Real estate investing can be a lucrative way to make passive income. Foreign real estate investing comes with unique challenges, but also unique perks. If you’re new to the real estate game, you want to glean as much info as you can before you take the plunge. Luckily, we have the best guide to investing in Indonesia! Here are some of our top tips to maximize your success in the market.
I’ve kept this simple. Each of these headings could have a book written about them – but I want to highlight what you need to start thinking about as a priority.
1. Diversify Location of Investment
Even if you think you’ve found the best place to invest in real estate, it’s always a good idea to diversify your investments. This is not only true of the vehicles you’re using to invest but also the location of your real estate investments. Investing too heavily in a specific area increases the risk of your investment. If the one location of all your investments suffers from political turmoil or a natural disaster, your entire portfolio could suffer. So, as you acquire more properties, think about expanding the geography of your portfolio!
2. Ease Yourself into the Process
You should never make an investment in a place you’ve never visited. Culture shock is real, even for investors. It’s a good idea to visit the location you’re thinking of investing in first to see the sights and meet the locals before you sign on the dotted line. This will help you feel more comfortable about the investment and reduce culture shock.
3. Make One Investment at a Time
If you have the money to buy multiple properties right now, you may be tempted to purchase several properties at once. However, if it’s your first time investing in real estate in Indonesia, you’ll want to get a feel for the process first. Juggling multiple real estate transactions at the same time is stressful, and it increases the likelihood of making costly mistakes. Once you have one investment producing returns, you can move on to another in Indonesia or in another country. Don’t let the Fear of Mission Out get the better of rigorous due diligence. Each property will give you valuable experience that will help you learn and grow as an investor.
4. Get the Help of Local Experts
Even if you’re an experienced real estate investor in one location, you need to consider just how much real estate varies based on the location of the market. Just going from one county to another can already mean dramatic differences in real estate. When you are dealing with completely separate countries, you can expect the changes to be even more significant.
Because of this, when you’re investing in foreign real estate, you should always work with local experts who can educate you on the market and culture. While this could make things a little more expensive upfront, in the long-run it will maximize your return on investment and make your life easier. Trust me. This has cost me a lot of money in the past. Spend the money up front to get proper advice.
5. Ensure You’re Compliant
While getting insight from locals who are familiar with the market you’re investing in is important, you also want to ensure you’re consulting with a tax professional from your home country. They will ensure that you are following the rules around Foreign Investing and the tax implications and avoid serious tax consequences.
Looking for More Resources?
Having a variety of resources at your disposal when you’re on your investment journey will benefit you greatly! If you need a guide to starting a business in Indonesia and are looking for the best Indonesian hospitality podcast, make sure you give our podcast a listen! The Indonesia Hospitality Podcast has the answers to your most burning questions. Subscribe today!