Buying property in Bali has two main options: buy land or a house.
It’s a big decision, but don’t worry—we’ll explain the differences and help you decide which option is best for you.
Let’s find out!
The Differences Between Buying Land and Buying a House
First, let’s talk about what you’re buying. When you buy land, you’re essentially getting a plot of property that hasn’t been developed yet – a blank canvas.
You’ll have to build from scratch. But this allows you to design your home exactly how you want.
On the other hand, when you buy a house, you’re purchasing a pre-built structure that already has everything you need.
The kitchen, bedrooms, and bathroom are ready to go. Plus, you own the land on which the house sits, which can increase in value over time.
Factors to Consider: Buy Land vs House
There’s no one-size-fits-all answer to this decision. What works best for someone else might not be the right choice for you.
That’s why it’s essential to consider the key factors that can affect your decision to buy property in Bali.
1. Cost
Buying Land:
- If you’re looking for a lower upfront investment, buying land usually costs less than buying a house. But keep in mind, that’s just the beginning.
- Once you decide to build, you’ll need to budget for development costs, which include materials, construction, and other fees. These costs can add up quickly.
- Don’t forget that even if you’re not building right away, you’ll still be responsible for property taxes and maintenance to keep the land in good condition.
Buying a house:
- A house will likely cost more upfront because you pay for the structure and land.
- But the good news is, once you pay, that’s pretty much it. You won’t have to worry about extra construction costs down the road.
- Plus, financing a house is often easier, with more predictable costs and better mortgage options.
2. Time and Convenience
Buying Land:
- Buying land means you’re playing the long game. You’ll need to consider plans, like when to build and how long construction will take. If you’re not in a rush, this can be a great option for long-term investment.
Buying a House:
- With a house, you can start using it immediately. Whether you’re moving in or planning to rent it out, there is no waiting involved.
- Even if you want to make some renovations, it’s usually much faster than building an entire home from the ground up.
3. Investment Potential
Buying Land:
- Land tends to hold its value well, especially in areas with high growth potential. It can be appreciated significantly over time.
- You also have more ways to earn passive income from land, such as leasing it for farming, parking, or other activities. These opportunities can often generate higher returns than renting out a house.
Buying a House:
- The house can depreciate due to wear and tear, but the land underneath will typically appreciate.
- Renting out a house can provide steady, predictable cash flow, although you’ll need to manage tenants and keep up with maintenance.
- While the returns from renting are stable, they may not be as high as leasing land for other uses.
4. Resale Value and Marketability
Buying Land:
- In Bali, land is often easier to sell than house, especially in high-demand areas. Its value appreciates steadily, and many buyers prefer to build their own homes.
Buying a House:
- A house can lose some of its resale value over time due to aging and wear. Additionally, newer and more modern homes being built in the area can make your property less appealing.
- It’s harder to sell a house at a much higher value than land in the long run.
5. Zoning and Permitting (for Villas)
Buying Land:
- Zoning laws can limit what you’re allowed to build on your land. This can affect how you plan to use the property.
- Getting permits can be lengthy, and you might run into roadblocks along the way, especially in more developed or protected areas of Bali.
Buying a Villa:
- Since the villa has already been built, zoning is usually not an issue. However, if you plan to renovate or add, you may still need to deal with zoning laws and permitting.
6. Control
Buying Land:
- You have complete control over what you build. You can design your dream home exactly how you want it, from the layout to the style.
- There’s a lot of freedom here, but it also comes with responsibility.
Buying a House:
- When buying a house, you’re limited by the existing structure. Any major changes might require permits or face restrictions from local regulations.
7. Infrastructure Availability and Utility
Buying Land:
- Land, especially in remote areas, may not have water, electricity, or internet utilities. Securing these can be expensive and time-consuming.
- You’ll need to plan to ensure the land is ready for development.
Buying a House:
- Houses typically come with utilities and infrastructure already in place. There’s no extra hassle, and you can start using everything right away.
The Pros and Cons
Now that we’ve covered the factors let’s compare buying land to buying a house. Each option comes with its own set of challenges. Here’s a handy table to break it down:
| Aspect | Buying a Land | Buying a House |
| Financing Options | No financing options (no mortgage/loan for foreigners), so you need to pay in full with cash upfront. | No financing options either, meaning you’ll need to pay in cash upfront as well. |
| Initial Cost | Generally, there is a lower cost to purchase land, but construction costs will add up later. | Higher upfront costs because you’re buying both the land and the house. |
| Development/Construction | It requires additional costs for building, permits, and a time-consuming construction process. | No construction is needed, but renovations could still be required for personal taste or repairs. |
| Customization | Full freedom to design and build your dream home, but it takes time and planning. | Limited customization; you’re stuck with the current layout and structure unless you renovate. |
| Zoning and Legal Issues | Zoning restrictions can limit what you can build, and getting permits can be lengthy and complex. | Zoning usually isn’t an issue, but major renovations may still require permits. |
| Time Commitment | Building from scratch takes time, with potential delays in construction and permit approvals. | Instant move-in or rental opportunity, though renovations may still take time. |
| Utilities and Infrastructures | Land in remote areas may lack access to utilities (water, electricity, internet) – connecting these can be expensive and time-consuming. | Typically, it has utilities already in place, so there is no need to worry about setting them up. |
| Maintenance | Land requires upkeep to prevent illegal use (squatters) or overgrowth, even if undeveloped. | Older houses may have hidden maintenance issues like plumbing, electrical, or mold. |
| Investment Flexibility | Greater flexibility for future development and higher appreciation potential over time. | Less flexibility; limited to the existing structure, which may affect long-term investment potential. |
Which One Is the Better Investment Option?
So, what’s the final answer? Should you buy land or a house?
Well, it depends on what you’re looking for. If you’re thinking long-term and want flexibility, buying land could be the better option.
You can watch the land appreciate and use it for different purposes to earn passive income.
But if you want immediate stability and returns, buying a house may be the way to go. You can rent it out right away and enjoy a steady cash flow, although you’ll need to manage tenants and maintenance.
In the end, it all comes down to your financial goals, your timeline, and how much risk you’re comfortable with.
If you are still confused about which one to buy and want expert guidance, click the link below for a free consultation with our senior advisors.
What About Buying a Villa in Bali?
If you’re considering a ready-made option, buying a villa in Bali is another attractive choice.
Villas are popular among foreign investors because they often come fully furnished and ready for immediate use as a residence or rental property.
With Bali’s booming tourism industry, owning a villa can provide a steady rental income.
Plus, many villas are built in prime locations, increasing their long-term value.
However, it’s still crucial to carefully evaluate the property, including its legal status, maintenance needs, and overall investment potential.
That’s where having professional guidance can make all the difference.
Let Bali Villa Realty Help You Decide
Whether you’re leaning toward buying land, a house, or a villa, Bali Villa Realty is a trusted real estate agency ready to guide you every step of the way.
Their experienced team can help you assess your options and find the property that aligns with your goals.
Visit their site at balivillareatly.com and contact them. Take the first step toward making your Bali property dream a reality!
