What types of investment properties are there on the market? There are 8 types of property investment products on the market. Let us discuss one by one the types of investment.
Property Investment Has a Wide Scope
There are many types of properties that can be used as investment instruments. Each type of property has different characteristics ranging from shape, target tenants, complexity of maintenance and other factors.
In terms of investment, there are three things that need to be focused in choosing property investment. The three factors are the potential yield (annual profit), the ease of buying, renting and selling property and the cost and complexity of property maintenance.
Vacant Land Investment
Investments in vacant land and plots of land are the most basic property investments. This investment is often used by people since ancient times to pass on property to their offspring. From a purchasing perspective this investment is not that complicated. All you have to do is ensure the validity of the land certificate.
Starting from the ownership, area, boundaries and allotment of the land. After checking the validity of the certificate, you can make land purchases at the notary public. Especially for plots of land, you must also check the development permit for the plots. Make sure you will not be constrained when applying for an IMB (Building Permit) if you want to build a building on that land.
Investment in vacant land or plots of land is relatively easy to sell. Until now, this investment is still in great demand, especially if you have land or lots in strategic places. The investment of vacant land is also relatively easy to sell because there is no interest in aligning the design with the wishes of the buyer. Unlike the case with home or building investment which has more variables to consider.
Rental Home Investments
A rental home investment can be made if you have more than one house where the house is not used for personal residence. House rentals are usually done annually.
In terms of buying a rental house, it is not as simple as buying vacant land. Apart from being concerned with the location of your home, you also have to consider many other variables. For example, the area of the house, the number of rooms, the design of the house and so on. Make sure the details of the house are in accordance with the needs of the market around that location.
If the house is rented out, the yield that can be obtained per year is generally ± 3% – 5% per year from the price of the house. The market share for renting a house is usually young families or families who have just had children. It can be said that rental housing investment offers slow moderate returns or slow and moderate returns.
Boarding House Investment (boarding house)
There are two types of boarding houses that are often used for investment. The two types are boarding houses in the form of ordinary houses and buildings that are shaped like apartments. For the purchase of a boarding house, location is a major consideration. If you want to immediately benefit from boarding rent, you should look for a location close to universities, offices or other workplaces such as factories.
After finding a strategic location for a boarding house, you must also consider the needs of prospective tenants. Make sure the price and boarding facilities that you will rent are in accordance with the needs of potential tenants in the vicinity. Even though you make a very luxurious and comfortable boarding house, no one will want to rent it if the price doesn’t match the potential tenants’ abilities.
Shop-house investment is a property investment with a fairly high yield. The promised yield is generally 6% – 9% per year, therefore shop-house investment is an investment with a quick return. The most important factor that must be considered in purchasing a shop house is location. Because the shop houses are usually used for businesses, you must ensure that the location of the shop houses to be purchased is strategic or predicted to be strategic.
Shop tenants need a strategic location that will attract clients or customers. If you choose a shop with a location that is not strategic, it will likely be difficult to rent it out. The rental period for the shop houses is generally in the medium term, namely 3-5 years.
Office Space Unit Investments
This investment has not been very popular in Indonesia. Generally, office space unit investment is only a lot in big cities such as Jakarta and Surabaya. This investment practice is usually in the form of a building that consists of many floors and many rooms will be rented out for office purposes. The promised yield in general is ± 7% – 10% per year, so this investment is included as an investment with a quick return.
If you want to buy this investment, you have to consider a strategic location. If possible, look for properties in the CBD (Central Business District) such as . A very strategic location will attract the attention of national and international class bona fide companies. Usually such large companies will lease office space units directly for a long period of time. At least 5 years of leasing is in your hands.
Apart from its strategic location, you should also look for office buildings that have a superblock concept. The superblock concept is an area concept consisting of 3 or more integrated properties. For example, an area consisting of office buildings, apartments and malls. This concept generally makes it easier for company employees. Employees can live in apartments, then work in office buildings and buy necessities at malls that are in the same location.
Apart from being attractive to prospective tenants, the office units in the superblock location will also attract the attention of investors. If you want to sell the property one day, the chances of the property being bought at an attractive price will be higher than an office property that doesn’t have that concept.
Property maintenance is not too different from the kiosk or shop unit maintenance system. Usually the building manager will provide cleaning and security facilities. Meanwhile, the internal maintenance of your office unit depends on the tenants who use it.
Apartment Unit Investments
Currently, apartment unit investment has become increasingly popular in Indonesia. Due to the high mobility of the community, it gradually takes a place to live in the city center. If you buy a house in the city center the price is definitely hard to find. If there is any, the price is sky high. Because of that, now there are apartments everywhere in Indonesia. The class also varies from lower, middle to upper class apartments.
The apartment rental system can vary. You can rent the apartment per day, week, month or year. The shorter the rental period, the more expensive the price per day. This rental can be managed privately or entrusted to an agent who usually takes care of apartment rentals. Generally, in an apartment building there is already an agent who is expert and knows the ins and outs of renting the apartment. If you find it difficult to market your own apartment rental, you can use the services of this agent.
In general, the yield that can be generated from renting an apartment unit is ± 7% – 12%. This figure is a relatively high number when compared to other property investments. It’s just that big benefits can be obtained if you choose an apartment that is strategic and of interest to tenants.
One of the reasons why people want to buy or rent an apartment is because of high mobility. Therefore they need a place to live that is located close to the city center or a place for their daily activities. If possible, you can look for apartments that are integrated with other places such as malls, schools, offices, etc. Most likely someone who works or has activities in this integrated property will be very interested in renting your apartment unit.
In addition, you also have to consider the competence of building managers. Look for a responsible manager so that the tenants of the apartment unit will feel comfortable and safe. If the occupants are safe, they will continue to rent your apartment unit.
In terms of maintenance, it is not much different from kiosk or shop units and office space units. The apartment building management will provide cleaning services, electricity, water and other services. You only need to pay the fee every month. But if your apartment is rented per month, generally tenants will pay these costs to the building manager. But the conditions in your apartment unit really depend on the tenant.
Investing in Condotel Units (Villatel)
Condotel has a concept similar to an apartment. The difference is that there is management that makes condotel units rentable like a hotel system. Generally, condotel managers will offer benefits to investors in the form of sharing the proceeds from the condotel unit rental.
Usually the profits are distributed every 3, 4, 6 or 12 months. In addition, investors are usually given the opportunity to stay at a condotel for 28 points a day each year. Today’s points are determined by management. For example, 1 normal day is considered 1 point day, while 1 day off is considered 2 or 3 points a day because of the large number of enthusiasts who want to rent the condotel unit.
Generally, condotels are in areas that have very high visitor rates. For example, like Bali, many developers are competing to build condotel properties in Bali because of the large number of visitors who have vacation in Bali.
While the villatel is a little different from the condotel. If the condotel has a concept similar to an apartment, the villlatel is slightly different physically. Generally, villas have the concept of a villa complex with a peaceful and private nuance. Besides that, condotel and villatel have different target markets. Condotels are generally aimed at middle to lower class visitors, while villatels are more aimed at the middle to upper class. For the villa rental and maintenance system, it is more or less the same as the system for condotel.