When you’re thinking about investing in a villa in Bali, one of the first big decisions you’ll face is whether to buy an existing property or build one from scratch.
It’s a choice that can feel overwhelming, especially considering all the factors—costs, time, customization, and potential risks.
But don’t worry; we’re here to break it down for you.
This guide will help you weigh the pros and cons of both options so you can make the best decision for your situation.
Let’s dive in!
9 Factors Before Deciding to Buy vs Build a Villa in Bali
Factor #1: Cost Comparison
Let’s dive into the key factors you need to consider—we’ll start by looking at one of the most significant aspects—cost.
Cost is often the first thing that comes to mind when deciding between buying and building. Let’s break down the expenses you can expect for both options.
Buying a Villa
1. Upfront Cost
- Buying an existing villa usually means one big upfront payment. This includes the purchase price, taxes, and maybe some renovation or customization costs.
- The costs are mostly fixed, so it’s easier to plan your budget.
- But keep in mind—you might pay more if the villa is in a prime location or already has a strong presence in the market.
2. Long-Term Financial Impact
- Buying a villa gives you a more predictable financial picture. You’ll know your costs upfront—after the purchase, your main expenses are maintenance and any upgrades.
- The best part? You can start earning rental income right away to help offset your investment.
Building a Villa
1. Upfront Cost
- You’ll need to buy land first—that’s an extra cost before construction even begins.
- Then comes the actual build: materials, labor, permits, and other fees.
- Costs vary a lot depending on your design, the quality of materials, and the contractors you choose.
- It might seem cheaper at first, but there are other expenses—like delays, price changes, or extra work needed along the way.
2. Long-Term Financial Impact
- Over time, you might save money—especially if you build using energy-efficient methods or low-maintenance materials.
- But the financial outcome can be less predictable due to those surprise costs.
- If you’re patient and want full control over the design, building can be a smart, cost-effective option.
The prices may vary depending on location, size, and design complexity, so use these figures as a general guide.
| Aspect | Buying a Villa | Building a Villa |
| Purchase Price | $200,000 – $1,000,000+ for an existing villa, depending on location and size (e.g., $300,000 for a 3-bedroom villa in Canggu) | Land cost: $50,000 – $500,000 (depending on location, e.g., $100,000 for a 10-are plot in Ubud) |
| Taxes and Legal Fees | 10% of purchase price (approx. $20,000 – $100,000) | Land acquisition tax: 5% of land value (approx. $2,500 – $25,000) |
| Construction Costs | Not applicable | $500 – $1,000 per square meter (e.g., $150,000 – $300,000 for a 200 sqm villa) |
| Permits and Licenses | Typically included in the purchase price | $5,000 – $10,000 (depending on complexity and location) |
| Customization/Renovation | $10,000 – $50,000 for minor upgrades or customization | Included in the construction costs, but additional custom features can increase costs |
| Total Upfront Cost | $230,000 – $1,150,000+ | $207,500 – $835,000+ (land + construction + permits) |
| Time to Completion | Immediate or within a few months | 12 – 24 months (depending on project scope and unforeseen delays) |
| Long-Term Financial Impact | More predictable; immediate rental income | Potentially higher ROI if building in an emerging area, but longer time to income generation |
Factor #2: Time Considerations
Time is another critical factor. How soon do you want to start enjoying your villa, or when do you want to start earning rental income?
Buying a Villa
- Great if you want to move in or rent it out quickly.
- The villa is ready, so you can start earning rental income right after the sale.
- Perfect for making the most of Bali’s peak tourist seasons.
Building a Villa
- Takes more time than you might expect.
- You’ll need to design, get permits, and go through construction—delays can happen due to weather, supplies, or red tape.
- Be ready for a longer wait before you can live in or rent out the property.
- Not in Bali? You’ll either need to travel often or hire someone local to manage the build.
Factor #3: Customization and Personalization
Let’s explore how much flexibility you’ll have to customize your villa.
Buying a Villa
- What you see is what you get—the layout and design are already done.
- You can renovate or upgrade, but there are limits if you have a specific vision.
- Not ideal if you want full creative control over your dream villa.
Building a Villa
- Total freedom to design the space exactly how you want.
- Work with architects to create your ideal style—modern, Balinese, or something unique.
- You can add custom features from the start, like open living areas, infinity pools, or eco-friendly materials.
Factor #4: Risk Assessment
Every investment comes with risks, and real estate is no exception. Let’s evaluate the challenges of buying and building a villa in Bali.
Buying a Villa
- You’re buying a property that’s already part of the local market.
- That means its value can go up or down based on market trends.
- Location and timing are key—make sure you know what the market looks like.
- Always get a thorough inspection from a trusted professional to avoid surprises.
Building a Villa
- Cost overruns
- Delays due to weather or supply chain issues
- The challenge of finding reliable contractors
- You’ll need to navigate local regulations, obtain the necessary permits, and ensure that your construction meets all legal requirements.
Navigating the legal landscape in Bali can be complex, especially for foreigners.
It is crucial to work with a legal advisor or local real estate agent who understands Indonesian property law and can help you secure the necessary permits and comply with all regulations.
Factor #5: Location and Land Availability
Location is critical in real estate, and Bali is no exception. Let’s explore how your choice of location might influence whether you buy or build.
Buying a Villa
- Many prime locations in Bali—like beachfront spots in tourist hubs—are already fully developed.
- If you have your heart set on a specific area, buying might be your only option.
- These areas usually have solid infrastructure, which makes them more convenient and attractive to renters.
Building a Villa
- Open to different locations? Building gives you the chance to buy land in up-and-coming areas.
- These spots can offer better long-term value as they grow and develop.
- But it’s not always easy—finding the right plot means considering things like road access, utilities, and the natural surroundings.
Factor #6: Maintenance and Management
Maintaining your villa is a long-term commitment. Let’s see how buying and building differ in this regard.
Buying a Villa
- Everything’s usually ready—just move in or start renting right away.
- Maintenance systems are already in place.
- Great choice if you want a hassle-free, ready-to-go investment.
Building a Villa
- You can reduce long-term maintenance costs by using new materials and smart design.
- Build it with low upkeep in mind—save money and effort down the line.
- Modern techniques can make your villa easier to manage over the years.
Whether you buy or build, hiring a property management company can be smart, mainly if you’re not based in Bali.
A good property manager can handle everything from maintenance to guest relations, ensuring that your villa remains in top condition and that your investment is well taken care of.
Factor #7: Resale Value
Buying a Villa
- A villa that’s already on the market can be easier to resell.
- It may come with a reputation, solid reviews, and a proven rental history.
- These factors can help attract future buyers and make the selling process faster and simpler.
Building a Villa
- A custom-built villa that matches modern tastes can sell for a higher price.
- Features like eco-friendly design, luxury finishes, or a great location can boost your resale value.
- If done right, building can lead to a strong return on investment when it’s time to sell.
Factor #8: Legal and Bureaucratic Considerations
Navigating legal processes in Bali can be complex. Let’s break down what you need to know about buying versus building.
Buying a Villa
- One big perk is that the legal work is mostly done.
- The villa is usually registered and already has the required permits.
- This can make the buying process smoother and way less stressful.
Building a Villa
- You’ll need to get several permits before you can start building.
- That includes zoning checks, plan approvals, and meeting local building rules.
- It can be complex, but a good notary and legal advisor will help you handle everything the right way.
Factor #9: Personal Preference and Goals
Ultimately, your decision may come down to personal preferences and goals.
- Are you looking for a quick, turnkey solution where you can start enjoying your property immediately?
- Or do you dream of creating a custom home that reflects your style and needs?
Consider how much time, effort, and involvement you will invest. Building could be rewarding if you have a clear vision and the patience to see it through.
Buying might be the better option if you prefer a more hands-off approach.
Here’s a table summarising the pros and cons of building vs. buying a villa in Bali:
| Aspect | Buying a Villa | Building a Villa |
| Ease of Process | The process is quicker; you can move in or rent out immediately | Building is time-consuming, with a complex process involving land acquisition, permits, and construction |
| Customization | Limited ability to alter the design; compromises may be needed | Complete flexibility to design the villa to your exact specifications |
| Costs | Fixed costs are easier to manage with clear investment totals | Potential for unexpected costs during construction; building expenses can fluctuate |
| Time to Completion | Immediate availability—no construction wait time | Building from scratch can take months or years, delaying move-in or rental income |
| Location Flexibility | Limited to existing properties, which might not be in your ideal location | More options for choosing land in emerging or preferred areas with growth potential |
| Resale Value | Established market presence and reputation, making resale easier. | Higher return on investment is possible with custom-built villas featuring in-demand elements |
| Legal and Bureaucratic Complexity | Legal aspects and permits are already handled | Requires navigating complex legal processes and obtaining permits, which can be challenging for foreigners |
| Maintenance and Management | Established maintenance systems are often included | New construction may lower initial maintenance costs with low-maintenance materials and systems |
| Risk | Risk of hidden issues that may incur extra costs | Construction delays, cost overruns, and legal challenges are risks in the building process |
| Investment Timing | You can start earning rental income right away | Construction delays can postpone rental income, making ROI timing uncertain |
How You Get Started
So, there you have it! Whether you’re leaning towards buying or building a villa, here’s how to start your journey in Bali.
For Buyers
If you decide to buy, start by defining your budget and researching the best areas in Bali.
1. Research and Planning
When buying a villa in Bali, it’s crucial to start with thorough research and planning. You’ll want to get a good grasp of the current real estate trends in Bali, especially in areas that are popular among expats.
This research should also include a clear budgeting plan that considers not only the cost of the property but also any additional expenses like taxes, legal fees, and potential renovation costs.
2. Legal Considerations
Understanding the legal landscape is another vital step. In Bali, expats opt for leasehold properties because the process is simple.
If you want to buy a freehold, you need to build a foreign-owned company or PT PMA, where there’s a specific price for how much you can buy a property.
3. Property Selection
Next, you’ll move on to selecting a property. It involves identifying properties that meet your location, size, amenities, and budget criteria.
4. Negotiation and Purchase
This is where you’ll make an offer and negotiate the terms of your agreement. Conducting thorough due diligence is critical to ensure the property is legal.
If you want help checking the legal documents, Bali Villa Realty will review all the documents you might need to ensure a smooth and legal investment.
5. Post-Purchase Activities
Depending on your agreement with the property owner, you can personalize or make slight renovations.
This could involve choosing the right furnishings to make the space your own. However, if you plan on renting the property, consider hiring a property management company to help with this process.
For Builders
If building is your choice, start by selecting a location and purchasing land.
1. Location
If you’re more interested in building a villa in Bali, start by studying the location, including zoning laws, building regulations, and nearby areas.
2. Acquire Land
The next step is to acquire the land. It’s crucial to have your lawyer or local agent perform due diligence to ensure the land is dispute-free and suitable for building.
3. Design and Permits
You’ll engage a reputable builder or architect in the design and permitting phase to bring your vision to life. Make sure to obtain all necessary building permits before starting the construction.
4. Construction
During the construction phase, monitor the process closely. If you need help supervising, hiring a project manager is a good option. In this step, managing your budget carefully is essential to avoid unexpected cost overruns.
5. Finalizing the Project
Once construction is complete, conduct a thorough inspection to ensure everything is up to standard. This is also the time to add personal touches through furnishing and decoration.
6. Legal and Regulatory Compliance
Lastly, ensuring that your new villa complies with all local regulations is essential, especially if you plan to rent it out.
So, What Should You Go For?
Buying might be better if you value time, convenience, and the ability to start enjoying or renting out your property immediately.
You get peace of mind from purchasing something built, inspected, and ready to go.
On the other hand, the building might be more fulfilling if you have a clear vision of your dream villa, enjoy customizing every detail, and are prepared to be patient through the construction process.
Plus, with careful planning, building can sometimes save you money in the long run.
Whatever path you choose, you must consider your personal goals, financial situation, and how much time and effort you will invest.
Don’t hesitate to seek professional advice, like Bali Villa Realty, who can tailor your planning to your specific needs—this decision is big, and you don’t have to make it alone.
If you want a personalized investment plan from our senior advisor, click the link below to book your free session.
