Bali is an ever-emerging market for property and real estate, since the day people like Walter Spies, Vicky Baum and Colin McPhee bought or rented a piece of real estate in this island.

Bali’s nature, exoticism (even to me, Hinduism still offers an unfathomable aura of mystery) and culture, have magnetized tourists and expats alike, and always will. In recent years, with more opportunities open up, the thinning of boundaries between nations and abundant “work from home” opportunities, Bali has seen more ex-pats flooding in than ever.

 

The Problems

The demand for residential places increased as a result. Rules are made to accommodate this spurt of growth, while others are broken. Wealthy Indonesians from Jakarta and other big cities like Surabaya and Bandung responded to the increase of visitors each year. New hotels are sprouting, literally overnight, like mushrooms in Bali. And there are more to come. Business partnerships were formed, overseas money flowed in, lawsuits filed and I don’t know what else.

This is quite a challenge for Bali, which naturally is a small island with an even smaller part of the desirable area, with Badung regency taking the lion’s share of it. Concerns were raised. Susi Johnston for example has made a very popular fan page entitled How Much is Too Much just to raise awareness of this seemingly uncontrollable development of hotels and the practices of the developers (so similar to each other as if on cue) of giving a little or no regards toward the environmental issue.

To make matters worse in a point, by prohibiting tall buildings, the local wisdom or kearifan lokal seems to promote the acquisition of massive size of the land plot. This is a setback no one expected, not even the late great Ida Bagus Mantra himself, the wisest governor Bali ever saw, who first codified it in order to respect the sacredness of Pura. This is a loop often utilized and exploited by irresponsible parties to reap profits.

Yes, we all want to make a profit, but surely not at the expense of the island and its future well-being. The solution for all of this is to go back to common sense. The massive sprawl of luxury hotels in every kilometer is not common sense.

However, despite the massive land takeovers conducted by hotel shareholders and developers, the sale and rent of private property e.g. villa and house–or land upon which they will be built–still dominate the property market in Bali.

“How much land do I need for my Bali home?” This question is an important matter in the long run because it’s based on modesty, common sense and it definitely shows responsibility on your part. Like anything else, buying something just because you can, only serves nothing else but inflates your ego. And this is not something Bali could survive from. Paraphrasing Gandhi: “Bali has enough for everyone’s need, but not for everyone’s greed.

Meanwhile, real estate prices keep increasing. As varied as it may– depends on the location–the price is still going one way: up. This could serve as a buffer, to slow down the rates of land conversion from agricultural to residential. However, it creates another problem. Everyone wants their fair share of that cake: a promise of quick money, instant wealth and God knows what else.

Just to follow my curiosity, I compared the price of property in Bali with those in major cities in the world.
In this case I picked New York, Upper East Side; France, Paris, Île-de-France; Italy, Milan and Australia, Sydney.
I know, I know. Others will argue that this comparison is cheeky (place randomly picked, unbalanced etc), but since it serves no other purpose than to fulfill my curiosity and not by any means a thorough comparative study, hold your horses, everyone!

 

Addressing The Problem

Opinions torn in two sides. Those who’ve spent decades in Bali missed the old days (go back in time or maintain status quo), while those who came later, are trying their best to keep up (to develop it further). At this point, everywhere it turns, Bali stares at immediate danger. It is as if impending doom awaits in every corner: economic imbalance, environmental issues, safety and traffic-related ‘disasters’ etc. However,  it's a consequence one should expect from a place that relies heavily on tourism. It's the honey, money, and poison all at once.

The challenge would be to harness all those demands into something constructive and beneficial to the island and to its people. This is the chance to give back to the island, to its culture, to its gods in equal manners, especially considering how this place benefits us, body and soul. There’s no other way. This counts for the locals too, Balinese in particular and Indonesians in general, as they’re part of the interconnected links that both sustain and live off Bali.

Principles-based on local wisdom, common sense and mutual respect should be reinforced. The local government, who many believe is the biggest part of the problem, should keep transparency above all else in every deal concerning these matters.

Only then we will see the Bali we all love is assured of its future. Only then the question I use as the title of this piece will have a decent answer, the same answer people I mentioned earlier would’ve said: “Why not?”

7 Costs you need to cover in Bali Rental

 

So, you finally decide to set up a villa rental in Bali or even already own one! However, managing a villa comes with various expenses that you might not have considered. In this article, we'll outline the most common villa expenses in Bali rental to help you prepare and budget effectively. Let's dive in!

 

List of Bali rental monthly cost

 

1. Maintenance

 

Owning a villa in Bali requires regular maintenance to ensure it remains in excellent condition. Maintenance expenses may include repairs, refurbishments, landscaping, pool cleaning, and pest control. Setting aside a budget for maintenance is crucial to upholding the quality and attractiveness of your property. 

 

You must set aside your profit from the Bali rental villa for maintenance.

Photo by toa55 from akaratwimages

 

Saving a part of your rental revenue as a sinking fund for maintenance is the most common practice for villa owner who rents out their property. For routine maintenance, we advise to set the budget between 2-4% of your rental annual revenue.

 

2. Employee

 

Hiring employees for your villa rental is common in Bali. This expense covers salaries for housekeepers, gardeners, security personnel, and other staff members. Remember to comply with local labor laws and provide fair wages to your employees.

 

Indonesia has what's called UMK (Upah Minimum Kabupaten or regency minimum wage), which refers to the minimum monthly wage regulation that employers must adhere to. It is calculated based on the minimum costs that are needed to cover a minimum living standard for an individual in the region. So far, the UMK has always risen following the annual rate of inflation and rising prices of goods in the market.

 

Investing in employees by paying them well can get your rental villa in Bali goes far.

Photo by cottonbro studio in Pexels

 

Currently, in 2023, Badung Regency holds the highest minimum wage in Bali, with 3,1 million IDR per month which includes popular areas like Kuta, Seminyak, Canggu, Pererenan, Bukit Peninsula, and more. Notable areas outside of Badung Regency include Ubud, which is located in Gianyar Regency. You can check here for more info about UMK in Bali each year.

 

Besides the UMK, employers should also ensure that employees are covered by insurance, which must be paid through the government program called BPJS. BPJS payments are separate from the UMK and represent the minimum compensation employees should receive. Therefore, it's essential to include insurance payments in the overall salary package.

 

If you want to know more about what employers should or should not do in Indonesia, you can check more here.

 

3. Electricity

 

Electricity costs can be significant, especially if your villa has a large power source and offers various amenities like air conditioning, heating, or a smart home system. Implementing energy-efficient measures and being mindful of electricity usage can help reduce this expense.

 

4. Internet

 

Offering reliable and high-speed internet is a must for daily living in this day and age. So, unless you try to sell your villa as a hermit retreat, you should factor the expense of internet services into your overall operating costs.

 

Having an internet connection in a villa is essential in today's times.

Photo by PhotoAttractive from Getty Images Signature

 

One of the most popular internet service providers for villas or hotels in Bali is Global Xtreme & CBN. The lite package starts from 250K IDR while the ultra high speed at 1 million IDR per month, where you'll get a guaranteed 100 Mbps internet speed. Custom packages are also available if you need even faster speeds.

 

5. Banjar

 

In Bali, contributing to the local Banjar (community association) is customary. Besides further ensuring security around the neighborhood, the Banjar fee also supports various community initiatives, including local events and ceremonies.

 

Pecalang from a Banjar provides added security to the neighborhood.

Photo by Sue in Flickr

 

Read more: What is Banjar in Bali?

 

The fee of each Banjar varies, depending on each rule and policy of the local neighborhood. For a villa that is used as rental accommodation, the local Banjar will charge you, the rental business owner, between 50k IDR to 250k IDR a month.

 

6. Bin Collection

 

In Bali, the usual practice for bin collection involves a pickup service facilitated by dump trucks, following specific schedules. These trucks collect garbage directly from in front of the villa, maintaining a routine. It's important to be aware that during significant Hindu religious ceremonies like Galungan or Nyepi, the garbage pickup service may be temporarily halted, as the service providers participate in the ceremonies. 

 

Eco-friendly waste management can be a deal breaker for your villa rental in Bali.

Photo by Eco-Bali

 

On the other hand, the rising trend of eco-friendly practices in waste management is significantly impacting the villa rental landscape. Responsible waste management and recycling have taken center stage, and this eco-friendliness adds considerable value to your rental villa. In fact, for some prospective tenants, your villa's commitment to eco-conscious practices can even be a deciding factor. Exploring the costs associated with eco-conscious bin collection services not only demonstrates your commitment to minimizing your villa's environmental footprint but also appeals to environmentally-conscious renters.

 

If you’re interested in getting the service, you can connect to one of them here.

 

7. Income & Land Taxes

 

As a villa owner, you are subject to taxes on the revenue generated from rental bookings. Consult with a tax professional to understand your tax obligations and ensure compliance with local tax laws.

 

Rental villas in Bali are subject to taxes.

Photo by olm26250 in Getty Images

 

Land taxes usually cost way less than income tax. When you lease land in Bali, in most cases you pay the land taxes during the period of lease.

 

Owning and managing a villa rental in Bali can be a rewarding venture, but it requires careful financial planning. By acknowledging and accounting for the various expenses outlined in this article, you can run a successful and sustainable villa rental business in Bali.

 

Disclaimer: The information presented in this article is intended for informational purposes only. It should not be considered as a substitute for professional advice or used as a basis for making legal, financial, or investment decisions. Readers are encouraged to seek guidance from qualified experts or professionals before taking any actions based on the content provided in this article. The author and publisher do not accept any responsibility for any consequences or losses resulting from the use of this information