4 Concepts of Investing in Property in Indonesia

 

BTPI.Co focuses on purchasing investment property under 4 concepts.

 

They are;

 

 

Our Fee's for service are listed below.

 

 

 

 

Land Banking:

"Land Banking" is a very apt term. Simply, land is purchased, one waits a period of time and one sells the property hopefully for a profit. This type of investment concept is the choice for people looking at property as an investment vehicle with a timeframe of 3-5 years.

 

Nowadays we live in a very hectic world where nobody really knows where or what to do with cash assets in terms of relatively safe, productive investments. People who have time and experience to actively manage a businesses or property in a very specific sector can be an "active investor".

 

A "passive investor" are those that normally have a daily job or career and are not able or not willing to actively manage their investments. They invest (contrary to active investors) in a wide array of sectors and vehicles. Most people use funds, pension plans, bonds or real estate for this approach. Most people fall into the "passive investor" description. Again, people want a return from their money but very few are able to actively manage their invested money and dedicate a great deal of time, know-how and efforts to this purpose.

 

Interest rates are at a minimum so bank deposits are not interesting and the stock market is volatile and still overpriced. Even if they were offering higher returns you will never be rich out of these type of investments. Companies can go bankrupt overnight resulting in the investor losing all their investment. Bonds are also providing minimum returns and the safety of all aforementioned investment possibilities are put into question not only by hard working professionals but also by high net worth clients that already allocated an important percentage of their assets in these products. They are also looking for options.

 

Investing in an expanding businesses is another good idea but this suits very few profiles as you must be an "active investor". The deal of work, knowledge and experience involved is beyond the reach of 99% of people.

 

Main problem is that you can not just park some money in a bank, real estate, fund, bond or stock without the feeling you are risking your assets to a casino like banking system or a insolvent Government that can grab your assets through hig taxation or plain nationalization. One of the secrets of wealthy families is diversification in asset types and jurisdictions.

 

Having all your assets in the banking system and some in real estate in the same country is probably not the safest nor soundest approach to wealth creation and preservation for "passive investors".

 

"Land banking" is such an option for those people looking for something in return for their money. Land is something you can have and touch. In our case, you can enjoy it next to a beautiful beach and you can even have a farm or an income generating boutique hotel or B&B throughout the timeframe of the project through our "Dream Property" concept. It has an intrinsic value, that inflation does not erode over time. It is also taxed more reasonably.

 

"Land banking" is the perfect solution for diversification and higher returns. We look for prime locations in a fast developing country like Indonesia where land prices are rising. At the same time taxes in the country are very low and the fact that you use our company to hold title of it also guarantees asset protection as it can not be considered as part of your assets by any plaintiff.

 

It combines two concepts:

1.- Wealth creation and diversification for passive investors offering a "bricks and mortar" asset with more potential of investment return. Less taxes, hassles and maintenance issues,...

2.- Asset protection. Your money is out of a jurisdiction where it could be highly taxed and/or even seized with an extra wall of protection by owning your land through a legal person (nominee) via our Indonesian PT company.

 

Property Portfolio's:

When an interesting property is identified BTPI.Co creates a property portfolio which outlines the details of the property and an estimated financial outline for the "Land Banking" concept.  For some properties we may suggest some further investment into the project such as installing services (road access, water, electricity) to improve the properties value and attraction.

In addition, after reviewing the property, we will may include either one or two "Dream Property" concept outlines or a seggested "Development" concept depending on what we have seen and what we believe would be a good concept for a particular property.  These can be viewed by selecting a listed property.

 

Dream Property:

"Dream Property" is a broad term but if you can, imagine owning a piece of land in a tropical place, with a villa and/or a small business operation which covers the cost of operating the property, where you can spend time enjoying yourself while the land investment grows, then eventually, sell of a portion of the land or the whole property at the future appreciated value to recoup your costs and/or enjoy the financial return, well that could be a dream come true.

 

Thats what brought me to this area over a year ago.

 

The "Dream Property" concept involves the construction of a common villa or similar structure, a small business such as a beach bar restaurant or hostel operation or a combination of all, on a portion of the property for the combined use of the owner(s), while leaving the remaining portion of property untouched for future sale.  In essence the Dream Property concept is the Land Banking concept with partial property utilization during the timeframe of the property project.

 

This concept of investment is more suited to clients who are able and want to visit the property on a fairly regular basis such as professional expatriates living in Asia or the Middle East, who wish to invest in property and are able to travel to the property occasionally or regularly.

 

To expand on the options possible, the property could either be kept whole with a portion designated as common use or partitioned to have "lots" designated for each partner as their "own" to do with as they may, within reason.  A common area of the property could be where a 3-5 bedroom villa would be built. In addition a beach bar restaurant type operation built for villa and outside guests would be a very attractive option. This operation would employ locals and thats what you want, local involvement in the property so your property is protected.

Property Portfolio's:

When an interesting property is identified BTPI.Co creates a property portfolio which outlines the details of the property and an estimated financial outline for the "Land Banking" concept.  For some properties we may suggest some further investment into the project such as installing services (road access, water, electricity) to improve the properties value and attraction.

In addition, after reviewing the property, we will may include either one or two "Dream Property" concept outlines or a seggested "Development" concept depending on what we have seen and what we believe would be a good concept for a particular property.  These can be viewed by selecting a listed property.

 

Assisted Purchase:

The "Assisted Purchase" concept involves a client or corporation wishing to purchase (Hak Milik) or lease (Hak Pakai) property for their own usage and wanting BTPI.Co's assistance only in the purchase or leasing process.  In this concept, BTPI.Co would utilize a nominee of the clients choice or our suggested nominee other than BTPI.Co's standard nominee Alfafa Murtany.  Unlike the Land Banking or Dream Property concepts, BTPI.Co's involvement ends at the completion of purchase.

 

 

Development Property:

The "Development Property" concept would follow or be combined with an "Assisted Purchase" concept where BTPI.Co would complete a property purchase and offer an estimate for property development.  Examples of development could be the construction of a resort or business on the whole property or construction of a villa for personal use as a second home or vacation home.

Through our local construction company contacts and material suppliers BTPI.Co is able to arrange a complete outline and estimate for a resort or condo building.  Through our local government contacts and our notary we can arrange all permits, certificates, surveys and design preparations, manage the construction process as well as continue ongoing management of operations after completion of construction.

 

 

Fee's For Service:

For our "Land Banking" and "Dream Property" concepts, BTPI.Co maintains an ongoing long term involvement with these projects, from start to finish.  For this service we charge:

  • 10% fee of selling price at the end of project term.

 note:   10% after the "costs" involved of selling, minus the 1% amount we collected upon purchase and the annual admin fee is subtracted.

note:    We charge a 1% purchase price  fee as well as an annual administration fee which are outlined in the project portfolio.  Because we have long term involvement in the project we subtract our 1% purchase fee and the annual fee from our end of the 10% fee we charge after sale completion.  Our reward comes once your rewarded which is after the sale. 

 

For the Assisted Purchase and/or Development concepts BTPI.Co charges;

  • 3% fee of buying price (not including the "costs" of purchase).

 

 

 

 

To start working with us today

Sign Up For Email Notifications