Setting the right rental price can be a challenging task.
Charge too little, and you might not cover your expenses or make a profit. Charge too much, you risk your property sitting empty for weeks…
On top of that, there’s the stress of accounting for big-ticket repairs, annual expenses, and maintaining cash flow…
Sound familiar? Don’t worry.
This guide will help you find the sweet spot for your rental pricing, ensuring you cover your costs, maximize your returns, and attract the right tenants.
Let’s get started!
There’s no one-size-fits-all answer, and so many factors come into play—your location, your property’s condition, or market trends.
Here are 5 steps to help you find the right price of how much you should charge for rent in Bali.
Let’s dive in and break it down step by step.
#1. Start with Local Market Insights
The first step is to understand your market.
What are properties like yours renting for in your area? Look at the size, condition, and amenities.
Focus on properties in comparable neighborhoods to see what they’re charging.
This strategy works particularly well in areas where rental options are limited.
If your property is in a desirable location, you’re likely setting the market rate.
Another common approach is to start slightly above the average rate.
For example: if properties in less desirable areas charge $700 for a two-bedroom unit, it makes sense to charge more if your property is in a safer, family-friendly environment with better features.
Starting slightly above the market average can also be a useful strategy.
If there’s strong interest, you’ll know your pricing is competitive. If not, you can adjust the price until you find the sweet spot.
#2. Include Big-Ticket Repairs in Your Pricing
Renting out a property isn’t just about covering your expenses or generating income—it’s about being prepared for the inevitable.
Roof repairs, HVAC replacements, and other big-ticket items can quickly eat into your profits if you’re not planning ahead.
Here’s a practical tip: estimate the cost of major repairs and divide them by their lifespan.
For example:
- A roof replacement might cost $9,000 and last 15 years, so budget $600 per year.
- A new HVAC system might cost $6,000 and last 10 years, so set aside $600 annually.
A good rule of thumb is to allocate 5% of gross rental income for regular repairs and 10% for capital expenditures like major renovations or system upgrades.
By building these expenses into your rental price, you can avoid the pit-in-your-stomach moment when a major repair bill wipes out your cash flow.
#3. Follow the “50% Rule”
So what is the the “50% rule”?
The “50% rule” is a useful guideline for landlords.
It suggests that roughly half of your gross rental income will go toward operating expenses. This includes repairs, taxes, insurance, and vacancy cost.
For example, if your property rents for $1,000 per month, you can expect $500 of that to cover expenses.
The remaining $500 is then allocated for debt service, cash flow, and reserves for future expenses.
Why is this strategy essential for your rental’s success?
Because this rule helps you avoid underpricing your rental, ensuring that your income can cover both expected and unexpected costs.
#4. Stay Flexible and Monitor the Market
Once you’ve set your initial price, be prepared to adjust based on demand.
Setting the right price isn’t a one-and-done task.
Once your property is listed, monitor inquiries and adjust the price based on demand.
If you’re receiving fewer inquiries than expected, lower the rent slightly—around $50—and see if interest picks up.
Conversely, if you’re getting a lot of inquiries quickly, consider raising the price for future tenants.
It’s important to remain flexible and adjust as needed to keep your property competitive while maximizing occupancy.
#5. Highlight Your Property’s Value
A Brand New 2Bedroom Villa For Yearly Rental in Pecatu Bali
When pricing your property, don’t just focus on the number—show potential renters why your property is worth it.
Highlight the features that make it special:
- Is it in a safe, family-friendly neighborhood?
- Does it include modern appliances or desirable amenities like a pool or fast Wi-Fi?
- Is it close to popular cafes, beaches, or schools?
Proximity to Bali’s beaches, cafes, and schools can also increase your property’s appeal.
Renters are willing to pay a premium for properties that offer features and conveniences they value.
Highlighting these details in your listing helps justify your price and attracts the right tenants.
The Bottom Line
Setting the right rental price in Bali is about finding the perfect balance—covering your costs, staying competitive, and showcasing the unique value of your property.
By doing your research, accounting for expenses, and staying flexible, you’ll attract great tenants, maintain steady cash flow, and achieve long-term profitability.
So take it step by step, make adjustments when needed, and trust the process.
If you have any questions about pricing or anything related to buying property in Bali, we’re here to help.
Click the link below to book your FREE consultation and chat with our knowledgeable team!
