Investment in Bali Property: Pros and Cons when investing in a Bali Real Estate



Investment in Bali Property: Pros and Cons when investing in a Bali Real Estate

Bali attracts foreigners with its growing economy and rapid development. This means that investing in property in Bali today can provide greater returns in the years to come. Learn more about the prospects, main advantages and disadvantages of investing in Bali

An insurance policy is a guarantee of your safety and peaceful stay outside your home country
An insurance policy is a guarantee of your safety and peaceful stay outside your home country

Many authoritative portals call Bali one of the most desirable tourist destinations in the world. The popularity of the island among travelers and expats grows every year. Bali has all the necessary conditions for life, recreation and business. These factors allow this heavenly place to enter the international rankings of investment attractiveness.

Is it profitable to invest in Bali's economy? More details below.

Prospects for the development of Bali

Indonesia belongs to the category of the most promising developing countries. It is the seventh fastest growing country in the world.

In 2021, the construction of four major projects was announced in Bali, which will increase the tourist flow to the island: a new international airport, the largest theme park in Southeast Asia from Paramount picture, a Formula 1 track in the North West of Bali and a new port for cruise ships. Experts predict that these factors will contribute to the increase in the value of land on the island. Therefore, the most interesting area of investment in Bali is investing in land and real estate.

Why is it profitable to invest in real estate in Bali?

  • Tourist attractive region

Bali is an interesting destination for tourists from many countries of the world, because it has everything: wonderful nature, volcanoes, fascinating wildlife, large rice fields, restaurants, bars and breathtaking views of the sea and mountains. The infrastructure is also developed here: from top entertainment facilities to medical centers.

The tourist season in Bali lasts 365 days a year.

  • Stable real estate market with good returns

- Real estate in Bali has one of the highest yields in the world. On average, 15% per year, without taking into account the increase in the cost of housing. For comparison, the average real estate yield in the world is 5%.

- The annual increase in real estate value is 15–20%.

- The cost of rent on the island increases by 15-20% per year on average.

- Average real estate occupancy during the year is 65-80%.

- Purchased real estate can be repaid in 5-6 years.

  • Reasonable amount of investment

Also, the advantages of investing in real estate in Bali include a fairly low investment threshold: apartments from $143,700, cottages with land from $212,500. A fully finished villa in a tourist location can be bought for $350,000.

The cost of land and real estate in Bali is generally more affordable than in other paradise islands of the world.

  • Government programs to attract foreign investors

The country's government promotes the attraction of foreign investments by simplifying the conditions, taxation system and legislation for foreign investors.

Cons for foreign investors in the Bali real estate market

  • Foreigners cannot be the owners of land, but they can issue it as a long-term lease.
  • There is no mortgage lending.
  • Only specialized companies can rent real estate.
  • Buildings higher than four floors are prohibited.
  • During construction, its location is important: you cannot build near temples and areas of religious pilgrimage.

Risks that should be considered by foreign investors in Bali

It is not enough to choose a profitable country for successful investment. You can buy a remote villa in an area where apartments are popular and the yield will be much lower than expected.

  • Risks depending on the type of real estate

Apartments are the most affordable and optimal for renting. They are in demand among tourists, because there is usually everything necessary for life and recreation here. Therefore, if an investor manages to purchase a quality object, renting it out will not be difficult, and the income will be high. However, there are not many of them on the real estate market, because getting permission to build this type of housing is difficult for developers.

A private villa needs constant care and control. Due to the peculiarities of the climate, housing can quickly lose its marketable appearance, so investors are forced to invest money in the repair of the object quite often.

One of the most affordable and quite profitable options is a villa on the territory of the complex. It has its own territory, round-the-clock security, and the complex is managed by a management company.

  • The location of the real estate was chosen incorrectly

Property location affects occupancy and profitability. The most successful area is Seminyak-Kerobokan-Changu.

How to find apartments for investment in Bali?

When buying apartments at the construction stage, it is important to choose a reliable developer:

● first of all, check all documents: land rights, building rights, tax documents. The consultation of a highly qualified lawyer will help to understand all the intricacies of Indonesian legislation.

● then check the list of works of the developer - it is better if the company already has completed projects.

A profitable investment option in Bali is the purchase of premium apartments ANTA Residence Canggu from the reliable international developer ANTA Group, which has been operating in the real estate market for over 10 years. ANTA Group creates infrastructure around the world: in Ukraine, Turkey, Great Britain and Indonesia.

ANTA Residence Canggu is a complex of category 5* with a unique infrastructure, in the most fashionable location of Bali, on the main street of Canggu - Batu Bolong and 7 minutes from the Indian Ocean, the beach and the surf spot.

  • Request for proposals

It will not be possible to reach the expected profitability if there are many more offers for rent in the area where housing is located than there are people who want to rent housing.

  • Leasing by the management company

Renting out a property on your own can be difficult for an investor, because you will have to find tenants, conclude a contract, monitor the payment process and the security of housing. Most owners give their housing to the management company, the cost of services is 15-30% of the profit.

According to forecasts in 2023, the cost of renting property in Bali will increase by 30%, in part due to the return of Chinese tourists to the island. In the next 5 years, an increase of at least 150% is expected for ready-made objects. The benefits of investing in Bali property far outweigh the drawbacks and potential complications. Therefore, now is the most successful period for investing in the country's real estate.

We talked more about investing in real estate in Bali in our previous article. Find out what type of property and in which areas of Bali are the best to buy, how to find the best deals and how much to expect by following the link.

Products from Visit World for a comfortable trip:

Checklist for obtaining a visa and necessary documents in Indonesia;

Legal advice on business, migration, tourism in Indonesia;

Travel and medical insurance for foreigners in Indonesia;

Insurance for foreign students in Indonesia.

More articles on the topic:

Gold Visa to Bali: a new program for investors.

Real estate in Bali: the most profitable location in the world for investors.

The best countries for investment in 2023 - find here.

Investing in foreign real estate: everything you need to know.

Golden rules of investing: what to look for for successful investments.

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