5 Things You Need to Know Before Renovating a Villa in Bali
Renovation properties can be a cost-effective measure to invest in Bali real estate, but some people end up breaking the bank because they underestimated the cost. While renovating a villa will increase the rental and resale value, it’s important to understand the downsides of buying renovation properties in Bali so you can maximize return on investment without spending too much. Here are some key aspects of renovating Bali villas that you shouldn’t overlook:
What are the drawbacks of buying renovation villas?
Most of the good deals in Bali are old villas in need of modernization, and it’s difficult to estimate how much the renovation will cost at first glance. The materials used in a 10-year old villa won't be as good as today’s standards, and it’s nearly impossible to judge the quality of a structure because you can’t see most of it. The villa could be built differently from the technical drawing (assuming it has one) and may have unseen damages such as leaky plumbing, so a detailed assessment is necessary before you can make a good estimation.
Furthermore, old Bali villas often don’t have building permits and registrations (ie. IMB/PBG, SLF) so they should be added as an extra cost. We strongly advise you to sort out all the administrative requirements for the safety of your investment. The fee to obtain the permit is not much compared to the overall renovation, and your architect can prepare the required technical drawings.
Also read: 17 Bali Property Sale Terms That You Must Know
What should I avoid when renovating a villa?
Renovating an investment property should be differentiated from renovating a home. If the villa is only for private use, then you can do whatever you please to make it truly yours. If it's for a rental investment, focus on improving features that will make the villa sell better and easier because the goal is to generate the most revenue by spending as little as possible. Keep in mind that short-term renters have different preferences from long-term ones, hence you should plan your renovation accordingly.
3 Bedroom Villa for Sale Leasehold in Seminyak
The scale of renovation is also limited by the villa’s original design, otherwise you will have to alter the structure and it will cost a lot. Beware that full scale renovation costs as much as building a new villa, so it’s best to minimize structural modifications and avoid remodeling an entire property. Converting a traditional Joglo villa into something more modern while keeping existing features such as the distinctive roof and building layout is great in concept, but expensive to carry out.
Also read: 6 Things You Must Know Before Buying Property in Bali
Is villa renovation worth the money?
Renovation improves the rental and resale value of a villa, even with only minor improvements. If you’re using it as rental property, we recommend doing small upgrades to make it more attractive towards renters. Enclosing the living room, renovating the bathroom, replacing the kitchen appliances, and adding more furniture are simple and cost-efficient improvements which can increase the villa’s rental value and appeal without making any structural changes. Upgrading a villa to modern standards allows you to charge higher rent and offset the renovation costs, but don’t spend too much or you’ll risk earning lower ROI.
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Looking for renovation properties in Bali? We have a handpicked selection of villas that will greatly benefit from improvements. Do you have any questions about Bali property or need some insights on villa investment? Please don’t hesitate to contact us.
Also read: How to Start an Airbnb Rental in Bali as a Foreigner
Disclaimer: The content of this publication is provided as general information only and does not constitute legal, financial, tax, or other professional advice from Bali Home Immo. Some of the information provided on this publication is obtained from a third-party source and we do not guarantee that the content of this publication is accurate, complete or up-to-date. Past performance is not indicative of future performance and should not be relied upon as a basis for an investment decision.
