Obviously you pay the mortgage first but you wouldn't be bringing in enough to run at a profit over the long run.

Obviously a generality but the only ones I have ever had were inherited and ultimately ended up have to evict ever one.

Just bear in mind...you will probably operate in a grey zone (unless you open a business and get the licenses, which most people don't care to do) and obviously need quite some cash to get started seriously.

Are we missing something obvious?

They told me to collect the fee up front which obviously I cannot do.

Obviously major issues like leaks are not something you want to over look.

But that leaves me asking: If the Indonesian government indeed doesn't want foreigners to own/control land in the country, why would they allow for such an obvious loophole?

We have seen a few properties that are within our budget, but would obviously do some more thorough analysis on the properties before pulling the trigger.On the other hand, we have been more interested in STR's since we planned to start investing in real estate.

Obviously I could use the money to buy more more more, but there's something attractive about owning the rentals outright, then saving the additional cash flow to get the next one and so on. 

Obviously every market is different.