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What are the criteria for finding a great Bali villa? How do you know if you’re making the right choice? What if you pick the wrong location, overpay, or overlook something important?
Do they sound familiar? Don’t worry—you’re not alone.
That’s exactly why this guide is here—to walk you through the key criteria for finding a villa that fits your needs and generates steady rental income.
By the end, you’ll feel confident, knowing exactly how to pick a villa that gets great returns.
Let’s dive in!
Criteria #1: More Than Just Tourist Hotspots
In Bali, location is everything when generating strong rental returns. But it’s not just about picking a spot near the beach or cafes.
A great Bali villa’s success depends on how well it matches your renters’ desires and whether it’s located in a high-demand area with year-round appeal.
Consider these key factors:
- Close to Tourist Hotspots
Areas like Seminyak, Canggu, and Uluwatu are always in demand because they offer easy access to beaches, restaurants, and attractions.
Renters want to be close to the action, and these popular areas ensure that your villa is fully booked during peak seasons. - Off the Beaten Path
While proximity to attractions is important, villas slightly removed from the main tourist centers, like Pererenan or Kedungu (Read–Discover Bali’s New Hotspot for Rapid Growth), can offer guests a peaceful retreat without sacrificing accessibility.
This balance between peace and convenience makes these locations attractive to vacationers and expats looking for a great Bali villa experience.
Criteria #2: Supply and Demand Dynamics in Bali
Supply and demand play a huge role in determining how well your villa will perform as a rental property when buying a villa in Bali- especially in a hot spot like Bali.
But what does that really mean?
Less competition = higher demand.
If fewer villas are available but many people want to rent in that area, your villa will be more attractive to potential renters.
In some areas, like Seminyak, the villa market is already well-established, and there’s a lot of competition because so many people offer similar properties.
However, investing in the right villa with standout features can still earn great returns.
Emerging areas like Pererenan, Seseh, or Tumbak Bayuh offer great opportunities, as fewer villas are on the market, making your Bali villa even more desirable.
This can work in your favor when demand is high, and supply is lower, allowing you to command higher rental rates and enjoy more consistent bookings.
Criteria #3: Rental Vacancy Rates
Vacancy rate refers to the percentage of all available rental properties in an area that are vacant or unoccupied at a given time.
It’s a crucial metric for investors because it directly impacts how often their property will be rented out and generate income.
- A low vacancy rate means most properties in that area are rented out, indicating strong renter demand.
- A high vacancy rate suggests that many properties are sitting empty, meaning demand is weak, and it could be harder for you to keep your villa booked.
Why do low vacancy rates matter for rental income?
If you buy a villa in Bali in an area with a low vacancy rate (typically below 2%), it means there’s a high demand for rental properties, and your villa is likely to be occupied more often.
Conversely, if you invest in an area with a high vacancy rate (over 3%), many properties compete for the same renters.
This oversupply can force you to lower your rental prices to attract tenants.
Let’s say you own a villa in Canggu. The vacancy rate is low in that area, meaning most villas are fully rented.
Now, compare that with an area with a high vacancy rate, like in some overbuilt parts of Kuta or Legian, where there’s an abundance of villas but not enough renters to fill them all…
This oversupply creates competition among villa owners, forcing them to lower their rental rates to attract tenants.
So, when choosing where to invest in Bali, aim for areas with low vacancy rates because they signal strong rental demand, steady income, and the ability to charge higher rental rates—ultimately maximizing your investment’s profitability.
Criteria #4: Size and Features
Your villa’s size and features will significantly influence how attractive it is to renters—and how much you can charge.
But it’s not just about luxury; it’s about offering the right amenities that match what renters are looking for in Bali.
Here’s what to focus on:
- Bedroom Count
The more bedrooms you have, the higher the rental price. But don’t overlook smaller villas—couples and solo travelers love cozy, well-designed one-bedroom villas. Know your target market before deciding on size.
- Must-Have Amenities
When buying a villa in Bali, keep in mind that renters expect amenities like private pools, Wi-Fi, and outdoor spaces. Offering the right features ensures that your villa remains competitive.
Criteria #5: Value-Adding Potential
Beyond size and features, one of the most effective ways to boost rental income is by considering a villa’s value-adding potential.
Upgrading or renovating parts of the property can significantly enhance its appeal to renters, allowing you to charge higher rental rates.
Look for villas with renovation potential, such as upgrading outdoor spaces, adding sustainable elements like solar panels, or modernizing the kitchen.
These changes can increase rental rates and attract high-end renters.
Criteria #6: Budgeting
You’re eager for great returns, but it all starts with choosing a villa that fits your budget while maximizing rental potential.
So how do you balance that? By comparing initial price vs. potential income.
Here’s how it works:
- Understand Prices
In Bali, villas can cost anywhere from $150,000 to over $1 million. Villas near hotspots like Seminyak or Uluwatu may seem expensive, but these areas also have high demand for rentals. That means more guests and potentially higher income.
- Calculate Potential Income
Before you decide, research how much similar villas in the area make in rental income. For example, check how much a villa near the beach rents per night and multiply it by how often it’s booked in a year. This helps you see if the income covers your costs (and then some)—and brings profit.
- Costs Less—But Earns Just as Much
You don’t always need the most expensive villa to see returns. A villa in a less famous area might cost less upfront but still have solid rental potential if it offers something special, like a great view or unique design.
Next Steps:
- Start by setting a budget for how much you’re willing to spend.
- Research villas in your price range and see how much they typically earn in rent.
- Compare the initial cost of the villa with the rental income it could generate over time.
A well-priced villa in a desirable location can generate significant rental income, making the initial purchase worthwhile.
So, start with a budget, but keep your eye on the bigger picture: maximizing rental returns.
If you want a detailed property valuation on a specific villa, our team is here to help. Contact us now to get started.
Criteria #7: Long-Term Rental Potential
While short-term vacation rentals are lucrative, you should consider the long-term rental potential when buying a villa in Bali.
In areas like Umalas and Canggu, which attract digital nomads and expats, properties are in demand year-round.
Villas located near co-working spaces or with features that appeal to long-term renters, such as home offices, are more likely to stay booked even during the off-season.
This helps ensure year-round rental income and reduces vacancy rates.
You can maintain consistent rental income throughout the year by catering to short-term and long-term tourists.
Criteria #8: Beyond Online Listings
When looking to buy a villa in Bali, don’t rely solely on online listings. Some of the best great Bali villas aren’t listed publicly.
Here’s how to find hidden opportunities: Use a Local Real Estate Agent.
In Bali Villa Realty, our knowledgeable agent can help you access off-market properties that offer better value and less competition.
Criteria #9: Online Search Activity
In today’s digital world, tracking online search activity can give you real-time insight into which areas are most in demand.
Platforms like Airbnb and Booking.com can provide a snapshot of the number of people searching for villas in different locations, which can help you assess rental demand.
Areas with high search activity on Airbnb or similar platforms often see higher rental demand, translating into better occupancy rates.
Keep an eye on these trends to ensure you invest in areas with rising rental demand.
Criteria #10: Online Search Activity
In Bali’s saturated rental market, having a unique selling point (USP) is key to attracting renters.
Your villa’s USP—whether an ocean view, proximity to a cultural hotspot, or eco-friendly design—can make it more desirable.
Advertise these unique aspects will set your property apart and help you charge premium rates.
Focusing on a USP ensures that your villa remains competitive, especially when many similar properties are on the market.
Let’s Make It Simple
And there you have it—finding the perfect villa in Bali isn’t as overwhelming as it seems once you know what to look for.
Whether you’re looking for that prime spot near the beach or an emerging area that promises big returns—it all comes down to a few simple but powerful decisions, as outlined above.
The good news? You don’t have to go at it alone.
With some guidance (and some insider knowledge), you’ll be well on your way to owning a villa that meets your lifestyle and brings in a steady income.
Now that we’ve wrapped up, it’s time for you to start planning your villa journey.
Are you ready to take the next step? If you have more questions or need more personalized guidance, we’re here to help.
Book your free consultation below, and let’s chat with one of our senior advisors.
