The Safe Way of Buying Property in Bali as a Foreigner
With an amazing culture, lush landscapes and a tropical climate, there's no doubt that Bali is an incredibly attractive location for investors looking to capitalize on the growing tourism industry. But building an investment villa in this tropical paradise is no small feat - from finding the perfect location to managing your costs, there are a lot of steps involved in making sure you create the best villa possible. In this article we'll provide you with a step-by-step guide on how to build the best investment villa in Bali.
What is the Villa Rental Market in Bali?
The villa rental market in Bali is huge. There are many villas for rent all over the island, and they come in all shapes and sizes. You can find villas for rent that are large and luxurious, or small and cozy. There are also villas for rent that are located in the heart of the city, or in more remote areas. No matter what your budget or preferences are, you will be able to find a villa for rent in Bali that suits your needs.
The villa rental market in Bali is growing rapidly, with more and more people looking to rent or buy villas for their vacations. 6.3 million foreign tourists visited Bali in 2019 (Source: Bali Government Tourism Office). The Bali villa rental market is estimated to be worth US$138 million, which is approximately 35% of the Asia Pacific market. The average rental rate for a villa in Bali is US$1,000 per week. There are a number of factors that contribute to the high demand and popularity of renting villas in Bali.
Bali is a world-renowned tourist destination, with beautiful beaches, lush greenery and a unique culture. It is no wonder that people from all over the world flock to Bali for vacations. Renting a villa allows visitors to experience all that Bali has to offer in luxury and privacy.
Another reason for the high demand of villa rentals is that they offer excellent value for money. When compared to other holiday accommodation options such as hotels, resorts or apartments, villas offer much more space and privacy at a similar price point.
If you are considering investing in a villa development in Bali, now is an excellent time to do so. Investing in a villa is a great way to diversify your portfolio and reduce your reliance on stocks and other traditional investments. Real estate has proven to be a very stable asset class over the long term, so investing in villas can help protect your wealth during periods of economic turmoil.
How much does a villa in Bali cost to build?
The cost of building a villa in Bali can vary greatly depending on the size and location of the property, as well as the type of construction. Generally speaking, however, the cost of building a villa in Bali will be lower than that of building a comparable property in other parts of the world.
The land price in Bali is growing day by day. The average price of land in Bali is currently about Rp 17 million (US$1,000) per are. The price of land varies depending on the location, with prime locations such as Seminyak and Canggu fetching a higher price.
The Indonesian government has also announced that it will be building a new airport in North Bali, which is slated for completion in 2024. This project is expected to drive up the prices of land in the area surrounding the airport.
Foreigners are not allowed to own land in Indonesia, so leasehold is the only option and you should expect to pay at least $40,000. This will give you the right to build on the land for a set period of time, typically 20-30 years with the right of extension.
When it comes to building a luxury villa in Bali, the average cost per square meter can range quite significantly. This is because there are a number of factors that can impact the final cost, such as the location, materials used and the level of finishes required.
As a general guide, you can expect to pay anywhere from $500 to $1,500+ per square meter for a high-end villa in Bali. This will include a private pool, spacious outdoor living area, modern kitchen and lavish bedrooms with en-suite bathrooms.
However, it is possible to build a luxury villa in Bali without breaking the bank. There are a number of ways you can save money during the construction process, such as sourcing local materials and hiring one stop company to plan a project.
What is the average (ROI)? in Bali
The average ROI for a villa in Bali is around 5-6%. This means that for every $100,000 you invest, you can expect to earn $5,000-$6,000 per year. Of course, your actual ROI will depend on many factors, including the location of your villa, the quality of construction, and the rental market conditions.
If you are looking for a higher ROI, you may want to consider investing in multiple villas in Bali, such as villa complexes. With a portfolio of properties, you can spread your risk and potentially earn a higher return.
7 Steps to Building Your Own Villa
1. Find a reputable agent
Once you've done your research, it's time to find a reputable agent who can help you with the purchase process. Make sure to ask around for recommendations and read online reviews before choosing an agent.
2. Choose the right land
One of the most important factors to consider when buiding a Bali villa is the location. You'll want to think about things like proximity to beaches, restaurants, and other attractions. Additionally, it's important to consider the safety of the area when making your decision.
3. Conduct due diligence
Before buying a Bali villa, it's important to conduct due diligence on the property. This includes getting a survey done to check for any legal issues, as well as obtaining a certificate of occupancy. Additionally, you'll want to make sure that the property is free and clear of any liens or encumbrances.
4. Find a good lawyer and notary
It's essential to have a reliable lawyer and notary when building a Bali villa. Your lawyer will be able to advise you on all the legal aspects of your purchase and help you navigate the process.
5. Get an PBG (Building Permit)
An PBG (Persetujuan Bangunan Gedung ) is required for all buildings in Indonesia, including villas in Bali. To get your PBG, you'll need to contact the local government office and provide them with copies of your land ownership documents, building plans, and other necessary information.
6. Apply for the Pondok Wisata
The next step is to apply for a Pondok Wisata. This is a special permit that allows you to rent the property. It can only be held under the name of an Indonesian citizen, or managed by a PT Company with scope for business villa management.
7. Build your villa
Once you have all the paperwork in order, it's time to start building your villa! With some research and careful planning, you can find a great contractor who can help you build your dream villa in Bali.
Where is the future of the Bali villa market?
The current trends are pointing to a healthy and growing market, with more people wanting to own a piece of Bali real estate.
There are several reasons for this positive outlook. First, there is an increasing number of wealthy Indonesians and Europeans who are looking for investment opportunities in Bali. Second, the island's infrastructure is improving, making it easier for people to travel to and from Bali. Finally, the Indonesian government is supportive of the development of the villa market, as it provides jobs and boosts the economy.
With all of these factors working in its favor, it's no wonder that the future of the Bali villa market looks bright.