Investment Property in Surabaya

Investment Real Estate in Surabaya

Investment Property in Surabaya
Investment Property in Surabaya

Surabaya 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 Surabaya.

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Search Map of Surabaya Investment Real Estate

Surabaya (Indonesian pronunciation: [suraˈbaja] (About this soundlisten); older spelling: Soerabaja) is the capital of the Indonesian province of East Java and the third-largest city in Indonesia. Located on northeastern border of Java island, on the Madura Strait, it is one of the earliest port cities in Southeast Asia. According to the National Development Planning Agency, Surabaya is one of the four main central cities of Indonesia, alongside Jakarta, Medan, and Makassar. The city has a population of 2.89 million within its city limits in 2019 and 9.5 million in the extended Surabaya metropolitan area, making it the third-largest metropolitan area in Indonesia.

The city was settled in 10th century by the Kingdom of Janggala, one of the two Javanese kingdoms that was formed in 1045 when Airlangga abdicated his throne in favor of his two sons. In the late 15th and 16th centuries, Surabaya grew to be a duchy, a major political and military power as well as a port in eastern Java, probably under Majapahit empire. At that time, Surabaya was already a major trading port, owing to its location on the River Brantas delta and the trade route between Malacca and the Spice Islands via the Java Sea. During the decline of Majapahit, the lord of Surabaya resisted the rise of the Demak Sultanate and only submitted to its rule in 1530. Surabaya became independent after the death of Sultan Trenggana of Demak in 1546.

From the 18th century until the mid-20th century, Surabaya was the largest city in the Dutch East Indies, and the center of trading in the Indonesian archipelago, which was then a competitor to Shanghai and Hong Kong. The city is known as Kota Pahlawan (the city of heroes) due to the importance of the Battle of Surabaya during the Indonesian National Revolution. The city is one of the important financial, commercial, industrial, transportation, and entertainment hub of the archipelago, arguably second only to Jakarta, and the Port of Tanjung Perak is Indonesia’s second-busiest seaport located on northern Surabaya. The city is also known for being one of the cleanest and greenest in Indonesia.

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The financial stability of Surabaya 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 Surabaya

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

Whatever your goals with investment property in Surabayaare – preparation is key.

  • Set goals based on how much rental yield will be required and the local rental yield rates in Surabaya and be prepared to change your initial outlook.
  • Thoroughly research the Surabaya location with a special emphasis on fringe areas outside the main Surabaya metropolis that may be valued lower than their better-known neighbours. Rental yields of around 5% are still attainable in certain areas of Surabaya.
  • Ensure that your target investment property in Surabaya 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 such as Physis Realty with local knowledge and experience of property legislation will give you the best chance of success.
  • You may think that managing your Surabaya properties yourself is an easy option, but are these savings justifiable when you run into Surabaya red tape? Physis Realty Surabaya office in downtown provides you with peace-of-mind and leaves you time to plan your next move in the growing Surabaya buy-to-rent sector.

With our expert guidance, investing in Surabaya provides the secure knowledge that your money is working harder than it would in a local Surabaya bank and that future generations of your family will be left with substantial capital growth assets.

We are always happy to advise on buying investment property in Surabaya, where we have been established for over 35+ years. Physis Realty has been a firm fixture in the Surabaya property market through good times and bad. Our experts have seen it all and our portfolios continue to outperform.

Flipping Investment Property in Surabaya

Flipping property in Surabaya

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

The Flipping Strategy in Surabaya

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

What is distressed Surabaya property:

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

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

Calculate profit that you make from Surabaya investment property flipping:

Final Selling Price less Cost of Purchase less Costs = Profit

Here is an example:

Surabaya 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 Surabaya use a minimum profit value of 22% when looking at potential Surabaya projects. The reason for this is because there are lots that can go wrong in Surabaya property flipping and working on a potential margin of 22% should still leave a good margin of error.

Luxury Property in Surabaya

For luxury property investors hoping to add a superb property in {AsainCity} to their luxury real estate investment portfolio, Physis Realty is a trusted partner.

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A world leader in luxury real estate with a portfolio comprising some of the most sought-after real estate in Surabaya, Physis Realty caters particularly to high net-worth individuals and families in Asia. A luxury real estate investment in Surabaya should be entrusted to only the highest-quality agency.

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