11 Property Investment Tips that Seriously Maximise Your Returns

Investing abroad can be complex.

The rules are constantly changing, not to mention lots of misinformation out there.

To get the maximum results for your property investment… you may need to alter your strategy over time. 

But you don’t need to worry…

In this article, we’ll elaborate on 11 tips you can exploit today to get the most out of your process and have a safe and profitable investment. 

Let’s show you 11 critical aspects you need to understand—complete with examples:

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Point #1: Understanding Ownership Titles

As a foreign investor, what titles can you have when investing in property in Bali?

Well, in Indonesia, foreign investors cannot own property… it’s only reserved for Indonesians. 

You only have the right to build (HGB) and leasehold (a long-term rental) ownerships. 

These two are the most popular ways for foreigners who want to buy property in Indonesia. 

  • HGB (right to build): 

A company usually uses a right to build (HGB) by setting up a foreign-owned company, PT PMA. 

HGB is the closest ownership you can get with a freehold title. It is a popular route for foreign investors seeking more secure property investment and broader ownership rights in Indonesia.

This setup allows land use for up to 80 years and has the option to extend—though it does place the property under the business rather than in an individual’s name.

As HGB is designed for companies, it requires more complex rules than getting a leasehold. 

For example, when setting up a PT PMA, you must have at least two shareholders (the CEO and the Chief Commissioner), one of whom should be Indonesian.

The process is more complicated because you need a minimum investment of around IDR 10 billion (around USD 700,000).

  • Leasehold

Opting for a leasehold is the easiest way to acquire a property in Bali and is also the most popular. 

Leasehold grants you the right to use the building within 25-30 years, which can be extended.  

This arrangement allows you to pass the property to your children within the agreed-upon terms with the owner. 

It’s a safer investment option that doesn’t demand a down payment, offering first-time investors in Bali a good starting point. 

Point #2: Location

I know… you may have heard this many times—but location is the most important factor in real estate investment. 

A great location influences occupancy rates, rental income, and property prices. 

Having a property near beaches, shops, schools, or restaurants is more profitable than, let’s say, in the middle of nowhere. 

Though Bali is one the most popular destinations in the world, not all parts of Bali can give you great returns.

Look for tourist destinations like Canggu, Seminyak, Nusa Dua, Sanur, Uluwatu, or Bingin. 

Locations also impact whether you can buy or build certain types of properties. 

Here, zoning laws will affect their building permits and intended use. 

For example, the yellow zone is a residential area used for building a home or a vacation home.

The pink zone is a tourism area you can use for commercial purposes—like building hotels or apartments. 

Meanwhile, green zones are reserved for agriculture, which you can’t build or buy for business purposes.

So, understanding different types of zoning helps you have a safe real estate investment in Bali.

If this sounds complex, work with a local real estate agent. They’ll help you navigate these regulations and find the property that suits your budget while getting a high return. 

Point #3: Legal Framework and Compliance

You don’t want to invest your hard-earned money and lose it because you didn’t follow the rules. 

That’s why it’s essential to know how property investment in Indonesia, especially Bali, works. 

It includes ensuring all permits and legal documents to minimize future legal complications. 

Before buying land or a villa in Bali, you should ask if the property owners have some letters mentioned below:

  • The Building Permit (IMB).

The license is essential for legally owning a building in Bali because it shows that the property is legally constructed and specified based on its function, size, and other technical details.

  • Kartu Tanda Penduduk (Indonesian Identity Card) of the owner/seller
  • Kartu Keluarga (Family Card)
  • Marriage Certificate or Death Certificate (depending on the circumstances of the couple) 
  • Original certificate of land ownership
  • PBB tax payment, called SPPT PBB
  • Owner/seller’s tax number (NPWP)

Also, always verify that the land zoning and the original ownership certificate are in place. 

Ensure that there are no outstanding taxes or mortgages under the land certificate and that the building permit for the house is in place.

Since foreigners cannot access the official register, a property agent like Bali Villa Realty can help you connect with the property owner… And help you check all of those documents. 

Point #4: Maximizing Rental Yields in Bali

If you want to rent out your property, like Airbnb, you might need to consider some of these things:

  • Setting strategic pricing
  • Understanding peak tourist season
  • Offering unique amenities that enhance guest experiences. 

Let’s start with the first point.

Setting the Right Price

Let’s say you have a villa in Seminyak, a hot spot in Bali known for its fun nightlife and beautiful beaches. 

Many people want to stay here from July to August and around Christmas and New Year. 

You can charge 20-30 % more during these times than in slower months. 

When it’s not so busy, you could lower your prices or offer special deals to keep people coming, ensuring your place stays booked all year.

​​Knowing When Tourists Come.

Bali gets busy during the dry months from April to September and around the holiday season. 

It will be easier to fill up your rooms with tenants during these times. 

Most people want to spend a peaceful and quiet time with their family…

If you have a place in Ubud, you can advertise it for its peaceful views and culture…

You could also market it as the perfect spot for guests who want to see Bali’s cultural events or historical places. 

Or spend nothing to advertise and list your villa with a real estate agent, like Bali Villa Realty.

Making Guests’ Stay Better

To maximize your property’s rental value, add family-friendly features like a private pool with safety features for kids, a game room, or a home theater. 

Providing extra services like a personal guide to Bali’s less-known spots can improve guests’ experiences. 

This leads to your place being booked more often and lets you charge higher prices.

Point #5: Financial Planning and Hidden Costs

When buying an already-built villa, knowing all the costs is essential.

This way, you will be aware of extra expenses later.

First, there are the regular costs, like paying for insurance to protect your property and spending money on upkeep to ensure everything stays nice and works well. 

But then, some hidden costs might surprise you if you’re unprepared. 

For example, in Bali, there’s something called a Banjar fee… 

This is a fee you pay to the local community, and it’s like being part of the neighborhood. It’s important because it helps keep everything running smoothly in the area where your property is.

Another thing to think about is the furniture. 

Stuff like furniture, decorations, and everything that makes your place nice for guests can add up. 

Plus, offering extra amenities like a private pool, a big TV, or bikes for guests can cost you more money. 

So, when you’re planning your budget, make sure to include all these costs. 

This way, you can ensure your Bali rental home is a success with fewer unexpected expenses. 

Point #6: Market Trends and Location Analysis

The global real estate trend 2024 is looking for homes with eco-friendly features, spaces to work from home, big yards, and things that save energy, like solar panels and water filters. 

This trend is also expected to influence Bali’s property market. 

With the number of tourists coming to Bali increasing, the trend is an important thing to consider. 

Statistics show that the average number of booking trips to Indonesia grew by 55 percent because of the increase in international booking trips from places like Australia, England, the USA, and more.

This is good news for people wanting to make money by renting their places in popular locations. 

For example, more than 75% of properties are booked in Canggu, with an average occupancy rate of 91,6%.


Source: Canggu’s occupancy rate

It’s perfect for people who want to live and invest in Bali because it’s close to many restaurants, beach clubs, and more. 

Whether buying a home for yourself or as an investment, places like Seminyak, Canggu, or Sanur are great options. 

These areas are close to international schools, banks, gyms, and shopping, making them popular among visitors.

And you’ll see immediate returns and consistent rental income. 

Also read: Comparing Bali’s Top Investment Destinations: Canggu, Seminyak, and Uluwatu.

Point #7: Tourism Trends and Investment Opportunities

Bali’s dependency on tourism makes it vital to consider global tourism trends when investing in property. 

The demand for residential and commercial real estate presents lucrative opportunities for vacation rentals and businesses catering to this demographic.

Many tourists visit Bali yearly; in 2023, more people came than before. 

You can see just how many by looking at the picture below, which shows the numbers going up.

Source: Visitors to Bali 2022-2023

Since so many people come to Bali for vacations, they need places to stay and things to do. 

This means you could make a good income if you own a villa or apartment you rent out to tourists. 

Thanks to all the visitors, not just homes but businesses like restaurants, stores, and office spaces are in higher demand, too. 

This is great news if you’re thinking about investing in commercial property. 

Point #8: Managing Your Property Remotely

What do you do after buying a property? 

You need to consider the maintenance to keep your property running. 

You can easily handle the management if you stay in Bali… but it’ll be tricky if you’re overseas. 

That’s why it is crucial to have someone you can trust to look after it. 

And it means finding a good property management service

A property manager will do all the hard work for you, like keeping the place clean, managing tenants, and taking care of the property’s regular needs. 

This way, you don’t have to stress about your property, especially when you’re not in Bali.

So, how do you find a great property management team? 

Look for a service with many happy customer reviews and know the ins and outs of caring for rental homes in Bali. 

They should communicate well and have a clear report so you always know what’s happening with your property. 

Also read: How to Manage Your Property Abroad for Foreign Investors in Bali.

Point #9: Nominee Ownership Risks

Sometimes, foreign investors want to buy property in Bali but run into rules that stop them. 

They might try to get around these rules by using a nominee system.

A nominee system means someone from Indonesia owns the property in their name.

This nominee system isn’t something we suggest doing. 

Even if a foreigner is married to someone from Indonesia, the property ends up in the Indonesian partner’s name, not the foreigner’s. 

Law Act No. 5 of 1960 explicitly states in Articles 21, Section (1), and 26 Section (2) that foreigners can’t own land or property outright, and Indonesian citizens can’t just hand over their ownership rights to foreigners. 

The big problem with using a nominee system is the risk. 

Imagine if the person whose name is on the deed decides to sell the property without telling you, or if there’s a disagreement—they might have a better chance of winning in court because they technically own the property. 

Also, if your relationship with this person changes, it could mean trouble for your property rights.

There have been many stories in Bali where these nominee deals have gone south, leaving the actual buyer out of luck and without their property.

Knowing all this before you even think about buying property in Bali this way is super important. 

If you want to learn more about buying property safely in Bali and keeping up with the latest rules, contact us at Bali Villa Realty for a chat. 

We’re here to help ensure you can invest in Bali the right way.

Point #10: Transfer of Funds and Financial Transactions

When planning to buy property in Bali, it is important to figure out the best and legal ways to send money. 

This means you must understand Indonesia’s rules regarding foreigners putting money into the country.

In Indonesia, people from other countries often can’t take out loans. Still, there’s ease on taxes thanks to agreements between Indonesia and other countries like Russia, Qatar, Bangladesh, India, Australia, Austria, Belgium, and others. 

These agreements are usually called double-taxed agreements (DTAs) and ensure you don’t get taxed twice on the same money—once in Indonesia and again back in your home country.

But it’s super important to talk to a lawyer to ensure everything is done right, especially to avoid paying more taxes than necessary.

Usually, when you’re ready to pay for your property, sending the money to a notary’s account is the way to go. 

A notary is a publicly appointed official who acts as an unbiased witness to signing a legal document.

Using a notary makes things safer for you and helps avoid any trouble with your money. 

Sending your money directly to the seller or a builder might seem simple, but it can be risky. You want to protect your investment, and using a notary is a smart move to help with that.

If you already know a notary you trust, you can use them. 

If not, your real estate agent can recommend a good one.

Point #11: Working with A Local Real Estate Agent

Buying property in Bali can take time and effort. 

You need someone who knows about the local market and what you need to do. 

That’s where Bali Villa Realty comes in. We’re here to help people from other countries make safe and smooth investments in Bali.

We take care of everything you need to check before buying, like ensuring the property has all the right permissions and follows Bali’s latest rules. 

Our agents are experts in this and will guide you through every step. They’ll even introduce you to the person selling the property.

Working with us makes buying property in Bali less confusing and more straightforward. We’re here to help you find your dream property without any stress.

Click here now to get a free consultation. 

Conclusion 

The tips outlined above are critical to having an excellent return for your Bali real estate investment. 

Understanding these 11 factors already prepares you with 74,6% knowledge of how the real estate market works in Bali. 

You already protect yourself from the potential of getting scammed and unclear information.

That said, you may still have many questions about other aspects of investing in Bali and how to make the most of your hard-earned money. We’ve got your back.

If you want more info about real estate investment in Bali, click the link below for a free consultation.

Drop some comments below if you have any questions.

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Εγγραφ στο www.binance.com

Your point of view caught my eye and was very interesting. Thanks. I have a question for you.

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Εγγραφ στο www.binance.com

Your point of view caught my eye and was very interesting. Thanks. I have a question for you.

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