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Bali real estate investment: 7 important questions to start investing in Bali

bali real estate investment

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Bali is not only a popular tourist destination but has also become a hub for real estate investors. Bali real estate investment has become increasingly popular, offering a unique opportunity for those seeking to diversify their portfolio in a beautiful location. However, before investing in Bali, it’s crucial to have answers to seven critical questions.

Can foreigners buy real estate in Bali?

Yes, foreigners can buy real estate in Bali, but they must adhere to Indonesian rules on foreign property ownership. Here are the ways to buy property for Bali real estate investment:

  • PT PMA: Foreigners who invest in property in Indonesia often choose to set up a PT PMA company, providing them with greater control and legal rights over their property. However, setting up a PT PMA requires compliance with complex Indonesian corporate laws and regulations.
  • Leasehold: Many foreigners prefer to opt for leasehold agreements, which allow them to lease a property for a certain period, usually up to 30 years. This method is advantageous as it offers more flexibility and lower upfront costs than owning a property.
  • Hak Pakai: Foreigners can buy property in Bali with a Hak Pakai title for residential purposes. This title is valid for 25 years and can be renewed, but does not allow renting out.
  • Hak Guna Bangunan: Foreigners can own buildings (not land) for up to 30 years with a Hak Guna Bangunan title, extendable up to 80 years. It is popular for commercial and personal property development, but land ownership remains with Indonesians, like leasehold.
  • Buy with passport: Directly using a passport involves buying property under the foreigner’s name, but it’s subject to certain restrictions and often not recommended due to legal complexities.
  • Indonesian nominee: Foreign property buyers in Indonesia often use an Indonesian nominee who holds the property title on their behalf. However, this method carries significant risks as Indonesian law does not recognize or protect such agreements.

What is the best type of real estate to buy?

Several property types are suitable for a Bali property investment. However, it’s essential to know that almost no condos or apartments exist. Most tourists and investors seek villas, making them the most sought-after real estate investment type. Villas offer privacy, luxury, and the authentic Balinese experience that many tourists and expats desire, which makes them ideal for Bali real estate investment.

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Is buying real estate in Bali a good investment?

Investing in Bali real estate can be highly beneficial. The island’s popularity as a tourist destination ensures a steady demand for rental properties. The government expects the number of tourists to increase over the following years, which makes Bali a perfect destination for real estate investment. Additionally, Bali offers a serene and culturally rich environment, making buying real estate in Bali a possible good investment.

What is the best location in Bali to buy real estate?

When investing in real estate in Bali, it is essential to consider your location options carefully. Each area in Bali provides a distinct combination of culture, scenery, and Bali real estate investment opportunities that cater to various preferences and budgets. To make an informed decision, research the following locations for Bali real estate investment:

  • Canggu: Currently the most popular location in Bali to buy real estate, but also the most expensive.
  • Sanur, Kuta, and Seminyak: Long-time popular areas with many tourists and real estate opportunities, but real estate in these areas is pricey.
  • Uluwatu: An emerging market with potential, as more tourists visit Uluwatu and property prices are lower than in many other locations, such as Canggu.
  • Tumbak Bayu, Amed, Lovina, and Singaraja: These areas in Bali are gaining popularity, and property investors can still find real estate at low prices.
  • Nusa Lembongan: An attractive option for investors, as it’s gaining popularity from tourists and has low real estate prices compared to many other locations.
  • Ubud: It has always been a favorite for its cultural and serene environment, with many tourists visiting Ubud, offering real estate investors opportunities.

Understanding each area’s character and future prospects can significantly impact the success of your Bali real estate investment.

How much does real estate in Bali cost?

Real estate in Bali has an average price of IDR 2.6 billion ($158,600). However, the real estate costs in Bali vary widely depending on location, property type, and amenities. These are the average real estate prices in Bali for four popular destinations:

  • Singaraja: IDR 500 million ($30,500)
  • Canggu: IDR 4.3 billion ($262,300)
  • Seminyak: IDR 3 billion ($183,000)
  • Ubud: IDR 2 billion ($122,000)

Understanding the property market and price trends is essential to make an informed Bali real estate investment.

What are the biggest pitfalls to avoid when investing in Bali?

Investing in Bali real estate comes with its set of challenges and pitfalls. Being aware of these can save investors from costly mistakes and legal issues. These are the most common pitfalls regarding Bali real estate investment which you should avoid:

  • Legal compliance: Indonesia has specific laws regarding foreign property ownership, which are complex to understand. Ensure all legal aspects are clear and compliant before investing in Bali.
  • Overpaying: Some property owners try to use the ignorance of new investors, so always research the market prices to avoid overpaying for properties in Bali.
  • Ignoring local regulations: Understanding and respecting local rules and regulations is important to ensure a safe and secure long-term Bali real estate investment.
  • Neglecting due diligence: There are several real estate scams in Bali, so always conduct thorough real estate due diligence before you start investing in Bali real estate.

How to find real estate for sale in Bali?

Finding real estate for sale in Bali may seem complicated, but there are several ways to find property. One way is to use property platforms such as Own Property Abroad, which offer a range of real estate listings and valuable information.

Working with a local real estate agent who can provide insights and access to local listings is always a good idea. In Bali, many property owners offer their properties through word-of-mouth. It can be beneficial to network in Bali, drive around, and ask people if there is any property or land for sale.

Bali real estate investment with Own Property Abroad

Do you want to start a Bali real estate investment? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience, we can help with legal requirements, finding properties, negotiating the best deals, and conducting due diligence.

With our expert team, you won’t have to navigate the complexities alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected].

Get help with your Bali real estate investment

Leave your name and email below – We will reach out to assist you with buying property in Bali.

Frequently Asked Questions (FAQs)

Is owning a villa in Bali profitable?

Owning a villa in Bali can be profitable. Bali property investment, especially in villas, offers high rental yields due to the island’s popularity as a tourist destination. With proper management and strategic location choices, villa owners can enjoy significant investment returns.

Can I buy real estate in Bali?

Foreigners can buy real estate in Bali through various methods such as leasehold agreements, setting up a PT PMA (foreign-owned company), or using the Hak Pakai title. Each method has its own legalities and benefits, making Bali real estate investment accessible to international investors.

What is the best Bali real estate investment?

The best Bali real estate investment largely depends on individual goals and preferences. However, investing in villas in popular tourist areas like Canggu, Seminyak, or Ubud is often considered highly beneficial. These areas offer strong potential for rental income and property value appreciation.

Is a Bali property investment smart?

Bali property investment can be a smart choice. The island’s growing tourism industry and the increasing demand for rental properties make it an attractive market for investors. With the right location and property type, Bali real estate investment can offer lucrative returns and long-term growth potential.

Your guide to buying property in Bali

Written by Matt Timmermans

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Your guide to buying property in Bali

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