Due to the high ROI and rental yields for property in Bali, many foreign investors choose to buy a villa or land on the popular Indonesian island. Investing in Bali lands and villas can be lucrative, besides providing comfort. Bali’s increase in economic activities, with a growing number of tourists flocking to the island, makes Bali lands are ripe for investment. This article tells you more about the ROI and average rental yields for property in Bali and what you can expect when you make the big step.
Invest in Bali real estate
Bali is a popular destination for Indonesian nationals and foreigners who want to invest in real estate. Millions of tourists visit Bali every year and are all in need of holiday accommodation. Over the last years, more and more expats and digital nomads have chosen Bali as their place to stay, which opens doors for long-term property rentals.
The costs of buying land or a villa in Bali are lower than in many other countries, which can make buying real estate in Bali a lucrative investment.
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Return on Investment (ROI) on villas in Bali
Due to the reopening of tourism after the pandemic, the average property ROI in Bali falls between 12-20% per annum.
Calculate the ROI for Bali real estate
Calculating the ROI, you can determine the (possible) profit or gain on any investment. The ROI (Return on Investment) is a profitability rate that is represented in percentage and can be calculated with the formula:
For example, we have a villa that was bought for IDR 1.9 billion ($119,700) and five years later sold for IDR 3.2 billion ($201,600). The net profit is IDR 1.3 billion ($81,900), and so the ROI for this property is 68.4%.
Average rental yields for property in Bali
The average rental yield on residential properties in Bali is 42.4%. Commercial properties have a property rental yield in Bali of 44.5%, while lands are at a rate of 10.5%.
Do you want to calculate the rental yield for your villa in Bali? You can do so using our rental yield calculator for Bali property.
Rental yields in Bali vs. Jakarta
When it comes to profitability, Bali has, in general, better prospects than Jakarta, which is the capital city of Indonesia. That’s one of the reasons many real estate investors choose Bali over Jakarta, although there are several other reasons for that as well.
Bali villas have an average rental yield of 44.8%, with an expected annual growth of 40.2%. In comparison, Jakarta only has an expected rental yield of 29.9% and a negative annual growth. Besides that, real estate prices in Jakarta are way higher than in Bali, which makes the real estate market in Jakarta less accessible.
Property prices in Bali
Property costs play an important role in real estate investment. The property’s size, location, type, and building materials mainly decide the total costs. You can use our calculator to calculate the average cost of your dream villa in Bali. To aid your research, we have estimated prices that can serve as a construction cost reference for several properties.
| Villa type | Average price per m2 |
|---|---|
| Single villa | IDR 7.6 million ($479) |
| Multi-story villa | IDR 10.9 million ($687) to IDR 12.4 million ($781) |
| Villa with luxury materials (e.g., wood and marble) | IDR 22.9 million ($1,443) |
| Villa with swimming pool | Villa type cost + IDR 2 million ($126) per m2 of the pool |
How to start villa rentals in Bali?
Foreigners who wish to buy or rent out property in Bali can do so through a PT PMA, which is a foreign-owned company. However, it’s important to note that foreigners cannot buy and own freehold land or property in Indonesia through the most powerful land title, which is known as Hak Milik (HM). Only Indonesian nationals and legal entities have the right to do so.
With a PT PMA, foreigners can purchase freehold or leasehold real estate. Once the land is acquired, they can build a villa with the Hak Guna Bangunan (HGB) title. Before renting out the villa, it is essential to obtain specific certificates that allow villa rentals, such as Pondok Wisata.
Invest in Bali property with Own Property Abroad
Do you want to invest in Bali property? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience in Bali, 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 of the Balinese real estate market alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected]. Let’s start working on your property success story today!
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Conclusion
Buying Bali real estate can be a profitable investment. Many tourists visit Bali and are all looking for a place to stay during their holiday. Renting out a villa is a great way to benefit from the increasing number of tourists. The rental yields and ROI are desirable, and with the low entry costs, investing in Bali can be lucrative.
Frequently Asked Questions (FAQs)
Is it worth buying property in Bali?
Buying property in Bali can be worth it, as Bali offers great investment possibilities for those seeking to invest in foreign real estate. Bali is seen as the world’s best holiday destination, with rising tourists visiting the island annually. Buying property in Bali is worth it if the investment is done correctly.
Where should I buy property in Bali?
Where you should buy property in Bali depends on the goal of the property. If you want to use the property for personal use and prefer a quiet area, purchase property in the north or east of Bali, such as Lovina, Amed, or Uluwatu. If you rent the property to tourists, you can buy property in popular tourist destinations such as Canggu, Seminyak, Ubud, or Sanur.
How much does it cost to buy property in Bali?
The costs of buying property in Bali depend on the property’s location, type, size, style, and building materials. The average price of a single villa is around IDR 7.6 million ($479) per square meter.
2 Responses
hi, I would like to ask, how to apply for the proper title for a property when earning ROI with it. I want a property to buy and still don’t know how to get the right title
Hi Dian,
When you want to earn money with property rentals in Bali, the land titles you need depend on how you buy the property. You might have to obtain land titles such as Hak Sewa with freehold. When you buy it through a leasehold agreement, you don’t need to apply for a land title, but you must be aware of the different rental income taxes you must pay. You read more about these taxes in this article:
https://ownpropertyabroad.com/indonesia/rental-taxes-for-property/
I hope this helps. Good luck!
^ Matt