Based on these facts, the author tries to explore best practices (best practices) in charge rent on a property that could serve as a reference (benchmark) for Appraisers in Indonesia, particularly in the Directorate General of State Wealth, in conducting assessments of property rental rates.
Rental Rate Formula PMK based on the number 96 in 2007
As is well known that to determine the rental rates BMN, PMK 96-year 2007 numbers using the following formula:
Rent Assessment Formula Object Rental Rates
3.33% Vacant Land X Land X Land Value
Land and Building (Vacant Land Rent) + (6.64% X Building Size X Unit Price of new buildings in a state of X Value of Time Building)
Infrastructure Building X 6.64% Price Building Facility in New X Value Time Infrastructure Building
The main weakness of that formula is the establishment of a capitalization rate with the amount of rent that is certain and uniform for every situation, condition, and the area is: 3.33% for the rent of land and 6.64% for rental buildings or building infrastructure. Whereas, in the theory of assessment that have been proved by practice that applies everywhere, scale the same capitalization rate can not be applied to situations, conditions, and the different.
By using these formulas, the author found the reality on the ground that the results obtained with this formula often does not 'fit' with the market preference (generally lower than rates prevailing in the market). For that, the formula as stated in the PMK number 96 will need to be revisited given the low level of reliability values generated by these formulas.
In this writer's view, the determination of BMN rental rates that are not in accordance with the prevailing rates in the market will hurt the country. Source of losses to the state comes from two things, namely:
1. If rental rates are set too low, the potential loss of state revenues (non-tax) caused by too low rental tariff setting.
2. If lease rates are set too high, then the potential loss of state revenues (non-tax) caused by the absence of a third party who want to rent a rental fee BMN remember that too expensive.
This view was also expressed by Finkel (2009), which among others stated that the pricing is too high rent for a property will spend time and money from property owners to pay for advertising. One indication of the determination of rental rates are too high is how long the property is offered in the market? The longer the property is 'outstanding' (read: is offered) in the market so the property can be expected to offer less expensive.
Best Practices
To explore the best practices of rental fee assessment, the author conducted a study of the literature by examining the writings and articles related to the assessment of rental rates. Based on the results of research paper writer, found that the assessment approach is almost always used for assessment of rental rates is the market data approach. Finkel (2009) in his article titled "How to Determine Your Rent for Lease Options" states that:
"Real estate is valued by what other people (known as the market) are willing to pay in order to use of the property. This is the market rent value of the property "
From the statement seems clear that the market data approach to the primary approach in conducting an assessment of the tariff rent. In addition, in another article that quoted from www.usrentallisting.com mentioned:
"The question you may be asking yourself is," How much can I rent my house for? " This is an excellent question. In fact, before you decide to lease your property, you should find out what the fair market rent value is "
This statement further confirms the use of market data approach in determining the rental rate for a property. If we trace back the writings and related articles about the appraisal rental rate can be ascertained that the use of market data approach is very commonly used to assess the rental fee.
One thing to emphasize is the author rental rates generated by market data approach is not a single value but rather a 'range' of values. There is no 'singular values' that are considered correct and represents the market value, that there is 'fair value' so that all the results of the assessment is still in the 'range' fair value then it could be accepted in the assessment. However, if a value was outside the 'range' fair value then it can be questioned 'kewajarannya'. This was also confirmed by Finkel (2009) that the most likely are looking for 'range' fair value. Similarly, in an article titled "How to Determine Rental Rates For Your Deals" are quoted from http://articles.learntoberich.biz states that:
"Rents are not fixed numbers even for the same house ... So, when you do your research to determine what rent should be, Realize it is going to be a range of numbers and not a single number "
From the discussion above, it can be concluded that the best practice to determine the rental rates is to use the Market Data Approach. By using this approach will be investigated more deeply about the determination of the capitalization rate by using one of the formulas in the theory of standard assessments are as follows:
Net Operating Income
Value =
Capitalisation Rate
From the equation above, if we assume the 'Net Operating Income "as income from rental property owners and the' Value 'as the value of the property market, then we can find the magnitude of the capitalization rate (Capitalisation Rate) of lease:
Net Operating Income
Cap Rate =
Value
Thus, the capitalization rate rentals in an area depends on two factors namely the amount and the market rental rates the market value of property in the area. Based on the above equation can be understood that the capitalization rate rent for each situation, condition, and the region will vary and may not be as diseragamkan PMK formula in number 96.
Using the market data approach as the main approach, then to determine appropriate rental rates on a property is certainly necessary to survey / research applicable rental rates around the property (also known as Rent Survey / Research) in order to determine the tariff rentals in the area so that the market rental rates can be known. After knowing the market rental rates, the rental rate can be determined that 'fit' for our property by making adjustments (adjustments) in accordance with the situation and condition of the property that we have. This is similar to the assessment of the land by way of comparison data for the market to then do the adjustments necessary to fit the situation and condition of land assessed.
Rental Market Survey
To generate comparative data that the market rental rates to be reliable, there are some things that can be done by the assessors. The following tips compile author of several writings / articles that are successfully obtained from http://www.creonline.com/ titled "How to Determine Your Rent for Lease Options" by David Finkel, http://articles.learntoberich.biz with the title "How to Determine Rental Rates For Your Deals", www.usrentallisting.com entitled "How Do I Determine the Fair Market Rent for My House", and http://www.apartment-rental-listing-guide.info with the title "How to determine the optimum market rental rate?":
1. Perform data search market rental rates over the Internet. Currently the Internet has become an inseparable part of the assessment as a source of massive data and fast for Appraisers in conducting surveys of market data. However, it is certain that not all the data found on the internet can be relied upon. Assessors must be able to determine and select the data which is reliable, what sites are trustworthy, and forums what could be used as a source of data.
2. Do a search market rental rate data through the print media and property agents. Some print media such as "Property Indonesia" published room rental value in several office buildings in Jakarta in each release.
3. Conduct surveys to the field and ask the person or the other residents around the property to be assessed. Questions should be constructed so that not be 'offensive'. Questions like: "How much rent you pay a year to rent this stall?" Would sound 'offensive' to the respondent. Questions can be replaced with: "Do you know how the hell someone else pay the rent fee per month stand here?" So not too 'offensive' to the respondent.
4. Select the appropriate respondent. If the assessors get answers from people who are not in their capacity to respond to the reliability level should be in doubt. Examples of questionable reliability of respondents: children of renters (especially when the school was the high school level down), employee / servant of the tenant kiosk / shop, or shop owners around the object of rent assessment.
5. Think again answers obtained from the results of field surveys. The following answer includes the less reliable: "Well, do not know kaya'nya yes ... 5 million a month's rent", and the following answers can be relied upon in the category: "If I rent a month's pay 3 million, Mr. Amir is in My next 4 million because more gede stall ".
6. "Do not be afraid to use your acting skills, when you are doing your research". Author sentence of kutipkan www.usrentallisting.com article entitled "How Do I Determine the Fair Market Rent for My House". This means more or less is, "Do not hesitate to use acting skills while performing field surveys". It is more or less the same as the above sentence is also author of another article found in http://www.apartment-rental-listing-guide.info titled "How to determine the optimum market rental rate?" Which states that one of how to rent survey is to: "Become a 'pretend' renter '.
7. Allow sufficient time to conduct field surveys so that the market rent data obtained truly represent market conditions.
8. Regarding the amount of comparison data for the assessment of rental rates, the author best practices get is as follows:
a. Finkel (2009) stated that one of the most common mistakes in conducting the field survey is to obtain comparative data number 'less than 5 (five)'. This means, according to Finkel (2009) the amount of data that comparison at least 5 (five).
b. In http://www.apartment-rental-listing-guide.info article titled "How to determine the optimum market rental rate?" Stated that the surveyors are advised to visit 10 to 15 places / stalls / units in an apartment around the object assessment.
Well, how about in Indonesia? The author argues that the greater number of comparison data for the appraisal rental rate is better also for Appraisers. However, given the circumstances and rental market conditions in Indonesia are not as open markets in countries that have been developed, according to the opinion writer is the ideal number of comparison in Indonesia at least 3 (three) pieces. If it can be more than 3 (three) would be better. In addition, the usual obstacles faced by the assessors, especially in DJKN, is the limited time given to make the determination of rental rates so that the field survey could not be done optimally.
Conclusions
Based on the above presentation, it can be concluded that the application of the tariff formula for BMN rent in accordance with the PMK 96/2007 numbers are continuously facing the rental rate assessment methods in accordance with best practice is generally accepted by the market data approach. The difference between them is in determining the capitalization rate on the lease diseragamkan PMK was 96 for each situation, condition, and location, while the market data approach the level of capitalization will be found different for every situation, condition, and location. The author himself argues that the market data approach is the best way to determine the rental rates on a property because it reflects the forces of demand (demand) and supply (supply) in the market.
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