Are you interested in buying real estate property in Bali and owning a piece of Paradise? Then you came to the right place.
We understand that taking the plunge and pulling the trigger on a villa in Bali can be a big decision! We are getting an average of 150 enquiries a month from customers from around the world, just like you, who want to invest and own a villa in Bali.
We summarized our answers to the main inquires to a short check-list of DOs and DON’Ts that you can use. Enjoy!
If you dream of owning a piece of paradise in Bali, then you should know it is still very much possible (and still affordable) but need to be done right. Indonesia is a bureaucratic country, there are plenty of legal and tax regulations to be aware of and mistakes to be avoided.
Choose a location you love because if you, a foreigner, love it, other foreigners (who are potential guests to your villa) will, most likely, like it too!
As in any real estate investment, it is about location, location and location. If you are looking for safe returns in 2019-2022, target the town of Ubud. The investment will return 30% higher than traditional investment area such as Seminyak that became over built and crowded and the returns will come much faster. Central Bali is becoming more and more developed and prices are going up.
Don’t buy a villa or property far away from attractions. We have seen dozens of villas on the Bukit Peninsula, branding themselves as being in Uluwatu or Palangan, but in fact are 5KM+ from any meaningful attraction. This doesn’t work for tourists who want to stay in a beautiful villa but also in a short distance from attractions. Most tourists coming to Bali will look for a villa near main attraction or close to beach. Very few visitors will compromise on their ability to see things just to stay in a cool looking villa. There are enough choices out there for them to get both. Also, make sure your villa is in a quiet neighborhood, away from the main street and traffic noise as you don’t want guests complaining that they couldn’t get a good night sleep.
Most Villas in Bali are priced between $100,000 USD- $500,000 USD depending on size, location and quality of construction. The higher the price you’ll pay to acquire the villa the longer it will take to recoup the original investment and the lower your overall return on investment will be! If you plan to rent out your villa, you should also add to your budget, buying furniture (15%) ,paying for a villa manager and cleaning staff and ongoing maintenance. So don't blow all your budget on the purchase price alone. Do not compromise on service as Bali tourists are also coming for the hospitality, especially when they travel with the family.
Don’t overpay. Do your market research. Typically your villa should be repaid in 4 to 6 years of rentals, depending on your location and your ability to market the villa. Don’t believe agents or advertising boards that promise returns of 20%+. A good return in Bali these days is 10-15%. You can find an ROI calculation HERE.
Real Estate Agents DO:
Do meet professional agents that have a proper company, an office and a recognized name in the market. A good agent will guide you through the whole process of buying due diligence (including reviewing title and lien to make sure there are no outstanding obligations) and will show you pre-verified villas with proper property titles. If you are closing a deal with an agent, make sure he or she has a contract with the owner of the land or villa you are targeting.
Don’t trust the many agents out there that have “friends” or “family” selling a villa or piece of land. They are usually steering you in the wrong direction. Needless to say, they won’t be there if problems occur. They have no legal right to assist you in the transaction. A good agent, again, has a contract with the owner of the villa or land (or his/her official representative) and can assist you the entire time even after the transaction was completed.
Do it the legal way. Your villa needs a PONDOK WISATA (guest house license) to be able to rent out the villa. Do your due diligence. If you buy land, make sure the zoning of the neighborhood is not agricultural as this will make it impossible to get a building permit. Check if there are any roads or construction projects to be built around the villa. Again, a good agent or a good notary will guide you through the legal process.
Don’t buy freehold. It is not authorized for a foreigner to own property in Bali. Any free-hold transaction is unlawful and also more expensive if done through loopholes. You can only lease a villa or land in Bali. Don’t buy land in a green zone. Don’t use just any notary or agent. Be careful and respectful of laws just like you would be in the U.S. Europe, Singapore or Australia.