Investing in real estate in Bali has long been very trendy among foreigners. This is also not surprising, because the island of Bali, the size of just two islands, continues to be one of the most popular tourist destinations in the world and the local real estate market is very active. Real estate is bought here by many entrepreneurs and teleworkers who do not have to spend time in a physical office in their home country for permanent residence.
Solvent pensioners who want to spend their old age on the island of paradise also contribute to the real estate market. Of course, there is also no shortage of superricades in this market, for whom owning a villa in Bali is just another home in many different countries. The active real estate market has also attracted many new players who are professional real estate investors and developers.
While real estate in Bali offers great opportunities and tempting returns, as always, every investment involves risks. We bring you some important points that are worth paying attention to.
Is it worth buying a property in Bali?
Bali is an amazing place to buy real estate, either as a second home or as an investment, because it is a wonderful place to live and is full of untapped potential and plenty of profitable opportunities. TripAdvisor has already named Bali the best destination in the world several times, and already in 2019 Bali was named by Forbes as the 4th best place in the world to live and invest.
One of the advantages of investing in Bali, in addition to the high profit potential and the high demand for vacation rentals, is that foreigners can invest without Indonesian citizenship - it is much easier than it seems.
Villas are excellent investments because the average rental yield in Bali is 15-40% per annum, depending on the location and type of investment.
Where should I buy real estate in Bali?
First you need to determine your goal. Do you buy real estate for investing, living, or both? If you are planning to settle down, consider buying villas for sale in Umala or Canggu district. They are very popular among foreigners thanks to international schools, banks, gyms, medical centers and supermarkets, which are easily accessible. Villas in Ubud or Sanur are a great choice for retirement, as the area offers a more mature atmosphere and the same accessibility. If you want a truly breathtaking view that is not comparable anywhere else, buy a property in the Uluwatu area where you can enjoy the ocean view from the top of the mountain.
If you focus solely on investments for quick returns, then you may want to consider buying a property in Seminyak, Canggu or Pererenan, where renting villas is very profitable. For a balanced combination of living and investing, Berawa offers the best of both worlds as it is the most desirable neighborhood in Bali and the villa rental market is booming. Villas for sale in Berawa are in great demand because they are located close to beaches, beach clubs, schools, restaurants and many other attractions, which in turn allows them to charge a higher rental price than in the surrounding areas.
What type of property should I buy?
Which real estate to invest in is everyone's personal preference according to purpose, wallet and risk tolerance. Just like in the rest of the world, the investor earns the highest profit from the valorization of real estate. Therefore, the earlier you enter a real estate project, the higher the rate of return.
If the goal is to maximize profits, then it is worth investing in land or early-stage real estate development. The latter is often referred to here as off-plan development, in other words, an object that has not begun to be built or whose construction activity is in the early stages is sold on paper. In this way, it is possible to buy real estate at a significantly lower price and have a say in the planning and other details. If we talk about the return on equity, then an early investor will make a profit of 50% or even more in 10-12 months. Buying real estate on paper is riskier compared to buying a ready-made villa, so it is very important to choose for yourself a reliable broker or developer.
If the goal is to quickly start earning passive income, then it is worth considering buying a ready-made villa, for which you can immediately start earning rental income. The returns on real estate in Bali are fatter than in Estonia. The returns on cash flow items are 12-20%, depending on the location, object and management team. Higher returns are usually offered by short-term rentals, either by day or by month. At the same time, renting out for a year or more is also common. One big difference with the Estonian real estate market is that the rent is always paid in advance for the period. Therefore, long-term rental is also very attractive for an investor, because you can receive several years of rental income instantly in your bank account. Which strategy to choose depends on the details, and we will help you figure out a more detailed plan together.
If the goal is to buy a permanent home, then you can do both - either develop your dream home yourself or buy a ready-made villa. Both have their pros and cons.
Whether you decide to invest in real estate at the initial stage of the project or in an already finished product, the key to a successful transaction will be a reliable cooperation partner who will take care of the legality of the transaction and the implementation of a successful strategy.
How much does it cost to buy a property in Bali?
Real estate prices in Bali vary depending on the location, type of property, size, condition, proximity to the beach or tourist attractions, and other factors. However, it can be said that real estate prices are rather affordable, and there is a choice for any budget.
Compared to Bali, Estonian real estate prices are at times downright sci-fi. In Bali, you can buy a new 2-bedroom villa for the same money, which in Estonia you have to content yourself with with an apartment in Õismäe. The prices of villas start from about 150,000 euros, and more than a million euros have to be paid for luxury villas by the sea. If the budget is smaller, then perhaps you should look at an apartment in a new development instead. The prices of apartments are between 60,000-150,000 euros.
How to buy a property in Bali?
Buying real estate in Bali is easy and safe if you have found a reliable and professional partner. Indonesia's legal system is very different, and appropriate legal advice is a prerequisite for a successful transaction.
Avoid buying real estate from dubious sources and with vague agreements. It is important to pay attention to whether the seller of real estate has the right to transfer the property to you. Foreigners only have the right to rent real estate in Indonesia as a private person. We recommend that you set up a local business in Indonesia that will give you more rights, better legal protection, and greater opportunities to operate in the market.
If you want to know more, feel free to contact us and we will explain the whole process in more detail: info@investlandbali.com
