A kontrakan petak is a row of small houses under one long roof. Each unit (petak) has its own door, usually with one or two rooms, a bathroom and a small kitchen.
This kind of rental is familiar to young families, workers and newcomers who aren’t ready to buy a home. For landowners, it appeals because the building is simple and the income comes from several units at once.
This guide is for anyone weighing up building or buying a kontrakan petak. It covers what to calculate, what to arrange and what to manage to keep it running.
Kontrakan petak versus kos: the difference
Both are rental businesses, but they work differently.
- What is let. A kontrakan is let as a complete small house. A kos (boarding house) is let by the room, often with a shared bathroom or kitchen.
- The tenants. Kontrakan units mostly house families. A kos mostly houses individuals, such as students and single workers.
- Day-to-day work. Kontrakan tenants look after their own unit and pay for electricity through their own meter. A kos often calls for extra services such as cleaning shared areas and internet.
- Land. A kontrakan needs more land per tenant than a kos.
If you are also considering a kos, the comparison is in our guide to starting a boarding house business.
Choosing suitable land
The land decides how many units you can build, and how happy tenants will be living there.
- Access. A road that motorbikes and cars can use, and that doesn’t flood in the rainy season.
- Flooding and drainage. On low land, floors need raising and wastewater needs a clear way out. Don’t let your drains flood the neighbours.
- Clean water. Check whether the PDAM (the regional water utility) can connect each unit. If you rely on a bore well on peat land, plan for filtering, because the water can be brown and acidic.
- Electricity. One PLN meter per unit keeps bills clear and prevents disputes. Every new connection needs a Sertifikat Laik Operasi (SLO, the electrical safety certificate).
- A septic tank that the emptying truck can reach.
- Plot shape. A long, deep plot suits a row of units facing a shared access path.
- Nearness to workplaces, markets and schools.
Before buying land, ask for a Keterangan Rencana Kota or Kabupaten (KRK, the local planning statement) if your area issues one. It sets the Koefisien Dasar Bangunan (KDB, the share of the plot that may be built on) and the Garis Sempadan Bangunan (GSB, the building setback from the road). Together they decide how many units fit.
A simple building and its permits
A kontrakan petak doesn’t need to be fancy, but it should last and be easy to maintain.
- Floors high enough above the road and yard, based on the site’s flood history.
- Ventilation and light. Units in a row only have windows at the front and back, so plan the openings carefully.
- Party walls up to the roof, so sound doesn’t carry and fire doesn’t spread quickly.
- Gutters and drains for each unit, so rainwater doesn’t run into the next one.
- The same fittings in every unit, so spare parts are easy to find.
On soft ground the foundations need special attention, for example galam timber piles (cerucuk galam). You can estimate the building cost with the method in our guide to estimating the cost of building a house.
A new building needs a Persetujuan Bangunan Gedung (PBG, the building approval that replaced the old IMB building permit) and, once finished, a Sertifikat Laik Fungsi (SLF, the certificate that a building is fit for use). Check the land’s zoning with the local spatial planning office as well. If you run it as a business, ask whether you need a Nomor Induk Berusaha (NIB, the business identification number) through the Online Single Submission (OSS) system.
Talk the plans over with the head of the RT (the neighbourhood unit) and the neighbours before you start. They are the ones who will live with the effects, from drainage to parking.
Worked numbers with occupancy
A kontrakan rarely stays full all year. Build occupancy into your numbers from the start.
Worked example (illustrative numbers only):
- Six units at Rp 1 million per unit per month. Fully let all year, that is Rp 72 million.
- At 85 percent occupancy, the rent actually received is Rp 61.2 million.
- Deduct the final income tax (PPh final) of 10 percent, Rp 6.12 million, the Pajak Bumi dan Bangunan (PBB, the annual land and building tax) and dues of Rp 2 million, and a maintenance fund of Rp 6 million. About Rp 47 million is left.
- If the land and building cost Rp 800 million, the net return is about 5.9 percent a year.
Now drop occupancy to 70 percent. The rent received falls to Rp 50.4 million, and the net return to about 4.7 percent.
The lesson is simple: occupancy matters more than a small difference in rent. How to set the rent is in our guide to setting a fair rent, and the tax rules are in our guide to tax on rental income.
If you are buying a kontrakan that is already running, don’t take the seller’s numbers at face value. Ask for the rent records and proof of payments for the past few years, inspect every unit, and talk to the tenants.
Screening tenants and collecting rent
The right tenants save you a lot of trouble. Before accepting one:
- Look at their ID card and family card, and note who will live there.
- Ask about their work and judge whether they can pay.
- Ask for a reference from their previous landlord if there is one.
- Explain the rules: parking, rubbish, overnight guests and quiet at night.
Make a written agreement for every unit, however simple. Write down the rent, the due date, the deposit and the rules for moving out.
Decide too whether rent is paid monthly or yearly. Monthly rent is easier for tenants but needs disciplined collection. Yearly rent gives you cash certainty, but not every tenant can pay a year upfront.
For collection, set one due date and one receiving account. Send a reminder a few days before, record every payment in a book or spreadsheet per unit, and give receipts. Being firm from the first month stops arrears piling up.
Ask new tenants to register with the head of the RT. It helps neighbourhood security and keeps relations with residents good.
Maintenance fund, tax and risks
Set aside a maintenance fund from every rent payment in a separate account. It pays for repainting when tenants change, roof leaks, water pumps, locks and septic tank emptying.
The final PPh of 10 percent on gross rent applies to a kontrakan, under Government Regulation (PP) No. 34 of 2017. Since kontrakan tenants are usually individuals, you pay it yourself, generally by the 15th of the following month. PBB is still due every year.
Risks to allow for:
- New kontrakan nearby that push down rents and occupancy.
- Floods that damage units and drive tenants away.
- Tenants in arrears who are hard to move out.
- Disputes with neighbours over drainage, parking or noise.
- An ageing building, with upkeep costs rising year by year.
- Your own time, because managing several units still takes regular attention.
Next steps
- Find land with good access, water and drainage, and ask for a KRK if one is available.
- Survey kontrakan rents in the area and how quickly units there fill up.
- Run the numbers at two occupancy levels, one optimistic and one cautious.
- Get the PBG before you build, and talk the plans through with the RT.
Land currently marketed by Vorneo is on the property listings page.
