Buying property in Bali is one of the most exciting moves you can make.
But if you’re new to the Bali market, it can feel overwhelming—and a lot of the “advice” out there doesn’t always point you in the right direction.
That’s where this guide comes in.
And before we walk you through the different ways to invest in Bali property, it’s worth understanding why so many people are choosing Bali in the first place.
What makes this island not just a dream destination, but also a smart place to grow your money?
Let’s find out.
Market Dynamics: Trends and Growth Opportunities
If you’re wondering whether now is the right time to dive into the Bali property market, here’s the answer: yes.
Let’s look at some key factors:
- Market Stability: Bali’s market has remained stable through global ups and downs, driven by strong tourist demand.
By March 2024, Bali welcomed 1.34 million international tourists, a significant jump from just 51 foreign visitors recorded in 2021.
Source: Foreign tourist arrivals to Bali (Statista)
- High Property Demand: The island’s appeal to expats, digital nomads, and vacationers means demand for rental properties is high, especially in popular areas like Canggu and Seminyak.
Source: The demand of rental property market (Bukit Vista)
- Future Appreciation: The island’s ongoing infrastructure development and tourism growth suggest that property prices will appreciate over the next decade.
Source: The upward trend of the residential property price index in Indonesia, 2021-2023 (Statista)
With all these growths and opportunities, Investing now means you can benefit from rental income and future appreciation.
Seminyak and Canggu, two of Bali’s most popular areas, have demonstrated strong rental yields, particularly for investors targeting the tourism market.
Source: Potential demand for properties in Canggu (Oniriq Property)
According to recent data, annual rental yields in these areas can reach 8-10%.
These locations benefit from high demand due to their proximity to beaches, restaurants, and vibrant nightlife, making them prime spots for short-term rental properties.
Different Ways to Invest: Building vs. Buying
Now, let’s dive into your options.
Should you buy a ready-built villa or build one from scratch? Both have their pros and cons:
- Buying
It’s faster, and you can rent it out immediately. However, it may come with higher upfront costs depending on the location.
Expect to pay between $300,000 and $1 million for a villa in prime locations like Seminyak.
- Building
Building gives you complete control over design and costs but requires more time, effort, and navigating permits.
Depending on materials and labor, building costs range from $500 to $1,000 per square meter.
Ultimately, your decision will depend on how soon you want to start generating rental income, your involvement in the construction process, and your overall investment goals.
For more information on building villas from scratch, including the budget and finding a great construction team, check our post here>>.
Also read: Buying vs Building Villa in Bali: 9 Key Factors to Consider.
Buying Land in Bali: What You Need to Know
If you’re leaning toward building, you must purchase land first.
Foreigners can’t own land outright in Indonesia, but there are options available:
- Leasehold (Hak Sewa): Foreigners can lease land for up to 80 years, with extensions.
- Hak Pakai (Right to Use): You can lease land for up to 30 years with the option to extend.
- PT PMA (Foreign-Owned Company): If you form a PMA, you can buy land for commercial use, which is more suited for business investments than personal use.
You’ll also want to verify the land’s zoning status. Is it approved for residential use or in a green zone reserved for agriculture?
Consulting a local notary or legal advisor can help you navigate this process.
Related article: How to Buy a Land in Bali.
Step-by-Step: How to Start Your Bali Investment Journey
Now that you’ve seen how lucrative buying a villa in Bali is and the options you have, let’s find out how to own one through the step-by-step guide below.
1. Set Your Investment Goals
Before looking at properties, clarifying what you want from your investment is crucial. Ask yourself:
- Are you seeking rental income?
If so, villas for rent in tourist-heavy areas like Seminyak, Canggu, or Uluwatu may yield the highest returns.
- Long-term appreciation?
Bali’s property market is stable, and areas outside the tourism hotspots, like Ubud or Uluwatu, may see value increase over time as they develop.
Source: 5-bedroom villa in Ubud
- A personal retreat?
If this is your primary goal, you might focus on quieter, more serene locations like Ubud, Umalas, or Pererenan, which provide relaxation and potential appreciation.
Source: Stunning 5-bedroom villa in Umalas with ricefield view.
Setting clear investment goals will help focus your search on the right property type, location, and price range.
2. Choose the Right Location
Location is everything when it comes to real estate, and Bali is no different. The island offers a wide range of options based on what you’re looking for:
- Seminyak & Canggu
These areas are famous for their vibrant beach clubs, trendy cafes, and lively nightlife, making them excellent for short-term rentals.
Tourist traffic is heavy, and rental yields can be as high as 8-10% annually.
Source: Brand-new 2-bedroom villa in Tumbak Bayuh with Ricefield view
- Ubud
Known for its lush greenery and cultural attractions, Ubud is more suited for long-term rentals or buyers looking for a peaceful retreat.
Properties here also cater to wellness retreats, which can be a profitable niche.
Source: Beautiful 5-bedroom villa in Ubud sits on 800 sqm of land
- Uluwatu
Ideal for surf lovers and those seeking a more relaxed vibe, Uluwatu offers scenic cliffside views and is becoming a hotspot for luxury developments.
Your location should align with your goals, whether maximizing rental income or securing long-term growth.
Source: Off-plan 3-bedroom villa in Uluwatu
3. Understand Legal and Tax Implications
Buying property in Bali as a foreigner comes with its legal complexities. It’s essential to understand the restrictions and obligations:
- Foreign Ownership
Foreigners are not allowed to own freehold property directly.
- Instead, you can purchase a leasehold property, which typically lasts 25 to 80 years.
- You can also buy through a foreign-owned company (PT PMA) under certain conditions.
- Taxes
There are several taxes to consider, such as:
- The 5% property acquisition tax (BPHTB) and annual property taxes (about 0.5-1% of the property’s assessed value).
- If you rent out the property, you must also pay a 10% rental income tax.
To avoid pitfalls, consult a local legal advisor specializing in foreign ownership and tax issues to ensure your investment fully complies with Indonesian law.
4. Hire a Property Management Company
Managing a rental property in Bali, especially if you’re not living on the island full-time, can be challenging.
This is where hiring a property management company comes in:
- Hands-Free Management
A good property manager will handle guest relations, cleaning, maintenance, and even marketing your villa for short-term rentals.
- Maximizing Returns
They can also help with pricing strategies, ensuring you’re charging the right amount to optimize rental occupancy while keeping the property well-maintained.
A property management company is invaluable if you want to make your Bali property a passive income source.
Related article The Ultimate Guide to Property Management in Bali.
5. Consult a Real Estate Agent
Finally, working with a reliable real estate agent like Bali Villa Realty is one of the most essential steps in your Bali property investment journey. Here’s why:
- Expertise:
We’ve helped hundreds of foreign buyers like you invest in Bali’s most promising areas, whether buying ready-built villas or building villas from scratch.
- Local Connections
We work with trusted lawyers, notaries, and contractors to make purchasing safe and hassle-free.
- Tailored For You
Like a doctor’s appointment, we customize your investment plan based on your vision, budget, and goal—whether it’s a villa for short-term rentals, a long-term investment, or a personal vacation home.
Are You Ready to Buy Your Villa in Bali?
Starting your property investment journey in Bali doesn’t have to be complicated if you have a clear plan.
From setting goals and choosing the right location to understanding the legal aspects and working with local professionals, each step plays a crucial role in ensuring your investment is profitable and hassle-free.
Ready to take the first step?
Contact us now and get your personalized investment plan by clicking the link below…
We help you find the perfect Bali property that matches your vision and goals!
