Why a Rp500 Million House Isn't Necessarily Cheaper Than a Rp700 Million House

The price listed in the brochure is only one part of the cost of owning a house.

After the signing, there's still renovation, transportation costs, electricity, maintenance, and the time you spend every day commuting to and from work.

This is where the concept of Total Cost of Ownership (TCO) becomes important.

Simply put, TCO is a way of looking at how much you actually spend to own and live in a house over several years, not just the price you pay when you buy it.

And from this perspective, a Rp500 million house could actually turn out to be more expensive than it appears.

A Rp500 million house: cheaper upfront, not necessarily cheaper down the line

Imagine there are two houses.

House A — Rp500 million

The location is a bit further from the center of activity.

The house is indeed cheaper, but its condition requires some renovation before it's comfortable to live in.

You might need to fix the bathroom, repaint, add a canopy, fix the kitchen, or adjust some parts of the house to fit your family's needs.

Not to mention the fairly long commute to the office.

At a glance:

House price: Rp500 million.

But after buying it:

Renovation: Rp50 million
Additional transportation: Rp1.5 million/month

If that additional transportation cost continues for five years:

Rp1.5 million × 60 months = Rp90 million

That means, from just these two components alone, there's already an additional:

Rp140 million.

The house price that was originally Rp500 million has now, simply put, become around Rp640 million, even before calculating maintenance costs and other ownership costs.

Of course, these figures are just illustrations. Renovation and transportation costs will differ for each person.

But the way of thinking is what matters:

don't stop calculating at the purchase price.

Now look at the Rp700 million house

The second house is more expensive.

Rp700 million.

At a glance, it certainly feels heavier.

But this house might be located in an already-developed area, with better road access, closer to the toll road, schools, shopping centers, and workplaces.

Its condition is also fairly move-in ready, so you don't need to do major renovations.

For example, you might only need to spend a small amount to adjust the house to your needs.

And because the location is closer to your daily activities, your transportation costs could be lower.

The purchase price is indeed higher.

But the costs that come afterward might be more controlled.

This is where the comparison starts to get interesting.

The house price isn't the only cost that needs to be calculated

When buying a house, the biggest attention is usually on the property price and the mortgage installments.

In fact, there are many other costs that also make up the total cost of ownership.

For example:

• down payment
• mortgage fees
• notary and administration fees
• renovation
• furniture
• electricity and water
• home maintenance
• transportation costs
• travel costs to school or the office
• neighborhood/community fees
• and various other needs while living in the house.

Not everything needs to be calculated in extreme detail.

But at the very least you need to be aware that:

house price ≠ total cost of owning a house.

Location can be a hidden cost

This is one of the things most often overlooked.

For example, a Rp500 million house is 20 kilometers from the office.

While a Rp700 million house is only 8 kilometers away.

The difference in house price is indeed Rp200 million.

But try calculating the commute over the years.

If you spend an extra Rp1 million every month on transportation because the house is further away, over five years that amount becomes:

Rp1 million × 60 months = Rp60 million.

Not including time.

If you have to spend an extra hour on the road every day, over a month that amount of time can be very significant.

That time doesn't show up in the house price table.

But you're still "paying" for it.

That's why, when comparing two houses, don't just ask:

"Which one is cheaper?"

Try asking too:

"Which one makes my cost of living more reasonable?"

A cheap house that needs renovation

A house with a lower price often looks appealing too because you feel you still have room to adjust it yourself.

And that's not always bad.

In fact, for some people, buying a cheaper house and then renovating it gradually can be a good strategy.

The problem arises when the renovation isn't factored in from the start.

The roof needs fixing.

The bathroom needs renovating.

The kitchen isn't suitable yet.

The electrical capacity needs to be increased.

A fence needs to be built.

A canopy needs to be installed.

Suddenly, the Rp500 million house needs tens to hundreds of millions more to truly match your needs.

That's why, before buying a house that needs renovation, don't just ask:

"How much is the house?"

Ask:

"How much will it cost to turn this house into the house I want?"

A more expensive house can provide efficiency

Now let's look at the other side.

A house priced at Rp700 million might be located in an already-developed area.

There are schools around the area.

Daily necessities centers are easy to reach.

Access to the main road is better.

The distance to the toll road is closer.

The neighborhood already has complete facilities.

All of these things aren't just selling points for an ad.

For residents, all of it can mean more efficient costs and time.

You might not need to travel far to buy daily necessities.

Your children won't need too long a commute to school.

The trip to the office can be shorter.

And when you one day want to resell the house, an already-developed area can also become a factor the market takes into consideration.

Of course, this doesn't mean a more expensive house is necessarily more profitable.

An expensive location still has to make sense for your needs and financial capacity.

Don't buy facilities you don't need

There's one more thing to pay attention to.

The TCO concept doesn't mean:

"If an expensive house has more complete facilities, then the expensive house must be better."

No.

If you don't need certain facilities, paying more to get them isn't necessarily efficient either.

For example, you buy a more expensive house just because it's close to facilities you actually never use.

Or you buy a house with a much larger size than your family actually needs.

In the end, you're paying more for something that doesn't provide meaningful benefit in your daily life.

So what you're looking for isn't the most expensive house.

What you're looking for is the house with the overall cost that makes the most sense for your needs.

Try calculating it a different way

Instead of comparing:

House A = Rp500 million
House B = Rp700 million

Try changing it to:

House A

Purchase price: Rp500 million

• renovation: Rp50 million
• additional transportation: Rp90 million
• house adjustment needs: Rp20 million

Illustrative total: Rp660 million

House B

Purchase price: Rp700 million

• light renovation: Rp15 million
• additional transportation: Rp30 million
• house adjustment needs: Rp10 million

Illustrative total: Rp755 million

Now the difference is no longer Rp200 million.

It becomes about Rp95 million based on this illustration.

And the result could be different if your conditions, needs, and length of stay are different.

This is the point of calculating TCO.

Not to prove that an expensive house is always cheaper.

But to show that the purchase price isn't the only number that needs to be considered.

What about a mortgage (KPR)?

This calculation becomes even more important if the house is bought using a mortgage (KPR).

Because besides the house price, you also have a long-term installment commitment.

For example, a cheaper house does result in lower installments.

But if you have to spend more on transportation every month and immediately carry out major renovations right after handover, your cash flow can still feel heavy.

On the other hand, a house with higher installments might provide a more efficient cost of living.

Of course, this doesn't mean you should take a bigger mortgage.

Your installment capacity should still be the main limit.

A house that's theoretically more efficient still isn't the right choice if the installments put too much pressure on your monthly finances.

A house isn't just a place you buy, but a place you live your life

When buying a house, we often focus too much on one day:

the day the transaction happens.

Whereas the house will be used for years to come.

You'll leave for work from there.

Your children might leave for school from there.

You'll go shopping from there.

You'll welcome family from there.

And every day you'll feel the impact of the location, access, building condition, and neighborhood you chose.

That's why the decision to buy a house shouldn't only answer:

"Can I afford to buy this house?"

But also:

"Can I afford to live my life in this house?"

The second question has a much longer answer.

So, a Rp500 million house or a Rp700 million house?

There's no answer that's always right.

A Rp500 million house can be an excellent choice if the location suits you, the condition is good, the transportation costs are still reasonable, and it doesn't need major renovation.

Likewise, a Rp700 million house can be the more appropriate choice if the price difference provides real benefits in daily life: better access, a more developed neighborhood, move-in ready condition, and better-met family needs.

What needs to be avoided is buying just because you see the smallest number.

Because a cheap house can become expensive after you live in it.

And a more expensive house can make sense once all the costs and benefits are calculated over the long term.

Before buying, try calculating these 6 things

Before deciding, compare both houses in terms of:

1. Purchase price and installments
How much do you really need to pay every month?

2. Renovation costs
How much money needs to be prepared to make the house move-in ready?

3. Transportation costs
What are your commuting costs every month?

4. Travel time
How much time will you spend on the road?

5. Cost of living around the house
How easy is it to access schools, workplaces, shopping centers, healthcare facilities, and daily necessities?

6. Condition of the area
Is the infrastructure already developed and supportive of your needs?

After that, only then look back at the house price.

The result might still show the Rp500 million house as the best choice.

Or it might actually be the Rp700 million house.

What matters is that you choose based on calculation, not just based on the number that looks the cheapest.

The right house isn't always the one with the lowest price

In the end, buying a house isn't like buying an item that's done once the transaction is complete.

A house is a long-term decision.

That's why, don't just look for the cheapest price.

Look for the most reasonable cost of living.

A Rp500 million house can be an excellent decision.

A Rp700 million house can also be an excellent decision.

It all comes back to your needs, financial capacity, and the life you want to live in it.

Because a truly "cheap" house isn't always the house with the lowest purchase price.

A cheaper house is one whose overall cost still makes sense for you to live with, not just to buy.

Looking for a House in Semarang?

Choosing a house isn't just about finding a price that fits your budget. Location, access, building condition, neighborhood, and daily needs also need to be taken into account.

Mirailand helps you find property options in Semarang and its surrounding areas based on your budget, needs, and life plans.

If you're still unsure about choosing an area or want to compare several house options, tell Mirailand about your needs.

We'll help you look at properties not just by their purchase price, but also by the value and comfort you get in the long run.

Mirailand — helping you find the right place to come home to.