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Buying a Bali Property for Holiday Rentals

The holiday rental market can achieve very good returns, but it does have some aspects that need to be taken into consideration.

You will need something called a Pondok Wisata license. This entitles you to conduct a legitimate business in the holiday rental space. However, the areas that this is allowed are limited to “Tourism Zones” only.

Holiday rental business will generally cost more because of their prime locations in the “Tourism Zones” and some owners of these properties will be wanting to up-sell future profits and therefore charge higher prices. In that sense it’s just like buying/selling a business.

Management, maintenance and promotion can be handled by dedicated management companies in Bali but be they will expect a large part of the revenue generated.

If that doesn’t appeal, the other option is to self manage, maintain and promote.

Buying a Bali Property for Yearly Rentals

The yearly rental market can also achieve strong returns although these will usually be a little less then a holiday rental villa.

Although there are some big advantages of acquiring a yearly rental villa;

• It will cost less to invest because it isn’t necessary to have a Pondok Wisata license.
• You have a much wider area to choose from because the villa doesn’t need to be in a designated “Tourism Zone”.
• The rent is paid upfront on a yearly basis and there are no general monthly costs.
• Every year there is a growing population of expats moving to Bali, which leads to a growing demand for good quality yearly rentals.

Investing in Bali Property

Ownership structures in Indonesia state that foreigners are not allowed to directly own a property on a freehold title.

But there are ways that you can  buy a freehold property and begin investing in Bali property. The most common forms are:

1.  Through setting up a fully foreign owned company (PMA) which then acquires the property. This is called an HGB structure and allows you to have the property for 70 years. During this time you can resell it on a freehold basis again.
2. Acquiring a work permit for Indonesia (KITAS) and acquiring a property under a HAK Pakai structure, which also allows you to have the property for 70 years and in that time you can resell it on a freehold basis again.

It’s important to note here that properties with Hak Pakai titles can only be used for yearly rentals.

When it comes to returns, a freehold/HGB/Hak Pakai property should attain an ROI of around 8%, which includes capital appreciation of the land.

With leasehold properties the ROI should really be around 10-12% as a starting point.

For taxes you should count on paying at least 10% on the profit generated.

Bali Legals can assist with all the property documents and legalities.

Contact us to discuss your requirements.

Here’s a recently completed project with full furniture fit out too.

This is the Outside Corner Organic Cafe.

 

Do you want to build in Bali?

Bali Legals Building is an Australian owned construction company operating on the island of Bali. With our highly skilled management team and backroom staff we are able to build a property in Bali, of any size project on the island that’s desired.

With our extensive network of quality subcontractors, we are able to supply a significant chain value for our clients.
From concept to construction our team at BLB are committed to leading through excellence to ensure our clients vision becomes reality.

Contact us to discuss your construction requirements.

Connect with our Bali Legals Building Facebook page.

People move countries for many reasons. Sometimes for family, sometimes due to work commitments.

However there are many more reasons why people choose to settle in Bali.

Below are the top 10 Reasons To Move To Bali.

 

1. The Beaches

   

   Bali has incredible beauty and spectacular coastal landscapes with amazing beaches that resemble paradise. What’s particularly special about Bali’s beaches is the sheer variety of them. It’s not just white powdery sands flanking calm turquoise lagoons, there’s also black-sanded coves that are as striking as they are seductive. In Bali, every beach has its own character and atmosphere, there’s beaches for surfers (some of the world’s best!), beaches for families, secret beaches for escape artists and beaches with every modern facility at hand (facing resorts, restaurants, shops).

2. The Temples

   

   Bali is home to many beautiful temples. Some of these have become some of the country’s most recognised landmarks and are magnificently set against the most scenic backdrops. Whilst most Bali temples might be centuries-old, they come to life with daily flower offerings, ornate decorations, lively processions and seasonal festivities. They present an amazing spiritual experience no visitor ever forgets!

3. The Natural Riches

   

   There are many natural wonders to feast your eyes on in Bali. Its verdant highlands make for a photographer’s dream, as do its photogenic waterfalls and lakes, the expanses of emerald paddies and the glorious sunsets and sunrises to be admired from the coastline. Natural beauty abounds and surprises.

4. The Weather

   

   Bali enjoys 12 to 13 hours of sunshine each day, regardless of the time of year which gives visitors plenty of time to indulge in outdoor activities. Warmth is also a guarantee, with temperatures ranging between 26 and 31 degrees Celsius throughout the year. It does rain between October and April, but these are intermittent showers, after which the sun always comes out.

5. The People

   

   Balinese hospitality is at the core of the island’s charm. In Bali locals are friendly, spiritual and inspiring. Their simple way of life is coloured by daily rituals and festivities and getting to know the islanders is far easier than in many other popular holiday destinations around the world.

6. The Food

   

   The rich local fare uses variety of spices with fresh vegetables, fish and meat. If, after a full culinary immersion in Balinese delights, you have a craving for flavours closer to home, then international options at most Balinese restaurants certainly won’t disappoint. Some of the world’s best restaurants are based in Bali.

7. The Culture

   

   Bali’s culture is intricately webbed into the way everyone does everything here. Culture marks the pace of life, sets the natural rhythm and inspires the way things are done. Everything revolves around ancient rituals, long-held beliefs and frequent festivities, one of which you’re more than likely to come across during your visit. Temples celebrate anniversaries once in every six Gregorian months as per the 210-day Balinese calendar, so there’s plenty of opportunities to catch a live celebration. With fruit offerings, decorated shrines and spiritual dances, you’ll fully get to submerge in the island’s fascinating culture.

8. Value for Money

   

   One way air tickets can be bought for under $100 from Darwin or around $200 from Sydney, Melbourne & Perth. Indonesia led the rankings as the cheapest Asia-Pacific destination in a recent study by Cheapflights, with return fares averaging $528, down $60 from last year.

   Accommodation wise, there’s more choices than ever which helps keep rates low. For a budget of about $50 a night, you can still get very decent accommodation. One of the world’s top-rated hotels according to TripAdvisor, Tegal Sari, in Bali’s cultural centre of Ubud, averages about $74 a night.

9. The Accommodation

   

   You will never go wanting when it comes to variety of hotels, lodges and apartments in Bali. The oversupply of accomodation is great news for the traveller from a price standpoint, as this often results in price wars. In Bali, you’ll find a place for every pocket.

10. The Art Scene

    

    Bali is swamped in creativity that no other destination can match, and this creativity results in unique art pieces. Everywhere you turn in Bali, you’ll find art, whether in the form of a humble floral arrangement to more elaborate wood and stone carvings, intricate mambo structures and a variety of art-dedicated shops exhibiting a host of exclusively handmade artworks. You’ll find that in Bali, art is a way of life.

 

To discuss your visa or legal documentation requirements please contact us.