices remain moderate while rental demand stays strong.
By the way, we have much more granular data about rental yields in our property pack about Medan.
What's the realistic net rental yield after costs in Medan in 2026?
As of early 2026, the realistic net rental yield in Medan after all costs typically falls between 3.8% and 6.2% per year for most residential properties.
Most landlords in Medan experience net yields in the 4% to 5.5% range once they account for all recurring expenses and realistic vacancy assumptions.
The three main cost categories that reduce gross yield in Medan are building service charges (IPL) for apartments which can reach IDR 2 million monthly, the final tax on gross rental income which cannot be reduced by expenses, and vacancy gaps during tenant turnover which average about one month per year.
You might want to check our latest analysis about gross and net rental yields in Medan.
What monthly rent can I get in Medan in 2026?
As of early 2026, typical monthly rents in Medan range from around IDR 2.5 million ($155/€140) for a studio to IDR 5 million to 9 million ($310 to $560/€285 to €515) for a 2-bedroom apartment.
A decent entry-level studio in Medan rents for about IDR 2.5 million to 4.5 million per month, which translates to roughly $155 to $280 or €140 to €255.
A typical 1-bedroom apartment in Medan commands IDR 3.5 million to 6.5 million monthly, equivalent to approximately $220 to $405 or €200 to €370.
A standard 2-bedroom apartment in good condition rents for IDR 5 million to 9 million per month in Medan, which works out to about $310 to $560 or €285 to €515.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Medan.
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 Medan in 2026?
What's the total "all-in" monthly cost to hold a rental in Medan in 2026?
As of early 2026, the total monthly cost to hold a rental property in Medan typically ranges from IDR 1.5 million to 4.5 million ($95 to $280/€85 to €255) for apartments and IDR 1 million to 4 million ($65 to $250/€55 to €230) for houses.
The realistic range covers building fees, utilities you might cover, maintenance reserves, and any management fees, with most landlords landing somewhere in the middle of these bands.
For Medan apartments specifically, the building service charge (IPL) is usually the largest single cost, running IDR 500,000 to 2 million monthly depending on the building's amenities and maintenance quality.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Medan.
What's the typical vacancy rate in Medan in 2026?
As of early 2026, the typical vacancy rate for long-term rentals in Medan runs around 6% to 10% for normally priced, well-presented properties.
Landlords in Medan should budget for roughly 0.7 to 1.2 months of vacancy per year because tenant turnover, lease negotiations, and minor repairs between tenants all take time.
The main factor driving vacancy differences across Medan neighborhoods is proximity to employment centers, universities, and malls, with areas like Medan Petisah filling faster than peripheral locations.
Tenant turnover in Medan tends to peak around mid-year when university students relocate and corporate employees receive transfers, so landlords should prepare for potential gaps during this period.
We have a whole part covering the best rental strategies in our pack about buying a property in Medan.
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Where do rentals perform best in Medan in 2026?
Which neighborhoods have the highest long-term demand in Medan in 2026?
As of early 2026, the three neighborhoods with the highest overall long-term rental demand in Medan are Kesawan (city center), Medan Petisah, and Medan Baru because they offer the best access to offices, malls, and public transport.
Families looking for long-term rentals in Medan tend to cluster in Medan Johor, Medan Tuntungan, and Medan Sunggal because these areas offer more space, schools, and a calmer residential feel.
Students drive strong rental demand around Padang Bulan and Medan Baru (near Universitas Sumatera Utara) and around Medan Tembung and Medan Estate (near Universitas Negeri Medan).
Expats and international professionals in Medan, though a smaller segment than in Jakarta or Bali, concentrate in Medan Polonia and Medan Petisah where newer condos and proximity to amenities meet their needs.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Medan.
Which neighborhoods have the best yield in Medan in 2026?
As of early 2026, the neighborhoods with the best rental yields in Medan are Medan Selayang, the fringe of Medan Baru near universities, and select pockets of Medan Johor where purchase prices have not outpaced rents.
These top-yielding neighborhoods in Medan typically deliver gross rental yields in the 7% to 9% range because entry prices remain accessible while tenant demand stays consistently strong.
The main characteristic that allows these areas to achieve higher yields is that they attract steady, price-sensitive tenants (students and young professionals) without commanding the premium purchase prices of CBD towers.
We cover a lot of neighborhoods and provide a lot of updated data in our property pack about real estate in Medan.
Where do tenants pay the highest rents in Medan in 2026?
As of early 2026, the three neighborhoods where tenants pay the highest rents in Medan are Medan Polonia, Medan Petisah, and central Kesawan-adjacent areas with newer integrated developments.
A standard apartment in these premium Medan neighborhoods typically rents for IDR 6 million to 12 million per month, which translates to roughly $375 to $750 or €340 to €685.
What makes these neighborhoods command the highest rents in Medan is their combination of newer building stock with reliable water and power, direct mall access, and proximity to corporate offices and the airport corridor.
The typical tenant profile in these high-rent Medan neighborhoods includes corporate employees on housing allowances, regional managers, embassy staff, medical professionals, and business owners who prioritize convenience over price.
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 Medan in 2026?
What features increase rent the most in Medan in 2026?
As of early 2026, the three property features that increase monthly rent the most in Medan are reliable air conditioning with good airflow, consistent water pressure with hot water, and secure parking with 24-hour security because these address daily comfort challenges in a tropical city with variable infrastructure.
Reliable AC and good airflow in Medan can add a rent premium of 15% to 25% because the heat and humidity make this a non-negotiable comfort factor for most tenants.
One commonly overrated feature in Medan is a swimming pool, which landlords invest in but tenants rarely pay extra for unless the pool is well-maintained and the building management is reputable.
An affordable upgrade that provides strong returns in Medan is installing a quality water heater and ensuring stable Wi-Fi connectivity, as these cost relatively little but significantly reduce tenant complaints and turnover.
Do furnished rentals rent faster in Medan in 2026?
As of early 2026, furnished apartments in Medan typically rent 2 to 4 weeks faster than unfurnished ones because the local tenant pool, especially for condos, expects move-in-ready units with bed, AC, fridge, and basic kitchen setup.
Furnished apartments in Medan generally command a rent premium of 15% to 30% over unfurnished equivalents, which often more than covers the furniture investment over a few lease cycles.
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How regulated is long-term renting in Medan right now?
Can I freely set rent prices in Medan right now?
Landlords in Medan have essentially full freedom to set initial rent prices because Indonesia does not operate a city-level rent control system, meaning rents are negotiated and written into the lease contract.
Rent increases during a tenancy in Medan are also not capped by regulation, so landlords and tenants typically agree on renewal terms at market rates, though most landlords offer modest increases to retain good tenants.
What's the standard lease length in Medan right now?
The standard lease length for residential rentals in Medan is 12 months, though some landlords offer 6-month terms at a slight premium or multi-year leases with discounts.
Landlords in Medan typically ask for a security deposit of 1 to 2 months' rent, which translates to roughly IDR 3.5 million to 13 million ($220 to $810/€200 to €740) depending on the property.
Security deposit return rules in Medan are governed by the lease contract rather than specific regulation, so landlords should clearly document deposit conditions, deductions for damage, and return timelines in writing to avoid disputes.
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 Medan in 2026?
Is Airbnb legal in Medan right now?
Airbnb-style short-term rentals are operationally active in Medan and not explicitly banned, but hosts may trigger local tourism and accommodation regulations if their activity resembles a hotel or guesthouse.
If you operate frequent short stays in Medan, you should assume that some form of business registration and local tax compliance may be expected under Medan's tourism framework (Perda 4/2014) and hotel tax rules (Perda 4/2011).
Medan does not currently impose hard annual night limits on short-term rentals like some Western cities, so the main compliance concern is licensing and local tax classification rather than booking caps.
The most common consequence for non-compliant short-term rental operation in Medan is exposure to local hotel tax obligations and potential building management restrictions, especially in larger condo developments with internal rules.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Medan.
What's the average short-term occupancy in Medan in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Medan hovers around 25% to 40%, which is lower than tourist-heavy destinations like Bali.
The realistic occupancy range in Medan spans from under 20% for poorly managed listings to 40% to 55% for well-reviewed, professionally run units in prime locations.
The highest occupancy months for Medan short-term rentals typically fall during major holidays (Eid, Christmas, Chinese New Year) and corporate event seasons when domestic business travel peaks.
The lowest occupancy periods in Medan usually occur during the quieter months between major holidays when business travel slows and there is no significant tourist season to fill the gap.
Finally, please note that you can find much more granular data about this topic in our property pack about Medan.
What's the average nightly rate in Medan in 2026?
As of early 2026, the average nightly rate for short-term rentals in Medan falls between IDR 400,000 and 600,000 ($25 to $37/€23 to €34), with most bookings clustering in the middle of this range.
The realistic range spans from about IDR 300,000 ($19/€17) for basic units to IDR 800,000 ($50/€46) for premium 2-bedroom condos in newer towers with full amenities.
Peak season nightly rates in Medan can run 30% to 50% higher than off-season rates, adding roughly IDR 100,000 to 200,000 ($6 to $12/€6 to €11) per night during major holidays and events.
Is short-term rental supply saturated in Medan in 2026?
As of early 2026, the short-term rental market in Medan is not saturated and remains a relatively small pond compared to Bali or Jakarta, meaning there is still room for quality listings to gain traction.
The number of active short-term rental listings in Medan appears stable to slowly growing as more apartment owners experiment with platforms, but supply has not reached overwhelming levels.
The most crowded areas for short-term rentals in Medan are the central neighborhoods like Kesawan and Medan Petisah where tourist-friendly infrastructure and mall access attract most hosts.
Neighborhoods that still have room for new short-term rental supply in Medan include emerging areas near universities and outer-CBD pockets where listing competition remains limited but demand anchors exist.
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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 Medan, 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 |
|---|---|---|
| Bank Indonesia Property Survey | Indonesia's central bank publishing official housing price data. | We used it to anchor Indonesia-wide housing price context. We treated it as our macro reality check for Medan numbers. |
| BPS Property Price Index | Indonesia's national statistics office with official property indices. | We used it to cross-check market direction against Bank Indonesia. We treated it as a second independent public benchmark. |
| Government Regulation 18/2021 | Official government legal database for Indonesian regulations. | We used it as the primary legal basis on foreign ownership rights. We relied on this over informal expat blog summaries. |
| Government Regulation 34/2017 | Formal government regulation on rental income taxation. | We used it to confirm tax treatment on rental income. We treated it as the hard law behind tax guidance. |
| DJP Tax Guidance | Indonesia's tax authority with official guidance pages. | We used it to confirm rental income falls under final tax. We kept the tax section accurate and practical with this source. |
| Rumah123 | One of Indonesia's largest property portals with deep listings. | We used it to sample asking rents for Medan apartments. We treated it as market asking rent, then discounted to estimate achieved rent. |
| Dot Property | Large regional portal showing unit sizes and rent levels clearly. | We used it to cross-check rent bands and spot outliers. We also used it for reality checks on amenities and holding costs. |
| Rukita | Major Indonesian rental platform for managed rentals. | We used it as a floor-price signal for entry-level rents. We cross-checked it against owner-listed units on other portals. |
| Airbnb Medan | The platform itself showing live supply and demand signals. | We used it to confirm Medan has active STR supply. We treated it as a live sanity check, not a complete dataset. |
| Medan Hotel Tax Perda 4/2011 | Local law published via government legal repository. | We used it to frame local tax risk for short-term rentals. We explained why STR can trigger hotel-type obligations. |
| Medan Tourism Perda 4/2014 | City-level tourism framework from official Medan government site. | We used it to explain how tourism accommodation is governed locally. We provided context for potential licensing requirements. |
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.
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