You’ve probably heard about the high returns on Bali property—some say they can reach up to 20% per year. These kinds of returns are, in fact, possible. But they don’t happen by chance.
With Bali’s growing tourism, limited land, and rising rental demand, it’s a hot spot for real estate investors. Still, you need to know the right investment strategies to make it work.
So, let’s dive into what drives these impressive ROI numbers and the tips to help you get the most from your own investment.
What is the Average ROI in Bali?
Bali offers strong returns for property investors. On average, the ROI (Return on Investment) in Bali ranges from 7% to 12% per year. For well-located villas, especially in tourist hotspots, returns can go up to 15%, and even 20% in premium areas.
Short-term villa rentals usually give a rental yield of 8% to 15%, while long-term leases offer around 6% to 10% per year. Areas like Canggu and Uluwatu also show strong land value growth, with prices increasing by up to 15% annually in some zones.
This high ROI is driven by Bali’s steady tourist numbers, growing popularity for events, and limited property supply.
Factors Affecting Bali Real Estate Yield and ROI
Understanding what drives maximum rental yield of property in Bali is the key to making a smart investment. Here’s a breakdown of the most important ones to watch.
Factor 1: The Tourism Boom
Bali isn’t just a beautiful island; it’s a global hotspot for travelers.
The constant influx of tourists creates a massive demand for short-term rentals, especially villas and holiday homes.
Source: Investment Legal Advisory (Rental growth in property Bali in the last three years)
In the first five months of 2024 alone, Bali welcomed approximately 2.39 million foreign tourists, marking a significant increase of 27.46% compared to the same period in 2023.
On average, more than 478,000 international visitors arrive each month, reflecting a robust recovery and growth in tourism.
Source: Bali Management Villas
The more tourists, the more opportunities for property owners to cash in through rental income.
And it’s not just about the sheer number of tourists; it’s also about the kind of tourists Bali attracts—many are willing to pay a premium for unique and luxurious accommodations.
For instance, frequent visitors from countries like Australia, India, and the United States seek out upscale villas and resorts, willing to pay more for quality and exclusivity.
This growing demand is helping maintain and even increase property values, ensuring a strong return on investment for property owners.
Factor 2: Strategic Location Selection
Now, while tourism is booming all over Bali, not all locations are created equal. This is where location matters.
High-yield investments are often found in popular areas like Seminyak, Canggu, and Uluwatu, where the demand for rental properties is sky-high.
Source: AirDNA (Occupancy rate in Bali in 2023)
These areas are tourist favorites and offer great infrastructure, vibrant nightlife, and beach proximity.
However, emerging areas like Seseh are gaining traction as investors look for the next big thing.
The key is to choose a location where demand is strong and likely to grow, ensuring your property doesn’t just sit empty.
Factor 3: Effective Property Management
Alright, you’ve got a great location, but how do you maximize those returns? This is where effective property management comes into play.
Professional property management isn’t just about keeping the place clean—it also involves optimizing occupancy rates, handling bookings efficiently, and ensuring guests have a seamless experience.
High occupancy rates directly translate into higher returns.
Source: Bukit Vista (Average occupancy rate in Canggu area)
Imagine your property being booked solid during peak seasons and maintaining a good rate during off-peak times. That’s the kind of performance you want, and it often takes a skilled management team to make it happen.
Here’s the rough estimation of expense for a 2-3 bedroom villa in Bali:
| Expense Category | Cost Range (annually/monthly) |
| Property Management | $200 – $500 per month |
| Maintenance | $100 – $300 per month |
| Utilities (Electricity, Water, Internet) | $150 – $250 per month |
| Insurance | $1,000 – $1,500 annually |
| Property taxes | $100 – $200 annually |
These costs can vary based on the location and services provided, but this table gives a solid overview of what you can expect as a foreign villa owner in Bali.
Factor 4: Value-Add Opportunities
When investing a property in Bali, boosting your returns often comes down to adding value. Renovations and upgrades—like a private pool, modern kitchen, or better landscaping—can increase both your property’s appeal and its rental income. These improvements not only raise the property’s value but also help you charge higher rent, leading to better rental yields and overall profitability.
But to understand how much these improvements can impact your investment, you need to look at the numbers—specifically, gross and net rental yield.
1. Gross rental yield
Gross Rental Yield is the annual rental income you expect to earn from your property, expressed as a percentage of the property’s purchase price.
How to Calculate Gross Rental Yield:
Example: Let’s say you buy a villa in Canggu for $300,000 and rent it out for $30,000 annually.
Your gross rental yield would be:
2. Net Rental Yield
It considers the costs of owning and maintaining the property, giving you a more accurate picture of your earnings.
How to Calculate Net Rental Yield:
Example: Using the same villa, suppose your annual expenses (property management, maintenance, insurance, etc.) amount to $6,000.
Your net rental yield would be:
Maximizing returns means choosing properties with high gross yields and managing costs effectively to ensure a strong net yield.
Focusing on net yield can help you better gauge how to maximize your returns, ensuring that your property is earning and growing in value over time.
Factor 5: Currency Advantages
As a foreign investor, the exchange rate between the Indonesian Rupiah (IDR) and your home currency can be favorable. When the IDR is weaker than major currencies like USD, EUR, or AUD, foreign investors get more value for their money.
For example, if the exchange rate favors your home currency, you can purchase a property in Bali at a relatively lower cost than in your home country.
This advantage extends to operational costs, where ongoing expenses such as maintenance, management fees, and taxes become more affordable, thus boosting your net rental yield and overall ROI.
However, it’s important to be mindful of currency fluctuations, as they can also introduce risks. Sudden changes in exchange rates can make it challenging to predict your financial outcomes, adding an element of uncertainty to your investment strategy.
A strong strategy might include timing investments when the exchange rate is favorable and considering hedging options to protect assets.
How to Maximize Your Bali Property Return (ROI)
1. Invest in a Good Location
Choose popular areas like Canggu, Seminyak, or Uluwatu where tourist demand is high. These areas tend to have better rental returns and land value growth.
2. Add Value with Upgrades
Renovations like adding a pool, updating the kitchen, or improving outdoor spaces can boost rental appeal and let you charge higher rates.
3. Offer Short-Term Rentals
Short-term rentals usually give higher returns than long-term leases, especially in tourist-heavy areas.
4. Hire a Professional Property Manager
A trusted manager helps with maintenance, guest services, and occupancy—keeping your property running smoothly and profitably.
5. Use Legal and Safe Ownership Structures
Avoid nominee setups. Instead, choose leasehold or set up a PT PMA to hold freehold legally. This protects your asset and keeps you compliant with Indonesian law.
6. Work with a Trusted Real Estate Agency
A reputable agent like Bali Villa Realty by Ilot Property can guide you to the right property, negotiate better terms, and help you avoid scams.
Conclusion
Are Bali villas profitable? Yes, absolutely. High property returns in Bali are achievable, however, it requires more than just buying a villa and hoping for the best.
Smart planning and market knowledge are key to making it work. But, if you’re new to investing or just don’t have time for deep research, we’re here to help.
Contact us today to explore the best options and get expert advice tailored to your investment goals.
