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
As a foreigner looking to buy property in Surabaya for rental income, you are entering Indonesia's second-largest city, where steady demand from students, young professionals, and corporate tenants creates a fundamentally different rental market than tourist-driven Bali.
Surabaya's rental yields consistently outperform Jakarta, often reaching 6% to 7% gross, because property prices remain more affordable while rents stay supported by the city's large university population and industrial base.
We constantly update this blog post to reflect the latest regulations, market data, and practical insights for foreign landlords in Surabaya.
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 Surabaya.
Insights
- Surabaya's gross rental yields average around 6.6% in early 2026, which is significantly higher than Jakarta's 4% average, making it one of Indonesia's best cities for rental income.
- The 10% final income tax on rental income in Surabaya is withheld at the source, meaning your net yield typically drops by at least 2 percentage points from gross before other costs.
- Student demand near ITS and Airlangga University campuses in East Surabaya creates vacancy rates as low as 5% for well-located studios, compared to 12% or more in oversupplied apartment towers.
- Surabaya hotel occupancy hovered around 49.6% in mid-2025, suggesting that short-term rental occupancy likely runs between 30% and 40%, making long-term renting the safer bet for most foreign landlords.
- West Surabaya neighborhoods like Dukuh Pakis and Wiyung command the highest rents at IDR 6 million to 9 million per month for a 2-bedroom, but yield percentages are often lower because purchase prices are also premium.
- Furnished apartments in Surabaya rent 15% to 25% faster than unfurnished units, and students and young professionals strongly prefer move-in-ready options with basic appliances and fast internet.
- Foreigners must hold property through Hak Pakai or strata title structures, not freehold, and minimum price thresholds set by ministerial decree apply to Surabaya purchases by non-Indonesians.
- A remote foreign landlord in Surabaya typically needs a local property manager, which costs 8% to 12% of monthly rent, plus an Indonesian tax number (NPWP) or a compliant withholding arrangement.
Can I legally rent out a property in Surabaya as a foreigner right now?
Can a foreigner own-and-rent a residential property in Surabaya in 2026?
As of early 2026, foreigners can legally own residential property in Surabaya and rent it out, but only through permitted ownership structures like Hak Pakai (Right to Use) or strata title for apartments, not through outright freehold (Hak Milik) which is reserved for Indonesian citizens.
The most common legal arrangement for foreigners is Hak Pakai, which grants the right to use land for up to 30 years with extensions possible up to 80 years total, and this title can be applied to both landed houses and apartment units in Surabaya.
The single biggest restriction is that you must meet Indonesia's minimum property price thresholds set by Ministerial Decree ATR/BPN No. 1241/2022, which means you cannot simply buy the cheapest studio in Surabaya and expect full legal compliance as a foreign owner.
If you're not a local, you might want to read our guide to foreign property ownership in Surabaya.
Do I need residency to rent out in Surabaya right now?
You do not need to physically live in Surabaya to rent out your property, but you will almost certainly need a local property manager or agent to handle tenant sourcing, maintenance, rent collection, and compliance matters on your behalf.
If you earn rental income in Indonesia, you should plan to register for an Indonesian tax identification number (NPWP), because rental income is subject to a 10% final withholding tax and the tax authority expects proper documentation.
While there is no strict legal requirement for a local bank account, having one makes rent collection far easier since most Surabaya tenants pay via local bank transfer, and your property manager will likely prefer a local account for smoother operations.
Managing a rental property in Surabaya entirely remotely is feasible if you have a reliable local property manager who can handle tenant turnover, repairs, and tax filings, though you should expect to pay 8% to 12% of monthly rent for this service.
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What rental strategy makes the most money in Surabaya in 2026?
Is long-term renting more profitable than short-term in Surabaya in 2026?
As of early 2026, long-term renting is generally the more profitable and lower-risk strategy for most foreign landlords in Surabaya, because the city's rental demand is driven by students, office workers, and families rather than leisure tourists.
A well-managed long-term rental in Surabaya might generate IDR 48 million to 72 million per year (roughly USD 3,000 to 4,500 or EUR 2,800 to 4,200) for a typical 1-bedroom apartment, while a short-term rental would need consistent 50%+ occupancy at premium rates to match that, which is difficult in a business-travel city.
Short-term renting tends to outperform long-term only in specific locations like serviced apartments near Tunjungan Plaza or units marketed to corporate travelers, where operators can achieve higher nightly rates and benefit from event-driven demand peaks.
What's the average gross rental yield in Surabaya in 2026?
As of early 2026, the average gross rental yield for residential properties in Surabaya sits around 5.5% to 7.5%, with apartments near university areas and central business districts often hitting the higher end of that range.
The realistic low-to-high gross yield range for Surabaya spans from about 4.5% for premium properties in West Surabaya (where prices are highest) up to 8% or more for well-located studios near campuses where strong tenant demand meets relatively affordable purchase prices.
Studios and small 1-bedroom apartments typically achieve the highest gross yields in Surabaya because purchase prices stay modest while rental demand from students and young professionals remains consistently strong.
By the way, we have much more granular data about rental yields in our property pack about Surabaya.
What's the realistic net rental yield after costs in Surabaya in 2026?
As of early 2026, the average net rental yield after all costs for residential properties in Surabaya falls between 3.5% and 5.5%, depending on how efficiently you manage expenses and vacancy.
Most landlords in Surabaya realistically experience net yields in the 3.5% to 5% range after accounting for tax, maintenance, management fees, and occasional vacancy, with only the most optimized properties in high-demand zones exceeding 5%.
The three main cost categories that eat into your gross yield in Surabaya are the mandatory 10% final income tax on rental revenue, building service charges and sinking funds (especially significant in apartment towers), and property management fees if you operate remotely.
You might want to check our latest analysis about gross and net rental yields in Surabaya.
What monthly rent can I get in Surabaya in 2026?
As of early 2026, typical monthly rents in Surabaya are roughly IDR 2.5 million to 3.5 million (USD 160 to 220, EUR 145 to 205) for a studio, IDR 4 million to 5.5 million (USD 250 to 350, EUR 235 to 325) for a 1-bedroom, and IDR 5.5 million to 8 million (USD 350 to 500, EUR 325 to 470) for a 2-bedroom apartment.
For a decent entry-level studio in Surabaya, expect realistic rents between IDR 2 million and 4 million per month (USD 125 to 250, EUR 115 to 235), with the lower end found near less central locations and the higher end in furnished units close to universities or malls.
A typical mid-range 1-bedroom apartment in Surabaya rents for IDR 3 million to 6 million per month (USD 190 to 380, EUR 175 to 355), depending on whether it is furnished, the building's quality, and proximity to employment centers.
For a mid-to-high range 2-bedroom apartment in Surabaya, monthly rents typically fall between IDR 4.5 million and 9 million (USD 285 to 570, EUR 265 to 530), with premium West Surabaya locations commanding the top of that range.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Surabaya.
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 Surabaya in 2026?
What's the total "all-in" monthly cost to hold a rental in Surabaya in 2026?
As of early 2026, a realistic all-in monthly holding cost (excluding mortgage payments) for a typical rental property in Surabaya runs between IDR 750,000 and 2,500,000 (USD 50 to 160, EUR 45 to 150), representing roughly 25% to 40% of your gross monthly rent.
The realistic low-to-high monthly cost range covers apartments with modest service charges at the low end (around IDR 500,000 to 800,000) and premium towers with higher service fees, management costs, and maintenance reserves at the high end (IDR 1.5 million to 2.5 million or more).
In Surabaya, the single largest cost category for apartment landlords is typically the building service charge (Iuran Pengelolaan Lingkungan or IPL), which covers security, common area maintenance, and building management, and can run IDR 15,000 to 25,000 per square meter monthly in quality towers.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Surabaya.
What's the typical vacancy rate in Surabaya in 2026?
As of early 2026, the typical vacancy rate for rental properties in Surabaya ranges from 8% to 12% on average, though well-located units near universities or central business areas can achieve vacancy rates as low as 5%.
A landlord in Surabaya should realistically budget for 1 to 1.5 months of vacancy per year, which accounts for turnover time between tenants and the occasional longer gap if your unit is priced above market or poorly marketed.
The main factor driving vacancy differences across Surabaya neighborhoods is proximity to demand anchors like universities (ITS, Airlangga), major office clusters, and family-oriented amenities, with oversupplied apartment towers in peripheral areas facing higher vacancy risk.
Tenant turnover in Surabaya peaks around July and August when university students graduate and relocate, and again in December to January when annual lease cycles end, so landlords should prepare for potentially longer vacancy during these periods.
We have a whole part covering the best rental strategies in our pack about buying a property in Surabaya.
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Where do rentals perform best in Surabaya in 2026?
Which neighborhoods have the highest long-term demand in Surabaya in 2026?
As of early 2026, the top three neighborhoods with the highest overall long-term rental demand in Surabaya are Gubeng (central access to offices and transportation), Sukolilo (near ITS campus and tech parks), and Dukuh Pakis in West Surabaya (modern developments, malls, and international schools).
For families seeking rentals in Surabaya, the strongest demand clusters in West Surabaya neighborhoods like Dukuh Pakis, Wiyung, and Sambikerep, where newer housing stock, reputable schools, and family-friendly mall complexes create a premium rental environment.
Students in Surabaya concentrate their rental demand around Sukolilo and Keputih (walking distance to ITS), Mulyorejo (education corridor), and parts of Gubeng with easy access to Airlangga University, making these areas excellent for studio and small apartment investments.
Expats and international professionals in Surabaya typically prefer the West Surabaya corridor around Pakuwon and Citraland developments, the Darmo area for its established prestige, and central Gubeng or Genteng for convenient office access.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Surabaya.
Which neighborhoods have the best yield in Surabaya in 2026?
As of early 2026, the top three neighborhoods for rental yield in Surabaya are Sukolilo (strong student demand, moderate prices), Rungkut (workforce housing near industrial areas), and Tenggilis Mejoyo (affordable entry prices with solid occupancy from young professionals).
The estimated gross rental yield range in these top-yielding Surabaya neighborhoods typically falls between 6.5% and 8.5%, compared to 5% to 6% in premium but expensive West Surabaya locations where high purchase prices compress yield percentages.
What allows these neighborhoods to achieve higher yields is the combination of strong, reliable tenant demand (students, factory workers, early-career professionals) with purchase prices that remain 30% to 50% lower than West Surabaya's premium developments.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Surabaya.
Where do tenants pay the highest rents in Surabaya in 2026?
As of early 2026, the top three neighborhoods where tenants pay the highest rents in Surabaya are Dukuh Pakis (West Surabaya's premium hub), Gubeng (central business district accessibility), and Darmo (established upscale residential area), where monthly rents can reach IDR 8 million to 15 million (USD 500 to 950, EUR 470 to 880) for quality 2-bedroom apartments.
In these premium Surabaya neighborhoods, a standard 2-bedroom apartment typically rents for IDR 7 million to 12 million per month (USD 440 to 760, EUR 410 to 705), while luxury units in top towers can exceed IDR 15 million (USD 950, EUR 880).
What makes these neighborhoods command the highest rents is their combination of modern building stock, proximity to international schools and premium malls, strong security infrastructure, and easy access to Surabaya's main business and commercial corridors.
The typical tenant profile in these highest-rent Surabaya neighborhoods includes expatriate managers working for multinational companies, senior Indonesian executives, and affluent families who prioritize convenience, security, and quality school access over price sensitivity.
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 Surabaya in 2026?
What features increase rent the most in Surabaya in 2026?
As of early 2026, the three property features that increase monthly rent the most in Surabaya are reliable air conditioning with good ventilation (essential in Surabaya's tropical heat), guaranteed parking for at least one car or motorbike, and fast, stable internet connectivity that supports remote work.
Guaranteed parking is arguably the single most valuable feature in Surabaya's rental market, adding an estimated 10% to 20% rent premium because car and motorbike ownership is nearly universal and tenants will not compromise on parking access.
One commonly overrated feature that landlords invest in but tenants rarely pay extra for in Surabaya is high-end decorative finishes or luxury fixtures, because most Surabaya tenants prioritize practical functionality and location over Instagram-worthy interiors.
One affordable upgrade that provides a strong return on investment for Surabaya landlords is installing a quality water heater and ensuring the bathroom has good ventilation, because these low-cost additions significantly improve tenant comfort and perceived unit quality.
Do furnished rentals rent faster in Surabaya in 2026?
As of early 2026, furnished apartments in Surabaya typically rent 2 to 4 weeks faster than unfurnished equivalents, because students, young professionals, and relocating workers strongly prefer move-in-ready units that eliminate the hassle of buying furniture.
Furnished apartments in Surabaya command a rent premium of roughly 15% to 25% over unfurnished units, though the premium is higher for studios and 1-bedrooms targeting students and singles than for larger family-oriented units where tenants often have their own furniture.
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How regulated is long-term renting in Surabaya right now?
Can I freely set rent prices in Surabaya right now?
Landlords in Surabaya have substantial freedom to set initial rent prices at market rates, as Indonesia does not impose rent control or government-mandated pricing for private residential rentals.
Rent increases during a tenancy in Surabaya are generally not capped by regulation, but they are governed by whatever terms you negotiate in the lease contract, which typically specifies when and how rents can be adjusted upon renewal.
What's the standard lease length in Surabaya right now?
The standard lease length for residential rentals in Surabaya is 12 months, though 6-month leases exist for furnished apartments targeting students and shorter-term professionals, and some landlords offer 2-year terms with discounted annual rates.
Landlords in Surabaya typically require a security deposit of 1 to 2 months' rent (roughly IDR 3 million to 12 million, USD 190 to 760, EUR 175 to 705 depending on unit type), with 2 months being common for furnished units to cover potential damage to furniture and appliances.
Deposit return rules in Surabaya follow general Indonesian contract law, meaning the landlord should return the deposit within the timeframe specified in the lease (typically 14 to 30 days after move-out) minus any documented deductions for damage beyond normal wear and tear.
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 Surabaya in 2026?
Is Airbnb legal in Surabaya right now?
Airbnb-style short-term rentals in Surabaya are not outright banned, but they are treated as accommodation businesses under Indonesian law, meaning you need proper licensing and must comply with local tax and registration requirements to operate legally.
To operate a short-term rental in Surabaya legally, you typically need a Business Identification Number (NIB) through Indonesia's OSS system and potentially a tourism accommodation license (TDUP), with the exact requirements depending on the scale and nature of your operation.
Indonesia does not currently impose a nationwide annual night limit for short-term rentals in Surabaya, but some apartment buildings have their own rules prohibiting daily rentals, and operating without proper registration exposes you to enforcement risk.
The most common consequence for operating an unlicensed short-term rental in Surabaya is receiving a warning or fine from local authorities, potential back-tax assessments, and in severe cases, being forced to cease operations or facing building management penalties.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Surabaya.
What's the average short-term occupancy in Surabaya in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Surabaya is estimated at 30% to 40%, reflecting the city's business-travel orientation rather than year-round leisure tourism.
The realistic occupancy range for Surabaya short-term rentals spans from about 25% for poorly marketed units in oversupplied buildings up to 50% or more for professionally managed properties targeting corporate travelers in prime central locations.
The highest short-term occupancy in Surabaya typically occurs during major business events, trade fairs, university graduation periods, and national holidays, roughly spanning March to May and September to November.
The lowest occupancy months for Surabaya short-term rentals are usually January (post-holiday slowdown), early February, and the Ramadan period when business travel and leisure bookings both decline significantly.
Finally, please note that you can find much more granular data about this topic in our property pack about Surabaya.
What's the average nightly rate in Surabaya in 2026?
As of early 2026, the average nightly rate for short-term rentals in Surabaya is approximately IDR 600,000 to 750,000 (USD 38 to 47, EUR 35 to 44), with rates varying widely based on location, furnishing quality, and building amenities.
The realistic low-to-high nightly rate range for Surabaya short-term rentals spans from about IDR 350,000 (USD 22, EUR 20) for basic studios in secondary locations up to IDR 1,200,000 or more (USD 76, EUR 70) for premium furnished 2-bedrooms in West Surabaya or central business areas.
During peak seasons like major trade events or national holidays, nightly rates in Surabaya can increase by IDR 150,000 to 300,000 (USD 10 to 19, EUR 9 to 18) above off-peak rates, representing a 25% to 40% premium for high-demand periods.
Is short-term rental supply saturated in Surabaya in 2026?
As of early 2026, Surabaya's short-term rental market is moderately competitive but not severely saturated like Bali, though specific apartment towers and central locations show signs of oversupply with many similar units competing for the same guests.
The current trend in Surabaya shows gradual growth in active short-term listings as more apartment owners try to capture nightly rates, but demand growth has not kept pace, leading to increased price competition in popular buildings.
The most oversaturated short-term rental areas in Surabaya are clustered around major apartment towers in Gubeng, HR Muhammad corridor, and some West Surabaya developments where dozens of similar units compete on platforms like Airbnb and Travelio.
Neighborhoods with room for new short-term rental supply in Surabaya include emerging areas near the airport (Juanda corridor), less-developed parts of East Surabaya near industrial parks, and locations near convention centers where corporate demand is underserved.
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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 Surabaya, 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 |
|---|---|---|
| PP No. 18/2021 (Land rights regulation) | Official Indonesian government regulation on land and property rights. | We used it to confirm the current legal framework for foreign ownership. We referenced it to explain Hak Pakai and strata title structures. |
| PP No. 103/2015 (Foreign ownership of residential property) | Primary regulation specifying conditions for foreign property ownership. | We used it to ground what foreigners can legally own and under what conditions. We also referenced the domicile and stay permit requirements. |
| Directorate General of Taxes (DJP) PPh 4(2) guidance | Indonesia's official tax authority explaining rental income withholding. | We used it to quantify the 10% final tax on rental income. We referenced it to calculate realistic net yields for Surabaya landlords. |
| Bank Indonesia SHPR Q3 2025 | Central bank's official residential property price survey. | We used it to set the macro context for property prices and lending. We referenced it to support our yield calculations with price growth assumptions. |
| BPS Surabaya City Statistics 2025 | Official city statistics yearbook with demographic and economic data. | We used it to ground Surabaya's tenant demand drivers. We referenced population and employment data to validate neighborhood demand claims. |
| BPS Surabaya Hotel Occupancy Data | Official local data on short-stay accommodation demand. | We used it as a proxy for short-term rental occupancy. We benchmarked STR performance against hotel occupancy rates. |
| Rumah123 Surabaya Listings | One of Indonesia's largest property portals with extensive listings. | We used it to estimate current rent bands by unit size and neighborhood. We cross-checked asking rents against other portals for accuracy. |
| Lamudi Surabaya Listings | Major property marketplace for validating rent consistency. | We used it as a second portal to cross-check rent levels. We verified typical furnishing patterns and premium pricing. |
| OSS Indonesia (KBLI 55193) | Government's official licensing system for business categories. | We used it to show how short-term rentals map to accommodation business categories. We referenced it for licensing requirement explanations. |
| Surabaya Perda No. 7/2023 (Local taxes) | City-level regulation on local taxes and levies. | We used it to explain Surabaya's local tax framework for accommodation activities. We referenced it for short-term rental compliance context. |
| Global Property Guide Indonesia | Respected international property research source with yield data. | We used it to validate our gross yield estimates for Indonesian cities. We cross-referenced their methodology against our own calculations. |
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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