Real State in Bali?Profitable?

Question

Hello,

I am looking to buy villas fro 3 to 5 years in Bali, Indonesia. I want to improve them a bit and rent them out as much as possible. I know it is profitable,

Steven Gijsman · Answer

I am currently living in Bali and investing in real estate myself as well. I own two villas and I am now developing properties that are being sold "off-plan." The housing market in Bali is very active, with yearly rental ROIs of 25-40% being quite common. Demand for housing in Bali exceeds availability, and favorable construction costs, salaries, regulations, and taxes make Bali an attractive destination for real estate investors.

As @Benjamin Werner mentioned owning property in Bali works a bit differently than you probably would expect. 'Owning' land for foreign individuals is not possible. This is why most properties are 'bought' with a lease-hold contract of x years + y years extension (mostly 25-30 years + 25-30years extension).

Bali is an organized wild-west with a lot of opportunities, that's for sure.

If you have any questions please let me know. Looking forward to connecting!

Brandon Goldsmith · Answer

I have heard of a decent amount of people either investing/ living in Bali, it seems to be a pretty big hub for digital nomads. I would just be careful if you have the right to the land as well, becasue some countries in Asia only will allow you to own the actual property.  I am personally looking mostly in South America, would love to hear what you find out though! @Jose M Ruiz

Rusdianto Rusdianto · Answer

Hey there,

That sounds like a solid plan! Bali’s rental market is definitely profitable, especially if you’re looking at holding the villas for 3 to 5 years. A lot of areas are growing fast, so improving the villas and renting them out is a great way to maximize returns.

I’m actually a real estate agent in Kedungu, Tabanan—an area that’s developing quickly and just 15 minutes from Canggu. It’s perfect for this kind of strategy since there’s a lot of interest from both expats and tourists. If you’re interested in the Bali market, feel free to hit me up. I’d be happy to help with more details or find the right properties for you!

Cheers!

Montero Carney · Answer

Can someone from the group clarify if you can actually own the land besides marrying a Indonesian?  Is there a minimum amount to invest in starting a business which would allow you to own the land?  Would 100K get you a one bedroom apartment?  Or is it advisable to go with the larger units for better ROI?

Benjamin Werner · Answer

You can never actually own the land in Indonesia. Not even by marrying an Indonesian.

What some foreigners do is buy freehold land through an Indonesian "straw man" or nominee arrangements. This is highly grey zone stuff, but even law firms or legal service providers on Bali provide this service. Basically a local holds the land and then the foreigner is secured with several legal agreements, such as loan agreements and powers of attorney, making you the "beneficial owner". But in case of problems or disagreements, does this hold up in court? What if authorities crack down and invalidate this arrangements? The legal risks are significant, so I would advise to avoid it.Finally, 100K will easily get you a one-bedroom leasehold apartment, probably even a small villa if you're willing to go a bit further from the hotspots. In my experience ROI-wise: Smaller Units > Larger UnitsThe Bali real estate market is shifting - supply is starting to exceed demand, occupancy rates are down, and sales are becoming more difficult. With so many new developments and ongoing construction, it might be worth sitting on the fence and waiting for some good deals to emerge.

Benjamin Werner · Answer

Since there is no reply from OP, let me chip in. From a few people I know that do STR in Bali, I can confirm it's highly profitable. 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. Basically you need to be able to pay a large part of a long-term (multi-year) lease up-front, then still have some cash for renovation and interior/furniture, to finally recoup the investment through STR and a hopefully very quick way. The longer the lease terms you negotiate, the better the deals, but obviously also more cash outlay required (potential risk). From the examples I know and confirmed, Yearly return is anything from 30%-100% or even more (due to "Covid Deals")

Krystian Kucharzyk · Answer

I know this is a super old post but figured I'd give it a shot!I'm also looking at buying in Bali, been going back and forth and pretty serious about investing.  Would love to hear about your experience @Jose M Ruiz and any advice you'd be willing to share!

Zachary Ray · Answer

This is fascinating to me, let us know what you end up finding out.

Steven Foster Wilson · Answer

Were you able to get any additional information on this?

Real State in Bali?Profitable?

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