How to start Bali long-term real estate rentals?
Foreigners can start a long-term real estate rental business in Bali by following six steps:
- Establish a PT PMA in Bali
- Find the perfect real estate property
- Get licenses to build or renovate
- Hire a maid/housekeeper for your villa in Bali
- List your Bali villa on booking websites
- Maintenance for your villa
Step 1: Establish a PT PMA in Bali
Starting Bali long-term real estate rentals involves establishing a PT PMA, meaning Perseroan Terbatas Penanaman Modal Asing. This foreign-owned entity lets you undertake commercial activities in Bali, such as Bali long-term real estate rentals. You must obtain a business license from the Indonesia Investment Coordinating Board (BKPM). This process requires submitting an investment plan, minimum paid-up capital of IDR 2.5 billion ($157,500), and electing a board of directors.
Step 2: Find the perfect real estate property
Finding the perfect property for your villa rental business in Bali is the next step after establishing a PT PMA. Make sure the property meets all the needs of potential guests and is located in a popular location. The best place depends on the purpose. When starting Bali long-term real estate rentals, ensure the property is located in areas with many digital nomads and expats, such as Canggu, Pererenan, Umulas, and Uluwatu. Before hunting properties, ensure you have an idea of the layout, design, and style you want, whether you’re aiming to establish a luxury villa for rent in Bali or a cheap villa for rent in Bali.
Step 3: Get licenses to build or renovate
You can buy a finished property without renovating it, although you might want to renovate it before starting your Bali long-term real estate rentals. Another option is to buy or lease land and then build a villa. You must obtain a Hak Guna Bangunan (HGB) land title in that case. Another license to consider is Building Approval (PBG), which gives you the right to start the construction. Applying for the proper licenses might take a while but it cannot be skipped.
Step 4: Hire a maid/housekeeper for your villa in Bali
A clean and secure Bali villa for rent monthly is critical to attracting tourists, expats, and digital nomads. Regularly cleaning the villa, taking care of utilities, and assisting guests during check-in and check-out are essential tasks that a maid or housekeeper can handle. You may also consider installing security cameras or hiring a security guard for added safety.
Step 5: List your Bali villa on booking websites
Many people use platforms like Booking.com and Airbnb when they search for a villa for rent in Bali for the long term, whether they want to rent a villa in Bali for three months, six months, one year, or longer. That’s why listing your villa in Bali on these booking websites is advised, as it enables you to showcase your villa’s unique features to a global audience. Social media platforms like Instagram and Facebook can also help create a brand presence and engage with potential guests.
Step 6: Maintenance for your villa
Maintenance is the key to success for your Bali long-term real estate rentals. Property management companies can help maintain your villa and ensure guests’ satisfaction. This is crucial, especially when considering the monthly rental Bali market.
How to become successful with villa rentals in Bali?
Getting started with Bali long-term real estate rentals may seem overwhelming. But, with the right approach and planning, you can quickly establish a successful business with villas for rent in Bali. Whether it’s a luxury villa in Uluwatu, a private villa in Seminyak, a cheap villa in Lovina, or a rental apartment in Pererenan, the potential for success in Bali’s real estate market is huge. Patience and persistence are key to success in your journey to rent a villa in Bali for three months or even longer. With time, you will successfully navigate the Bali monthly rentals market, with apartments and private villas in Bali.
Short-term rentals vs. long-term rentals in Bali
Whether you’re planning to rent a luxury villa for rent in Bali or a cheaper option, the Bali real estate market offers both short-term and long-term rentals. Each type of rental serves different purposes and comes with its unique set of advantages.
Short-term villa rentals in Bali
Short-term rentals, like a villa for rent in Bali’s Seminyak, are usually rented out daily, weekly, or for up to three months. This model is popular among tourists and travelers seeking a brief stay. These properties, such as a villa for rent in Sanur or a Pererenan Bali villa for rent, are often fully furnished and equipped with amenities catering to holiday-goers.
Short-term rentals can yield higher profits for landlords due to their high daily rates. However, they require more management due to frequent check-ins and check-outs. Additionally, there might be periods of low occupancy, especially during off-peak seasons.
Bali long-term real estate rentals
Villas for rent in Bali long term are typically leased for a year or more. These are popular among expats, digital nomads, and individuals who choose Bali as their home base. Locations like Seminyak, Umalas, Pererenan, Uluwatu, and Canggu are hotspots for Bali long-term real estate rentals.
Long-term rentals in Bali’s Canggu and similar areas can offer a steady income stream with less management hassle than short-term rentals, as the turnover rate is lower. However, the monthly income might be lower compared to the potential earnings of short-term rentals.
What is better?
Choosing between short-term and long-term rentals depends on your investment goals, available time for property management, and risk tolerance. It’s also essential to understand the laws and regulations that apply to each type of rental to ensure your Bali long-term real estate rentals or short-term rental business is compliant. For example, a PT PMA allows foreigners to engage in commercial activities such as establishing a Bali villa for rent monthly or short-term rentals. Acquiring the necessary licenses is a must.
How to buy and rent out property in Bali?
Foreigners who want to invest in Bali can enter the lucrative market by establishing a PT PMA. This allows foreigners to engage in commercial activities, including the ability to lease or buy freehold land/property. It’s important to note that only Indonesian citizens and legally registered entities can directly acquire Hak Milik (HM), the highest land title in Indonesia. You might have to obtain certificates such as Hak Pakai (HP) and Hak Guna Bangunan.
This process allows you to rent your property, whether it’s a luxury villa for rent in Bali or a more affordable Bali villa for rent monthly, opening up opportunities for steady income through Bali long-term real estate rentals.
Rental yield and return on Bali long-term real estate rentals
Bali long-term real estate rentals can be highly profitable. The average rental yield on Bali villa rentals is 42.4%, while commercial properties have a rental yield of 44.5%. Land in Bali has a rental yield of 10.5%. The average return (ROI) on property in Bali falls between 12-20% per year. Learning more about the Bali villa costs is recommended to calculate your possible ROI and rental yield.
Valuable insights and practical advice, distilled from years of expertise and real-world experience.
Frequently Asked Questions (FAQs)
How much is the villa rent in Bali?
The cost of a villa for rent in Bali varies wildly, depending on the location and amenities. A luxury villa for rent in Bali, such as in Seminyak or Canggu, can cost around IDR 30 million ($1,890) to IDR 60 million ($3,780) monthly. A cheap villa for rent in Bali, in less touristy areas like Lovina or Umalas, may cost around IDR 8 million ($504) to IDR 25 million ($1,575) monthly.
Can a foreigner buy a house in Bali?
Technically, foreigners cannot buy a house in Bali. However, they can lease a property for up to 80 years or set up a foreign-owned company (PT PMA) to buy property, allowing them to invest in Bali long-term real estate rentals.
Can you make money renting villas in Bali?
Yes, you can make money renting villas in Bali. The key is to ensure a consistent occupancy rate, which can be achieved through Bali long-term real estate rentals, effective marketing strategies, and maintaining a high standard of service.
How to start a villa business in Bali?
Starting a villa business in Bali involves setting up a PT PMA, finding a suitable property, obtaining necessary licenses, hiring staff for cleaning and security, listing your villa on booking websites, promoting your villa, and managing the maintenance. Whether it’s a luxury villa or a cheap villa in Bali, attention to detail and proper management are crucial to your success in Bali long-term real estate rentals.
Is Airbnb profitable in Bali?
Yes, Airbnb can be a profitable platform for renting out your Bali villa for rent monthly or even short-term. Given Bali’s popularity as a tourist destination, platforms like Airbnb provide a broad reach. However, the profitability also depends on factors such as location, villa quality, and amenities.
Is it worth owning a villa in Bali?
Owning a villa in Bali, whether a luxury villa for rent in Bali or a Bali villa for rent monthly, can be a worthwhile investment, given the island’s appeal as a tourist destination. The potential returns from Bali long-term real estate rentals or short-term rentals can be high. However, it’s essential to consider the ongoing costs, such as maintenance, housekeeping, and potential periods of low occupancy.
Is Bali a good place to invest in property?
Bali is considered an excellent place to invest in property. The island’s reputation ensures a steady demand for properties like a villa for rent in Bali’s Seminyak or a long-term rental in Bali’s Canggu. With relatively low investment costs compared to many Western countries, Bali is a good place for property investment.
What is the rental yield in Bali?
The rental yield in Bali can vary significantly depending on the location, type of property, and management strategy. However, on average, a well-managed villa for rent in Bali long term or a Bali villa for rent monthly can yield anywhere from 8% to 10% annually.
What is the average return on a villa in Bali?
The average return on a villa in Bali depends on numerous factors such as location, villa condition, rental rates, and occupancy levels. However, Bali long-term real estate rentals, whether a luxury villa for rent in Bali or a cheaper option in less touristy areas, can yield an average return of about 42.4%.
