Lombok Property Market Potential

Bali Property Market Trends March 12, 2024 2 Min Read

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.

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Bali vs Phuket: Which is the Best for Your Next Property Investment?

Invest in Bali October 14, 2024 5 Min Read

Image by Tanarch on Canva

Two prominent destinations stand out regarding property investment in Southeast Asia: Bali, Indonesia, and Phuket, Thailand. Each location offers a unique blend of cultural richness, investment opportunities, and lifestyle benefits that appeal to foreign investors. Understanding the nuances of each market is crucial for making informed decisions. This comparison will explore various aspects of investing in Bali and Phuket, highlighting their strengths and weaknesses and ultimately suggesting why Bali may be a more favorable option for investors.

Property Ownership and Legal Framework

One of the most significant considerations for foreign investors is property ownership and the legal frameworks governing it.

Due to Indonesian law, foreign investors cannot directly own land in Bali. However, they have several options for acquiring property. The most common route is through leasehold agreements, which typically last for 30 years and can often be extended. Additionally, foreigners can establish a PT PMA (Penanaman Modal Asing), a foreign-owned company, which allows them to hold freehold ownership of property(InvestinAsia). This flexibility in ownership structures is particularly appealing for long-term investments in Bali’s burgeoning real estate market.

Phuket, on the other hand, offers a different set of challenges. Foreigners can purchase property, but they are restricted from owning land outright. Instead, they must establish a Thai company or enter into long-term leases, typically lasting up to 30 years, with an option to renew(Bali.RealEstate). While the legal processes in Phuket are manageable, the requirement for establishing a company can be a barrier for some investors, complicating the investment landscape.

Tax Obligations

Understanding tax obligations is critical for foreign investors as they can significantly impact profitability.

In Bali, the tax system is relatively straightforward. Essential taxes include the Land and Building Tax (PBB), which is relatively low, as well as the Property Transfer Tax and Value Added Tax (PPN), currently set at 11% for properties sold by professional developers (InvestinAsia). The low tax rates make Bali an attractive option for investors looking to maximize their returns.

In Phuket, the tax obligations are more complex. The Property Transfer Tax is set at 2%, and if the property is sold within five years of acquisition, a Specific Business Tax (SBT) of 3.3% applies(Bali.RealEstate). These additional taxes can erode profits and complicate financial forecasting for investors. The comparative simplicity of Bali's tax landscape could be a decisive factor for foreign buyers.

Market Growth Potential

Bali and Phuket have experienced growth in their real estate markets, but the trajectory and potential differ significantly.

Bali has seen a remarkable resurgence in its property market following the lifting of COVID-19 travel restrictions, drawing considerable foreign interest in vacation rentals and residential properties (InvestinAsia). The island’s tourism-driven economy contributes to ongoing demand, enhancing property values and rental yields. Bali's strategic focus on attracting international visitors—through wellness tourism, cultural experiences, and eco-friendly initiatives—positions it for continued growth in the coming years.

While still a popular tourist destination, Phuket has shown signs of market saturation, leading to slower growth rates than Bali(Bali.RealEstate)(Lazudi). The island’s reliance on mass tourism may pose challenges as competition increases, and investors could find it harder to achieve high returns in a crowded market.

Which one is better?

Bali and Phuket offer appealing property investment opportunities, each with unique advantages. Bali provides a flexible legal framework for foreign investors, allowing long-term leasehold agreements and the option to establish a PT PMA for freehold ownership; this flexibility can enhance investors' security.

While Phuket has charm and established infrastructure, Bali’s tax structure is generally more favorable, with lower property taxes than Phuket. Bali’s real estate market is also experiencing notable growth, driven by a resurgence in tourism after COVID-19. The island’s vibrant culture, stunning landscapes, and focus on wellness tourism make it a compelling destination for living and investing, catering to diverse preferences and lifestyles.

In summary, both locations have their merits, but Bali's unique blend of legal options, tax advantages, and lifestyle appeal make it a noteworthy consideration for property investors in Southeast Asia.

Where to Invest in Bali?

The real estate market in Bali offers a wide selection of properties, from luxury villas to minimalist studios or apartments. As one of the leading property agencies in Bali, we recommend you invest in Canggu, Seminyak, and Uluwatu. These locations are home to 5-star hotels and world-class beach clubs.

Canggu's pristine beaches are perfect for surfing, and its vibrant lifestyle makes it a hotspot for property investment in Bali. There are many selections of unique restaurants, high-end boutiques, world-class beach clubs, and international schools.

Furthermore, Uluwatu offers breathtaking views of the Indian Ocean's stunning coastline and is home to the majestic Garuda Wisnu Kencana statue. Additionally, Uluwatu is an excellent place to surf, as its beaches provide perfect waves for beginner and expert surfers.

Seminyak is a place for those who seek an upscale lifestyle. Its location offers beautiful beaches, a restless nightlife, and a wide range of delicate dining areas.

In addition, Seseh, Cemagi, and Pererenan are experiencing rapid growth in property development, making them ample locations for investment. Bali is renowned for its stunning natural landscapes, vibrant expat communities, and rich cultural heritage.

When considering real estate investment, Bali stands out with its expanding villa market and booming tourism sector. These make it an attractive option for those looking to achieve robust rental returns.

While Bali and Phuket present significant opportunities for property appreciation, Bali's unique blend of culture and natural beauty solidifies its position as a top choice for Southeast Asian investors.

So, have you secured your dream property in Bali? Take a look at our property collection and book a consultation with us.

Property Rental Yield in Bali

Bali Property Financing March 04, 2024 3 Min Read

This article discusses:

Bali emerges as an enticing destination for property investors, offering high rental yields fueled by its captivating landscapes and flourishing tourism.

This article elucidates the concept of rental yields, calculates Bali's average rental yields, explores factors influencing these yields, and provides strategies for maximizing returns.

By understanding Bali's rental property market dynamics and leveraging professional guidance, investors can capitalize on the island's real estate potential for long-term success.

Understanding Rental Yields in Bali

Rental yield serves as a pivotal metric for property investors, delineating the annual income generated relative to a property's market value. In Bali, where tourism thrives, rental yields notably surpass global averages, with an approximate 15% yield based on property purchase prices, compared to the global norm of around 5%.

Calculating Rental Yields

Bali's dynamic real estate landscape presents gross and net rental yield metrics. Gross rental yield offers a snapshot of income generation by dividing annual rental income by property purchase price. Meanwhile, net rental yield factors in additional expenses such as maintenance, management fees, and taxes, providing a more nuanced perspective on profitability.

Example Calculation:

Let's consider a property in Bali purchased for $300,000 and rented out for $45,000 annually.

1. Gross Rental Yield:

Gross Rental Yield

= Annual Rental Income/Property Purchase Price x 100

= $45,000/$300,000 x 100

= 15%

2. Net Rental Yield:

Let's assume annual expenses such as maintenance, property management fees, and taxes amount to $10,000.

Net Rental Yield

= ((Annual Rental Income - Annual Expenses and taxes) / Property Purchase Price) x 100

= (($45,000 - $10,000) / $300,000) x 100

= ($35,000 / $300,000) x 100

= 11.67%

(the numbers provided are only for exemplary means)

The example calculation underscores the favorable nature of rental yields in Bali. A gross yield of 15% and a net yield of 11.67% indicate strong income potential relative to the property's purchase price.

Factors Affecting Rental Yields in Bali

Several factors shape rental yields in Bali:

Location: Proximity to tourist hotspots like Canggu and Seminyak.
Property Features: Unique amenities like private pools or ocean views.
Property Type: Villas or apartments catering to diverse traveler preferences.

Maximizing Rental Yields

Investors in Bali can employ various strategies to maximize rental yields and enhance the overall profitability of their properties. Renovating or updating properties to meet the expectations of modern travelers, such as installing air conditioning, high-speed internet, or smart home technology, can command higher rental rates and attract more discerning guests. Additionally, partnering with reputable property management companies can streamline operations, minimize vacancies, and ensure optimal rental income throughout the year.

Investment Strategies in Bali's Real Estate Market

While high rental yields are undoubtedly appealing, investors in Bali's real estate market should consider their long-term investment strategy.

Investors can enhance rental yields by:

Property Upgrades: Installing modern amenities to attract discerning guests.
Effective Management: Partnering with reputable property management firms to optimize occupancy rates and rental income.

Seeking Professional Guidance

Navigating Bali's real estate market can be complex, especially for international investors. Seeking professional advice from local experts, including real estate agents, legal advisors, and tax consultants, can help investors make informed decisions and mitigate potential risks.

Bali's real estate market offers compelling prospects for investors, driven by high rental yields and robust tourism demand. By grasping rental yield dynamics, implementing strategic measures, and tapping into professional expertise, investors can unlock the full potential of Bali's real estate market for sustained success.

How Bedroom Quantity Influences Rental Earnings: A Guide for Villa Investments in Bali

Bali Villa October 28, 2024 3 Min Read

Bali’s rental property market constantly evolves, offering exciting opportunities for tourists and investors drawn to the island's natural beauty and lifestyle. A common question for investors is, “How many bedrooms should a villa have to maximize occupancy and return?” With strong profit potential, Bali’s rental market appeals to those looking to invest in property.

This article aims to give valuable insight into how the number of bedrooms affects rental prices and why investing in an extra-bedroom villa in Bali can be profitable.

Exploring the Charms of Villas in Bali

Renting a villa in Bali offers a unique experience. Villas range from cozy one-bedroom spaces to spacious six-bedroom villas. Many villas have luxury amenities, private pools, and stunning views, making them a top choice for tourists and long-term residents. Bali’s rental market is vibrant and competitive, with each villa offering distinct features to suit various tastes and needs.

Profit maximization in rental properties requires understanding the balance between bedrooms and the bottom line. While more bedrooms mean more profit, other costs, such as maintenance and property tax, must also be considered.

Comparison of Occupancy Based on Bedrooms

The daily rates of villas vary depending on the number of bedrooms. Villas are usually categorized into one-bedroom, two-bedroom, three-bedroom, and those with more than three bedrooms. Each type offers different amenities and prices to suit various needs.

1. One-Bedroom Villas

These cozy villas are great for couples or solo travelers. They usually include essential amenities like a private pool and kitchen, and their daily rates are generally more affordable.

2. Two-Bedroom Villas

Ideal for small families or friends, these villas offer more space and comfort. They often have larger living areas and outdoor spaces, resulting in slightly higher daily rates.

3. Three-Bedroom Villas

These villas provide ample living space and additional amenities, such as multiple bathrooms and bigger kitchens, perfect for larger families or groups. Daily rates vary based on location and services offered.

4. Villas with More Than Three Bedrooms

Designed for big gatherings, these villas can accommodate multiple families or groups and usually feature luxury amenities like private pools and gardens. Due to their size and premium offerings, their daily rates are higher.

We have calculated the daily rent rates for each villa category to better understand how these factors influence pricing.

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source: AirDNA

The graph reveals that one-bedroom villas have the highest booking counts, indicating strong demand, particularly from couples and solo travelers, while two-bedroom villas show consistent bookings, reflecting stable interest from small families and groups.

Moderate bookings for three-bedroom villas suggest a demand for larger family accommodations or groups of friends traveling together. In contrast, four-bedroom villas have lower booking counts, indicating less interest than smaller options and suggesting a niche market.

Five-bedroom villas cater to larger gatherings but exhibit modest booking numbers, and the category of six or more bedrooms experiences slight fluctuations, indicating their appeal for larger groups or events.

Revenue growth based on bedroom count is a critical metric in the rental property market. It measures the increase in income as the number of bedrooms in a property increases. Understanding this concept is crucial for investors as it can guide decisions on property size and potential revenue.

How to Boost Your Villa’s Occupancy Rate

In the competitive property market in Bali, a stylish and modern design is pivotal to attracting more potential renters or buyers. A well-designed villa improves aesthetic appeal and provides a comfortable, functional living space tailored to modern tenants' needs.

Key points include an open-space living room that blends seamlessly with the kitchen and dining room and thoughtful designs such as enclosed bedrooms for occupant convenience. Furthermore, focusing on interior design, such as adding premium appliances and bedding, can make a lasting impression on its renters or buyers. Investing in top-notch design leads to higher occupancy rates, increased rental income, and greater satisfaction for renters and owners.

For potential investors and villa owners in Bali, understanding these dynamics can lead to more informed decisions and better returns in the thriving rental market. Whether you want to rent or invest, recognizing the value of extra bedrooms can be the key to success in Bali's competitive real estate landscape.

Dreaming of moving to Bali and investing in prime properties? Look no further! At Bali Home Immo, we boast an extensive database of over 7,000 properties tailored to your needs.

Contact us today to arrange a consultation with our expert sales agents and take the first step toward your successful investment journey in Bali.

Established in 2009, Bali Home Immo is the first real estate agency in Canggu with more than 7000 Bali properties listed in its database. Bali Home Immo (PT. Bali Properti Kontruksi) is a licensed property agency (SIUP-P4 certified) located in Bali, Indonesia and have been successfully operating as a trustworthy and reputable real estate agency with more than 13 years of experience. Long-standing partnerships and a committed, dedicated team are the driving force behind the work that takes place every day at Bali Home Immo.

As a member of the Real Estate Broker Association of Indonesia (AREBI), Bali Home Immo Property offers luxury real estate across the region to a local and international client base. Catering to a wide range of property requests, the team will ensure they can find a property, land or residential listing, to match each client’s personal requirements.

We have curated a wide selection of properties ranging from the land for sale, villas for sale and rent, as well as commercial space rental in Bali's most in-demand areas including Canggu, Seminyak, Pererenan, Umalas, and Uluwatu. Not only Bali, but our connection also reaches other popular destinations in Indonesia including Gili Islands, Lombok, Labuan Bajo, and more.

We also provide professional marketing services that will showcase the best of your Bali properties to more than +160k social media followers and maximise the potential to find buyers looking at villas for sale in Bali. With a thorough knowledge of the Bali property market inside-out, we deliver the most professional and data-driven valuation of your property at the most competitive price for your Bali properties.

Our expertise in the local market and extensive network affiliated with 93 local and international partners including Goplaceit.com, Rumah123, Kangaloo, Luxury Estate, and many more will also help you bring global exposure to your real estate investment and find your dream Bali property. Looking to buy villas for sale in Bali? Check out our online catalogue of Bali real estate and follow us on social media for updates.