A guide to open Airbnb in Bali as foreigner

 

Bali proves its resilience and remains in Tripadvisor’s top 5 popular destinations in the world this year, after previously holding the number one spot in 2021. Tourists from all around the world have been looking forward to visiting the island, and most of them can now come because quarantine-free international travel to Bali has been reinstated for 23 select countries. With that said, we perfectly understand if you want to seize this opportunity and rent out your villa on Airbnb to welcome those eager travelers.

 

Vacation rentals prospered in Bali thanks to tourism, and this development is a positive sign that the short-term rental industry could return to its highly profitable state very soon. Before you jump into the Airbnb business, let’s take a quick look at Bali’s vacation rental market and how you can start your own rental.

 

How is Bali’s short-term rental market?

 

Before COVID, the vacation rental market was flourishing more than ever. Over six million international tourists visited Bali in 2019 and the island still managed to attract one million tourists in 2020. Demand was at an all time high and steadily grew with Canggu in the lead, and experts are confident that Bali will recover quickly and grow even bigger than before once international travel is completely restored.  It’s also worth noting that, unlike other touristic regions, Canggu was not severely affected by the pandemic thanks to digital nomads and long-term tenants staying in villas.

 

Average demand growth based on bookings made in 2017, 2018, and 2019

Source: AirDNA

 

Since Bali’s borders reopened, the number of international arrivals has increased by 13,62% in the first quarter of 2022. Combined with the government’s efforts to ease travel restrictions even further, this could be the beginning of the long-awaited return of Bali’s tourism. 

 

Also read: Bali rental market in the first quarter of 2023

 

Is it profitable to open an Airbnb in Bali?

 

Yes, always has been. Back in 2017, The Telegraph reported that the average yearly earnings of Airbnb listings in Bali was over $40.000, beating out major cities including Tokyo, Barcelona, and London by a landslide. There was a significant increase in monthly revenue from 2017 to 2019, particularly for villa rentals in Canggu where the average growth was around 20% per year. This combined with the increasing demand could potentially yield better outcomes considering that Bali is starting to welcome travelers again.

 

Average monthly revenue in 2019

Source: AirDNA

 

As stated in a previous article, villas are excellent for investment because the average forecasted ROI in Bali is between 8-12% depending on the location, with Seminyak villas offering the best return potential closely followed by Canggu. Villa prices in Bali remained stable despite the pandemic, with only a few properties actually dropping in price because most owners chose to rent out rather than sell during this period.

 

Also read: 6 Things You Must Know Before Buying Property in Bali

 

How do you open a vacation rental as a foreigner?

 

Having the appropriate building permit (known as IMB or PBG) and business license is necessary to run a daily villa rental in Bali. Villas typically have a Rumah Tinggal (residential) permit, whereas a vacation rental requires a Pondok Wisata (homestay) permit. It’s important to note that Pondok Wisata can only be obtained by an Indonesian citizen and can only be applied on properties located within a tourism zoning, thus you will need to acquire a property that already has a Pondok Wisata permit if you plan to rent out immediately. If you're interested, we have curated villas that already include a Pondok Wisata permit here.

 

3 Bedroom Villa For Sale Leasehold Near Batu Belig Beach - L132

 

As for the business license, you can set up or acquire a foreign owned company (known as PT PMA) in the Hospitality Management Consulting classification. Having a company offers several advantages including the ability to acquire freehold properties in the company’s name.

 

Also read: How to Acquire a Property using a PT PMA

 

Feel free to browse our collection if you're looking for villas suitable for a short-term rental business, and do not hesitate to contact us for more information about investing in villas or Bali real estate related topics.

 

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. Past performance is not indicative of future performance and should not be relied upon as a basis for an investment decision. Some of the information provided in 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.

Lombok is gearing up for substantial growth, backed by a strategic position as one of the nation's top five priorities. The government's ambitious projects, such as the Mandalika F1 circuit and a new international airport, underscore their commitment to transforming Lombok into a premier destination. Recent accolades, including Lombok's 5th place ranking on TripAdvisor for the best nature destination, validate the island's diverse attractions, ranging from pristine beaches to world-class surfing and diving spots.

 

Developed Infrastructure

 

In terms of infrastructure, Lombok has made significant strides, particularly in road development, contributing to enhanced accessibility. The Mandalika International Circuit adds a year-round appeal, attracting various activities and events to the region. Investors eyeing land for development are drawn to established locations like Kuta and Selong Belanak, prioritizing ready-to-develop areas over speculative land purchases.

 

Future Obstacles

However, challenges persist. Limited international connectivity, especially from key markets like Australia, poses a hurdle to Lombok's global accessibility. The island also grapples with the difficulty of finding, training, and retaining skilled talents, hindering the seamless development of its tourism industry. In terms of food and beverage establishments, concentration in areas like Kuta Lombok leaves room for growth, with a noticeable absence of food delivery services.

 

Steadily Increased Occupancy

 

Analyzing the data from AirDNA reveals promising trends in occupancy and revenue growth for the Central Lombok Region, with a steady pace of +20% occupancy rate and a remarkable +66% increase in revenue compared to the previous year. This positive trajectory aligns with Lombok's reputation as the 5th best nature destination on TripAdvisor.

 

The Big Question

 

In conclusion, while Lombok undeniably possesses immense potential, it will take more than the F1 race to propel it to its full speed. The current landscape presents a unique opportunity for investors, with increasing occupancy rates and a strong reputation as a nature lover's paradise. The question remains: Is now the opportune time to invest, or does a cautious 'wait and watch' approach make more strategic sense? Only time will reveal the full extent of Lombok's ascent in the global tourism arena.

If you’re interested in taking part in the steadily growing Lombok’s property market, take your move and choose the right investment based on your preference. In Bali Home Immo, we provide a smooth-sailing investment journey, from property search to post-purchase support, we ensure to cater to these needs. Find your suitable Lombok properties here.

10 Crucial Considerations Before Buying a Villa in Bali

 

With its stunning landscapes and vibrant culture, Bali has become a sought-after destination for expatriates looking to invest in a villa. Before you embark on this exciting journey, you must be well-informed and make prudent decisions. Here are 10 key considerations for those who are contemplating the purchase of a villa in Bali.

 

1. Location Matters:

Selecting the right location is paramount when investing in a villa. Consider the proximity to popular attractions, beaches, and amenities. A balance between tranquility and accessibility to Bali's vibrant lifestyle is crucial. Areas like Seminyak, Canggu, and Umalas offer a mix of both, ensuring a perfect blend for a comfortable living experience. 

1. Rental Potential:

For those looking to make their investment work for them, assessing the rental potential of the villa is vital. Bali's booming tourism industry makes short-term rentals a lucrative option. Investigate the demand in the chosen area and ensure that the property management services are reliable for seamless income generation. Here's how you can forecast the rental potential based on the daily rate. 

1. Amenities and Design:

The allure of Balinese villas often lies in their unique design and luxurious amenities. Evaluate the villa's layout, the quality of materials used, and the presence of modern conveniences. Pools, lush gardens, and spacious living areas enhance not only your living experience but also the property's appeal to potential renters.

 

1. Land and Building Size:

Understanding the size of both the land and the building is crucial to ensuring your investment meets your expectations. A larger land size may provide more privacy and space, while a well-designed and efficiently used building space maximizes the villa's functionality.

 

1. Ownership Title/Leasehold:

Clarifying the ownership title is a critical step in the buying process. Ensure the villa has a proper freehold title or a secure leasehold arrangement. Legal assistance is highly recommended to navigate complex Indonesian property laws and safeguard your investment.

 

1. Infrastructure and Access:

Check the local infrastructure to ensure a comfortable living experience. A well-maintained road network, reliable utilities (water supply, electricity, drainage), and access to essential services contribute to the overall desirability of the location. Additionally, proximity to the airport and major transportation hubs is a practical consideration for frequent travelers.

1. Local Regulations and Zoning Laws:

Understanding and complying with local regulations and zoning laws is imperative. Verify that the villa adheres to the zoning regulations, and be aware of any restrictions that may impact your intended use of the property. This step is crucial to avoid legal complications in the future.

1. Surrounding Developments:

Research ongoing and planned developments in the vicinity. Upcoming infrastructure projects, commercial establishments, and residential developments can significantly impact the property's value and desirability. Choosing an area with positive growth prospects ensures long-term returns on your investment.

1. Budget for Maintenance and Renovation:

Factor in the costs associated with maintaining and potentially renovating the villa. A well-maintained property preserves its value and attracts better rental opportunities. Be prepared to invest in periodic maintenance and upgrades to keep the villa in optimal condition.

1. Reliable Seller: 

Last but not least, reliable seller. When navigating the intricate process of purchasing a villa in Bali, it's highly advisable to engage the services of a reputable real estate agency. A reliable agency acts as your trusted partner, guiding you through legalities, negotiating on your behalf, and offering valuable insights into the local market dynamics. Take the first step towards your dream villa in Bali – reach out to us and begin your investment journey with good advice. 

 

Investing in a villa in Bali is a thrilling endeavor that promises a unique blend of culture, luxury, and potential financial gains. By carefully considering these 10 crucial factors, you can make an informed decision that aligns with your investment goals and ensures a rewarding experience on the Island of the Gods.