Buying vs Building Villa in Bali: 9 Key Factors to Consider

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!

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9 Factors Before Deciding Buying vs Building Villa in Bali

Let’s dive into the key factors you need to consider—we’ll start by looking at one of the most significant aspects—cost.

Factor #1: Cost Comparison

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 

    Purchasing an existing villa means dealing with a single, often substantial, upfront cost that includes the purchase price, taxes, and possibly some immediate renovation or customization expenses. 

    These costs are generally fixed, making it easier to budget. 

    However, you might pay a premium for a prime location or villa already established in the market.

    2. Long-Term Financial Impact

      The financial impact of buying a villa is more predictable. 

      You have a clear picture of the costs involved. Once you’ve made the purchase, the main expenses are maintenance and any upgrades you make. 

      Plus, you can start earning rental income right away, which can help offset your investment.

      > Building a Villa

      1. Upfront Cost 

        On the other hand, building a villa requires buying land first, which is an additional cost. 

        Then there’s the construction, which involves paying for materials, labor, permits, and more. 

        Costs can vary widely depending on the quality of materials you choose, the contractors you hire, and the complexity of your design. 

        While it might seem cheaper initially, budgeting for unexpected expenses like delays, material price fluctuations, or additional construction needs is crucial.

        2. Long-Term Financial Impact

          With building, you might save money over the long term, especially if you use modern construction techniques that reduce maintenance needs or increase energy efficiency. 

          However, the risk of unexpected costs can make the financial impact less predictable. 

          Building can be a cost-effective way to get exactly what you want if you’re patient and willing to invest the time.

          Here’s a table comparing buying costs versus building a villa in Bali. 

          The prices may vary depending on location, size, and design complexity, so use these figures as a general guide.

          Aspect Buying a VillaBuilding 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 Fees10% of purchase price (approx. $20,000 – $100,000)Land acquisition tax: 5% of land value (approx. $2,500 – $25,000)
          Construction CostsNot applicable$500 – $1,000 per square meter (e.g., $150,000 – $300,000 for a 200 sqm villa)
          Permits and LicensesTypically included in the purchase price$5,000 – $10,000 (depending on complexity and location)
          Customization/Renovation$10,000 – $50,000 for minor upgrades or customizationIncluded 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 CompletionImmediate or within a few months12 – 24 months (depending on project scope and unforeseen delays)
          Long-Term Financial ImpactMore predictable; immediate rental incomePotentially higher ROI if building in an emerging area, but longer time to income generation

          Factor #2: Time Considerations

          Time is another critical factor that could sway your decision. 

          How soon do you want to start enjoying your villa, or when do you want to start earning rental income?

          > Buying a Villa

          Buying is the way to go if you want to move in or rent your property quickly. 

          The villa is already built, so you can move in or generate rental income immediately once the sale is finalized. 

          This can be especially beneficial if you’re looking to capitalize on Bali’s peak tourist seasons.

          > Building a Villa

          Building a villa takes time—often much more time than anticipated.

          The process includes designing the villa, obtaining the necessary permits, and going through the actual construction, which weather, supply issues, or bureaucratic red tape can delay. 

          If you’re planning to build, you must be prepared for a longer timeline before you can enjoy or rent out your property.

          And if you’re not based in Bali, this can mean frequent trips or hiring someone local to oversee the project on your behalf.

          Factor #3: Customization and Personalization

          Are you someone who loves to put your stamp on things? Let’s explore how much flexibility you’ll have to customize your villa.

          > Buying a Villa

          When you buy a pre-built villa, what you see is essentially what you get. 

          While there may be opportunities for renovations or upgrades, the basic layout and design are already in place. This can be limiting if you have a specific vision for your dream villa.

          > Building a Villa

          Building a villa gives you the ultimate flexibility in design and layout. 

          You can work with architects and designers to create a space ideally suited to your needs, whether a modern minimalist style, a traditional Balinese look, or something unique. 

          This is your chance to incorporate features like open-plan living spaces, infinity pools, or eco-friendly materials right from the start.

          Factor #4: Risk Assessment

          Every investment comes with risks, and real estate is no exception. Let’s evaluate the risks of buying and building a villa in Bali.

          > Buying a Villa


          Source: 3-bedroom villa in Canggu

          When you buy an existing villa, you’re investing in a property already part of the local real estate market. 

          This means you’re subject to market fluctuations that can affect the value of your property. 

          When purchasing, it’s essential to consider the location and the market’s current state.

          There’s also the risk of hidden problems with the property, such as structural issues or non-compliance with local regulations. 

          A thorough inspection by a qualified professional can help mitigate this risk, but it’s still something to be aware of.

          > Building a Villa

          Building comes with its own set of risks. There’s always the possibility of:

          • 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.


          Source: 5-bedroom villa in Umalas

          > Buying a Villa

          Many of Bali’s most desirable locations, such as beachfront villas in established tourist areas, are already developed. 

          Buying might be your only option if you’re set on a specific location. These areas often have established infrastructure, making them convenient and appealing to renters.

          > Building a Villa

          If you’re open to exploring different areas, building your villa can allow you to purchase land in an up-and-coming location. 

          Emerging areas might offer better long-term value and potential for appreciation as they develop. 

          However, finding the perfect plot of land can be challenging, and factors like accessibility, utilities, and the local environment should be considered.

          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 is usually set up and ready to go when you buy a villa. 

          Maintenance systems are in place, and you can immediately start renting or enjoying the property. 

          This can be a big advantage if you want a hassle-free investment.

          > Building a Villa

          Building a new villa can reduce maintenance costs in the long run. 

          New materials and modern construction techniques can minimize the need for repairs, and you can design the villa to have as little maintenance as possible. 

          This can save you money and reduce the time and effort needed to keep the property in good condition.

          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

          Thinking about the future? Let’s discuss how buying versus building can affect the resale value of your property.

          > Buying a Villa

          An existing villa already known in the market can be easier to resell. I

          t may have a reputation, customer reviews, and a rental income history that can attract future buyers, making selling the property quicker and more straightforward.

          > Building a Villa

          A custom-built villa designed to meet modern tastes and standards can command a higher price when it is sold. 

          If you’ve incorporated features in demand, like eco-friendly design, high-end finishes, or a prime location, you could see a significant return on your investment.

          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.


          Source: 3-bedroom villa in the heart of Seminyak

          > Buying a Villa

          One advantage of buying an existing villa is that many legal aspects have already been handled. 

          The property is likely already registered, and the necessary permits are in place, which can make the transaction simpler and less stressful.

          > Building a Villa

          Building a villa requires obtaining several permits from local authorities, which can be complex. 

          You’ll need to ensure that the land is zoned for your intended use, that your building plans comply with local regulations, and that you have all the necessary approvals before construction begins. 

          Working with a good notary and legal advisor is essential to navigating these challenges and ensuring the smooth completion of your project.

          Factor #9: Personal Preference and Goals

          Ultimately, your decision may come down to personal preferences and goals. 

          1. Are you looking for a quick, turnkey solution where you can start enjoying your property immediately…
          1. 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 outlining the pros and cons of building vs. buying a villa in Bali:

          Aspect Buying a VillaBuilding a Villa
          Ease of ProcessThe process is quicker; you can move in or rent out immediatelyBuilding is time-consuming, with a complex process involving land acquisition, permits, and construction
          CustomizationLimited ability to alter the design; compromises may be neededComplete flexibility to design the villa to your exact specifications
          CostsFixed costs are easier to manage with clear investment totalsPotential for unexpected costs during construction; building expenses can fluctuate
          Time to CompletionImmediate availability—no construction wait timeBuilding from scratch can take months or years, delaying move-in or rental income
          Location FlexibilityLimited to existing properties, which might not be in your ideal locationMore options for choosing land in emerging or preferred areas with growth potential
          Resale ValueEstablished market presence and reputation, making resale easier.Higher return on investment is possible with custom-built villas featuring in-demand elements
          Legal and Bureaucratic ComplexityLegal aspects and permits are already handledRequires navigating complex legal processes and obtaining permits, which can be challenging for foreigners
          Maintenance and ManagementEstablished maintenance systems are often includedNew construction may lower initial maintenance costs with low-maintenance materials and systems
          RiskRisk of hidden issues that may incur extra costsConstruction delays, cost overruns, and legal challenges are risks in the building process
          Investment TimingYou can start earning rental income right awayConstruction delays can postpone rental income, making ROI timing uncertain

          Which One Is Cheaper: Buying or Building?

          So, which option is more cost-effective? Whether buying or building a villa in Bali is cheaper depends on several factors. 


          Source: 2-bedroom villa in Canggu

          1. Buying a villa 

            Often, it has a higher upfront cost, but it can be more predictable since you know what you’re paying for and can start generating rental income immediately. 

            2. Building a villa 

              It might seem cheaper initially because you have control over the budget and can tailor the construction to your financial limits. 

              However, buildings can have unexpected costs, such as construction delays, material price increases, or the need for additional permits.

              How You Get Started

              Ready to take the next step? Whether you’re leaning towards buying or building a villa, here’s how to start your journey in Bali.


              Source: Brand-new majestic villa in Umalas

              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.

                    Visiting these properties in person is essential to evaluate their condition and neighborhood. Ensure that the property is close to what you need. Is it close to the beach, school, or even shops? 

                    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. 

                        Hire an experienced architect and builder who understands the local market. Get all necessary permits and be prepared for a time-consuming but rewarding process.

                        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.

                                    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. 

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