What You Need to Know About Property Title in Bal

If you don’t want to be a landlord or prefer to sell rather than rent out, you can buy off-plan villas and then resell them upon completion. Buying off-plan means that you’re purchasing a property before or during its construction at a lower price, and then you can sell it again at a higher price after it’s finished. There are more risks in buying off-plan compared to buying a finished villa, but buying the project from a trustworthy agent and a reputable developer is key to this kind of investment. 

What about investing for passive income? Then turnkey properties are the answer. These types of property are offered with a management program that handles the operation, maintenance, sales and marketing of the villa while the owners are allowed to stay in the property for a certain duration every year. That way, you will have a fully serviced vacation home that generates rental income without having to lift a finger.

How much does it cost to buy property in Bali?

As discussed in a previous article, the price of a newly built modern villa on a 3 are land in Berawa offered with a 25 year leasehold starts from $300.000 whereas land price in the area is around $1000-$1700 per are per year. Property prices in tourist areas such as Seminyak, Kuta and Canggu are very high, hence you should consider regions such as Padonan, Babakan, Pererenan, Cemagi, or Tumbak Bayuh for inexpensive options.

There is a wide variety of more affordable alternatives available if you don’t have the budget for a brand new villa. If you don't need large space, consider investing in apartments instead as you can find good ones priced between $60.000-$150.000 in Canggu and the surrounding areas. Alternatively you can choose to buy an older villa and then renovate it, which will be more time consuming but can save you a lot of money. Regardless of which option that you choose, it’s possible to invest with a budget of $150.000 or less.

Luxury and beachfront properties are expensive (starting from $500.000 and up) but the price is justified by their higher rental and occupancy rate. It’s really difficult to find beachfront villas for sale in Bali because they’re fairly easy to rent out and owners wouldn’t willingly sell such a profitable investment. Luxury villas for sale are easier to find, but you need to assess the property’s financials first to determine whether it’s a good investment or not. One way to achieve this is by requesting an ROI forecast from the developer or the real estate agency that lists the property.

Note that you will also have to take 5% transfer tax for freehold purchases and notary fee into account as well. Luxury houses (priced ~$1.38 million and above) and condos (priced ~$690.000 and above) are subject to 20% sales tax on luxury goods.

How do I buy property in Bali?

The process of acquiring property in Bali can be safe and straightforward if you work with partners that you can trust in securing your investment. Indonesia’s legal system is very different and you have to get good legal advice before committing to any decision. A professional real estate agency is the place to go as they can guide you through the transaction process, appoint a reliable legal advisor, provide useful investment advice, find properties that match your search criteria, and help you rent out or resell your property later on.

Avoid buying properties from questionable sources and using risky methods such as the nominee arrangement, the only safe approach of acquiring property is either with a leasehold or a foreign investment company (PT PMA). Foreign individuals have the right to rent a property in Indonesia, whereas establishing a PT PMA demands a lot of resources but provides greater freedom and better protection.

What should I do next?

Sit back, relax, and enjoy the island life. Consider renting out your villa occasionally or when you’re overseas for cash flow and your property won’t be unattended while you’re away. If you choose to sell the house in the future, asking for a valuation from real estate agencies will reveal the property’s market value and having the right price will increase the likelihood of selling quickly. 

Should you hire a property manager or manage the rental yourself? Handling a rental property requires constant attention and not everyone has the time or energy for that. For a hassle free experience, hire a trustworthy management company that will ensure your property is well managed by providing full-time support including sales, marketing and operational support so you can focus on everything else and enjoy the rental returns.

For more information on investing in Bali property or real estate related matters, do not hesitate to contact us as we’re more than happy to help.

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?”