Top Strategies for Maximizing ROI in Bali's Real Estate Market

Kristjan Ploompuu
Founder/CEO

The Investland Bali team shares with you today the best investment strategies to implement in the Bali real estate market. We will also bring you real-life examples from our own and our clients' transactions.

Bali is the jewel of Indonesia and certainly one of the best places for foreigners to invest in real estate. Compared to other popular destinations around the world, Bali real estate offers a significantly higher return potential. Bali is a land of opportunity, whether you are planning to expand your portfolio with commercial or residential properties. Investland Bali is your partner committed to safe and transparent investments in both residential and commercial real estate.

Investing in Bali real estate is the smart move. Average annual rental yields range from 14% to 25%, which is significantly higher than in other regions. The rapid development of the tourism sector and the high demand from foreign investors guarantee profitable investments. 

Investment strategies in Bali

1. Buying and (long-term) renting out real estate.

This is the purchase of real estate for the sole purpose of renting it out, i.e. the focus is on increasing one's annual cash flows rather than on the profits to be made from flipping the property. In some parts of the world, this is also known as the 'milking the cow to death' tactic. Property buying and renting in Bali means buying a ready-made property and renting it out to tourists or locals. It offers a quick income and lower risks, but the property requires constant management and maintenance to keep it attractive. Returns of 14-25% a year.

Our success story: We bought an off-plan loft for $79 950. We refurbished the loft and made some additional improvements at a total cost of $8640. Today the loft is rented out on a month-to-month basis. The tenant pays $1490 per month + part of the utilities. 

Check out our development: Amari Villas (3 units left).

Amari Villas is an exclusive villa complex located in Canggu in the Padonan area. The complex consists of 12 modern 2-bedroom villas (3 bedrooms can be built for an extra fee), each with 130 m² of living space and a 50 m² roof terrace. Each villa has a private garden and swimming pool. Prices start from $180,000. The villas offer luxurious and comfortable living while being close to popular restaurants, sports clubs, and nightlife.

Completion date: 31 December 2024/1 March 2025.

Bali's friends, acquaintances, and business partners know that we are developing Amari Villas close to our homes. With good reason - we know where the good places are! Read more: "Active man's paradise in Canggu"

Speaking of cow-milking tactics here, let's do a calculation on how much rental income can be earned as an owner of Amari Villa until the end of the leasehold period.

  • In the first 25 years, you will earn a rental income of $858,615 (assuming a rental price increase of 3% per year).
  • It then pays to activate the guaranteed 15-year leasehold renewal period. This will cost between 20 and 30 thousand dollars, depending on when the renewal is requested.
  • The rental income projection for the next 15 years is an additional $917,083 (rent increase of 3% per year).
  • In total, it will be possible to milk an Amar cow for $1,775,699 over 40 years.
  • This is after deducting the cost of managing and maintaining the villa, except for major repairs or new furniture.

TEST THE AMARI VILLA ROI CALCULATOR HERE!

 

2. Off-plan buying and reselling

Off-plan purchase and resale on completion involves the purchase of a property at the development stage and its sale immediately upon completion. This allows the property to benefit from appreciation in value during the development period, but comes with development and market risks*. As an off-plan transaction comes with a payment schedule, returns are typically between 20-50% per annum.*

Investland Bali Properties villas come with Zurich's annual comprehensive insurance as a gift. Invest in peace of mind or why insure your Bali villa?"

  • We bought an off-plan loft for $67,000. We paid a deposit of 50% of the purchase price and about 1 month later we found a buyer to whom we sold the loft for $91 850. As the transaction was virtual, we saved on notary fees and leasehold tax.
  • The client bought a villa in our Maya Residence development for $ 110,000. Six months after the purchase, he found a new buyer who bought the villa for $ 150,000. As the transaction took place before the completion of the development and the signing of the notarial contract, the original investor did not have to pay any leasehold tax or notary fees.
  • The client bought a villa in our Maya Residence development for $ 100,000. One month after the purchase, the original investor resold the villa for $ 120,000. Again, there was no leasehold tax and no notary fee.
  • We bought the villa for $135,000 and sold it 7 months later for $160,000, having again avoided the leasehold and notary fees.
  • Our client bought the Maya Residences villa but resold the villa before it was completed and paid in full, making his net yield 20%. Since the transaction entry and exit took place over six months, his IRR* (internal rate of return) was a whopping 66%.

Check out the development: Temple Heights Bali

Temple Heights Bali is a luxurious residential development in Padonan consisting of 15 fully furnished lofts with superbly designed layouts. One and two-bedroom lofts are available. Temple Heights Bali offers a flexible payment plan, top-quality construction, and comprehensive property management services, making it an ideal investment.

Completion date: October 2025.

 Investing $125,000 in Temple Heights Bali loft at the moment, realistic projections give a resale price of $168,750 on completion. After taxes, this translates into a net return of $33,750 or an immediate ROI of 27%.

TEST TEMPLE HEIGHTS BALI ROI CALCULATOR HERE!

 

3. Off-plan purchase, lease for five years + then resale.

Off-plan purchase, leasing out the property for five years on completion, and then selling it means buying a property at the development stage, leasing it out for five years, and then selling it. This tactic offers rental income and capital appreciation but requires long-term planning and management. A realistic 5-year ROI % is 100+.

One possible example: Investing in a Temple Heights Bali loft for $125,00, realistic projections show a 23% annual rate of return, with a potential 5-year rental income of $91,032. By extending the leasehold contract to 45 years, the resale price is $216,086. The real profit after resale remains at $ 52,041. All taxes and property maintenance and management fees are deducted.

 

Autonomous property management vs. professional management services

Are you prepared to manage and maintain your property yourself, or is it worth hiring experts? Self-management can bring higher returns at the expense of management fee savings. However, it is worth bearing in mind that maintaining the attractiveness of a property and managing day-to-day issues requires a lot of time, effort, and expertise.

The Investland Bali team's property management services offer a hassle-free experience. Our team will ensure that your property is well taken care of, ensuring maximum occupancy and rental income. Although management fees come at the expense of profits, the convenience and peace of mind often outweigh the costs, and the investment still remains high with a realistic annual return.

 

A land of opportunities

Bali's property market offers wonderful opportunities for smart investors. With high returns and a variety of strategies, it is the best destination for real estate investment. With an international team and comprehensive services, Investland Bali is your ideal partner.

Check out our latest developments Amari Villas and Temple Heights and invest in the most profitable real estate investment of your life! Are you ready to invest in Bali's booming property market? Contact us today to arrange a call: info@investlandbali.com

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