Paying Two Year’s Rent Upfront Normal in Indonesia

In Indonesia, when it comes to renting properties, there’s something that surprises many newcomers: paying 1-2 years’ worth of rent upfront, in addition to a month’s deposit, is considered the norm. Over a decade ago, it was even more extreme. Expats would front as much as three to five years’ rent. However, as companies became more conservative with their spending, the expectation shifted to about two years’ upfront payment. Today, while some property owners might be willing to negotiate down to a 6 months’ in advance, others remain adamant about getting two full years of rent upfront.

This practice has its roots in the past when multinational corporations would comfortably foot the housing bill for their foreign employees. But times have changed. With a decline in high-spending expatriates and a rise in the construction of new apartment units, there’s an abundance of vacant properties. This surplus provides prospective tenants with an upper hand in negotiations. So, if you’re considering a move to Indonesia, it’s worth trying to strike a deal. Some creative approaches include offering a partial upfront payment with the rest spread over the initial months of occupancy.

Moreover, it’s important for tenants to ensure their contracts are legally sound. It would be best to compose the rental agreement in Indonesian. Clauses covering repairs and maintenance should be clear, with a general practice being tenants covering minor repairs and owners taking responsibility for significant damages. Notarizing the contract is a good idea as well. It’s also advisable to include provisions that protect the renter’s rights, such as in the event of the property’s sale or the landlord’s death.

Lastly, noise can be an unexpected challenge. Before making a commitment, visiting the property at different times, even during the wee hours of the morning, can give you a real sense of the environment you might soon call home.

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