Starting Your Investment Property in Bali? Use This 7-Question Checklist Before Buying Any Property

Thinking about investing in Bali’s real estate? It’s all about asking the right questions.

Asking the right questions can clear the way for smart investment decisions.

These questions help you get to know the market better and make your investment safer and more rewarding.

But, if you’re unsure what to ask before investing, you might miss out.

Being prepared is key, especially in Bali’s competitive real estate scene.

Many investors from other countries face issues such as not understanding the local rules, figuring out the best places to invest, and picking the right time to invest. You need a simple guide to help you with these challenges.

Understanding who should invest, when it’s the best time to buy, and how to invest wisely can help you make a successful investment choice.

This leads to more earnings and a solid investment for your future.

Let’s focus on making wise decisions in Bali’s real estate market. I’m here to help you answer the important questions and make informed and profitable investment choices.

Let’s get started!

See How Our Team Helps You Start Your Investment Property in Bali

Location – Discover the best places to invest in Bali.

Reliable Information and Guidance – Discover Bali’s laws and property market.

1. Is investing in property in Bali a good idea?

There are positive indications that investing in Bali property could be a good idea, but it’s important to carefully consider all aspects before deciding. Here’s a breakdown of some factors:

Pros:

  • Stable property market: 

    The Indonesian property market is doing well in 2023 despite problems in the world’s property markets. 

    It’s because Indonesia’s property market works differently and isn’t closely linked with the global property scene.

    Indonesia’s property market is more “old-fashioned.” We don’t use global financial tools like real estate investment trusts (REITs) that other countries trade worldwide.

    Also, the connections between property companies in Indonesia and companies from other countries are not very strong. 

    This means that when property companies in other parts of the world face financial troubles, it doesn’t affect our property companies here in Indonesia.

  • Promising Rental Yields: 

    From July 2022 to July 2023, Bali topped the charts for the most searched-for residential area. 

    Badung’s (such as Canggu, Seminyak, Nusa Dua, Uluwatu, and more) property popularity increased slightly, moving from -1.5 percent to a growth of 1.4 percent. 

    In Denpasar, the growth changed from a decrease of 0.7 percent to an increase of 0.9 percent. 

    These increases in Bali are still bigger than in South Jakarta, where the growth was only 0.8 percent.

    Bali also boasts some of the world’s highest rental yields, with an average occupancy rate of more than 90% in Canggu alone. 

    This can provide a healthy return on your investment.

Source: Occupancy rate in Canggu 

  • Thriving tourism industry

    Bali is a top tourist spot, welcoming over 5 million people in 2023. 

    The island aims to attract more than 13 million visitors in 2024

    This growing number of tourists is great news for the property market in Bali. 

    If you’re considering investing in real estate here, now is a good time. 

    With around 30,000 expats living in Bali, people worldwide love making Bali their home. 

    This could be a smart move for your investment, as more tourists and expats mean a higher demand for properties.

Investing in Bali property has the potential to be lucrative, but it’s not a guaranteed path to riches.  Do your due diligence, research the market thoroughly, and factor in all potential costs and risks.

Here are some additional resources to help you make an informed decision:

  • The Pros and Cons of Buying Property: Is it Truly a Good Investment?
  • 3 best ways to invest in real estate in Bali (and start making money)
  • How to buy property in Bali

2. When to invest in property?

Seasonality is a key factor to consider when investing in Bali property.  

According to a recent report, Bali experiences peak tourist seasons in July and August, with a surge in December.  

Shoulder seasons (April, May, September, and October) see a dip, and low season falls between November and March.

Knowing these seasonal trends can inform your buying strategy.  

  • High-season purchase: 

    You will benefit from immediate rental income as tourist demand is high. However, competition for properties can be fierce, potentially driving up prices.

  • Low Season Purchase: 

    You could potentially secure a better deal on the property. However, a lag in finding tenants might impact your initial rental income.

Ultimately, the best investment time depends on your goals and risk tolerance. 

If maximizing rental income is your priority, consider buying before peak season. 

If securing a good deal on the property is more important, you might be better off targeting the low season.

3. Where to invest in property in Bali?

According to recent data, West and Central Bali are becoming the new go-to places for building hotels. 

In the West, developers are looking at areas up north like Canggu and Tabanan. This is because places like Kuta, Tuban, Legian, and Seminyak are already crowded.

In the center of Bali, Ubud is still where most new villas are being built. 

Ubud attracts visitors with its beautiful nature, interesting culture, and peaceful vibe. It’s a great spot for tourists who want to experience the real Bali.

These trends are important for investors like you looking to put money into Bali’s property market. 

It can be smart to shift your focus to less crowded areas like Seminyak, Canggu, Tabanan, or the popular Ubud. 

These places offer a chance to build something new and appealing for tourists always searching for the next beautiful place to stay.

By choosing these areas, you’re stepping into markets with lots of potential where your investment has room to grow. 

You’re also solving a big problem for foreign investors: finding the right spot in Bali that too many hotels do not already take over. 

4. Which investment property should you buy in Bali?

In top prime locations like Canggu and Seminyak, foreign investors often gravitate towards villas with private pools in Bali. 

However, to maximize your return on investment, consider some unique property features that cater to specific demographics.

  • Target the Remote Worker: 

    More people are working remotely now, leading to a higher demand for long-term rentals. 

    Think about buying properties that have spaces just for work, with fast internet and comfortable chairs and desks. 

    This appeals to people who mix work and vacation time and makes your property a great option, even compared to regular workspaces.

  • Embrace Sustainability: 

    More than ever, travelers care about the environment. 

    Look for properties with eco-friendly features, such as solar panels, systems to collect rainwater and appliances that use less energy. 

    These features can charge higher rents and attract guests who prefer sustainable options.

  • Family-Friendly Focus:  

    Bali is a hit with families. 

    Search for properties with safety features for kids, like fences around pools, bunk beds, and play areas.

    These features can draw in more families and book your property more often.

  • Unique Selling Points:  

    Find properties with something extra: a sea view, a short walk to a great surf spot, or a beautiful garden. 

    Use these special features when marketing your villa.

Beyond Property Features: Consider the Location

When evaluating potential properties, don’t just focus on the villa itself but also where it is.

  • Proximity to Amenities:   

    Is the villa close to restaurants, shops, and activities that appeal to your target audience? Tourists often crave convenience, so a central location with easy access to amenities can greatly appeal.

  • Development Plans:  

    Find out about any new projects in the area. A new attraction could bring in more visitors, raising your rental income. But, a construction project nearby could turn guests away.

  • Community Vibe:  

    Is the neighborhood busy and exciting or quiet and peaceful? Understanding the vibe will help you tailor your marketing strategy and attract the right guests.

Considering these unique factors, along with the standard villa amenities, you can select a Bali property that stands out from the crowd and delivers a strong return on investment.

5. Who should invest in real estate in Bali?

While Bali’s real estate market holds potential for foreign investors, it’s not a one-size-fits-all scenario. 

Here’s a breakdown to help you decide if Bali property investment aligns with your goals and risk tolerance:

Ideal Bali Property Investors:

  • Hands-Off Approach:  

    Are you comfortable delegating day-to-day management tasks?  

    Managing a rental property in Bali, even from afar, requires some effort.  

    Successful investors leverage reliable property management companies to handle guest communication, maintenance, and cleaning. 

  • Long-Term Perspective:  

    Bali’s property market, like any investment, experiences fluctuations.

    Investors seeking quick returns might be disappointed. 

    However, those with a long-term outlook can benefit from potential capital appreciation and steady rental income over time.

  • Cultural Appreciation:  

    Bali’s rich culture and traditions are integral to its charm.  

    Successful investors respect and value the local way of life.  

    Building positive relationships with the surrounding community fosters a smooth rental operation and enhances the guest experience.

6. What Long-term Considerations Should I Be Aware Of?

Sure, the idea of owning a piece of Bali paradise with a steady rental income sounds amazing. 

But before you jump in, it’s important to be aware of some things that can affect your investment in the long run.

  • Lease expiry and renewal:

    Most leasehold agreements in Bali are for 30 years, with the option for extensions. 

    However, the renewal process can be complex and subject to negotiation with the landowner. 

    Factor in potential renewal costs and renegotiation fees when calculating your long-term return on investment

  • Property maintenance and upkeep:

    Tropical weather and high humidity can take a toll on buildings in Bali.  

    Maintaining a swimming pool, gardens, and general wear-and-tear requires ongoing investment.  

    Budget for regular maintenance and potential renovations to ensure your property remains attractive to tenants.

  • Market fluctuations and strategy:

    Bali’s tourism industry and property values can fluctuate.  

    Consider your long-term goals. Will you hold onto the property for rental income or eventually sell it?

  • Taxation implications:

    Foreign property owners in Bali are subject to annual and potential capital gains taxes when selling.  

    Consult with a tax advisor or a real estate agent to understand your tax obligations.

  • Inheritance laws:

    Consider Indonesian inheritance laws if you pass the property on to heirs.  

    Planning your estate structure with a lawyer can help ensure a smooth inheritance process for your beneficiaries.

By thinking about these issues carefully, you can make better decisions and plan for a successful investment in Bali.

7. How Can I Navigate the Market’s Complexity and Competition?

Navigating Bali’s property market as a foreign investor can feel overwhelming. 

But don’t worry… with the right approach, you can overcome the market’s complexity and stand out. 

Here are some key strategies:

  • Embrace Local Knowledge:  

    Bali’s property market has unique features. 

    Partner with a reputable real estate agent who works with foreign investors. 

    They’ll have the local expertise to guide you through legalities, understand cultural nuances, and identify hidden gem properties before they hit the open market.

  • Negotiate Like a Pro:  

    Don’t be afraid to negotiate the price and terms of your purchase.  

    While some negotiation is expected in Bali, clearly understanding the market value and potential renovation costs will strengthen your bargaining position.  

    Your real estate agent can also be a valuable asset during this process.

  • Stand Out from the Crowd:  

    Make your property stand out to potential renters in a competitive market. 

    Consider unique features that appeal to a broader audience, such as co-working spaces for remote workers or eco-friendly amenities that attract environmentally conscious travelers. 

    Additional services like airport transfers or pre-stocked groceries can add value for renters and give you an edge over competitors.

Conclusion 

Every question you ask shapes your real estate investment in Bali.

To make the most of your investment, start with these critical questions. 

Gathering information and understanding the market might take some effort, but it will ensure that your investment is on the right track for success.

Incorporating these questions into your decision-making process will guide you to profitable investments in Bali’s real estate market.

If you’re looking for a way to get ahead quickly, consider consulting with a local real estate expert in Bali. They can provide insights and answers that save you time and boost your confidence.

I’ve outlined the essential questions you should ask. Now, it’s time to dive in.

Have you started your journey in real estate investment in Bali? If so, how have these questions helped shape your strategy and success?

Want to start an investment property in Bali?

Talk to our professional real estate experts and get personalized information tailored to your investment needs in Bali.

Bali villa realty By ilot property

Check our villa & land listings!

Find out your luxurious villa in the best locations in Bali. You can find a Bali villa with beach or ricefield views, whichever you like. The best locations for your property that hand you gains over time.

Your Guide Book is Ready to Download

Click the button below and go through the Guide Book which explains everything you need to know about investing in Bali

guest
0 Comments
Inline Feedbacks
View all comments
guest
0 Comments
Inline Feedbacks
View all comments

Download Guide Form

Please fill this form to get our free guide!

Please enable JavaScript in your browser to complete this form.
Need Help? Chat with us