Do you dream of living in Bali? We understand why, because we do! Of course the first concern is to find the right real estate investment to recreate a home for you and your loved one in the long term.
How to do it?
What to watch for?
We tell give you some pointers.
From legal matters to location or facilities, investing in Bali is to be done with a fair bit of caution to avoid pitfalls that would turn your dream into a nightmare.
Simple but stunning villa in Sanur, with Kaltimber decking
The location
This is an obvious point to study extensively as both you and the potential guests renting your property will need the perfect location to enjoy the island at its best. You will learn that Seminyak and Canggu are the most popular, along with Kerobokan and Umalas. So try to answer these questions first:
Is it a popular area?
Any development projects?
How good is the surrounding area?
How far is the beach?
This last question is, believe us, the most important one if you are looking to get a good return on investment. Your future guests will first and foremost look at how far from the beach their home will be.
The surrounding area is also an important one as it needs to be as quiet as possible. Bali is a wonderful place, but it can be noisy at times, especially for places located near major roads or temples.
A lot of useful online resources to prepare your investment project
The law
As in every country, the law can be quite problematic when investing in a property. This is particularly true in Indonesia if you are a foreigner. Indeed, foreign nationals are not allowed to buy properties in the country. You might be offered something called “freehold” (known locally as Hak Milik) , but any free-hold transaction is unlawful. You can only lease land or a villa in Bali.
Another thing to be very mindful of is to be sure of the property to own a Building Permit (IMB) to build the villa (about 3 to 6 months to process).
Make sure to check whether the previous owners have paid their land taxes. You cannot apply for a building permit (IMB) or any other documents for land with unpaid taxes. If you aim for turning your property into a guest house or simply rent it, you will also need to apply for a Pondok Wisata.
Ownership
A crucial step in investing in land or property is to check who is the property’s landowner. Many land certificates in Bali are out of date, and may not have the current rightful owners listed; Make sure you are dealing with the correct landowner or a representative of the landowner or the consequences might be extremely challenging!
Also important: to choose the right contractors!
Budget wisely
The investment amount is to be decided very carefully as, in Indonesia as well, they can quickly get out of hand.in Bali, the price of construction should be between 500 to 1,000 USD per square metre, obviously depending on many factors, with the quality of materials to be an important one.
Part of this budget will involve your return on investment. On average, your villa should be repaid in 10 to 12 years of rentals.
Luxury too needs to be budgeted! Construction by kadecons
For all the points discussed above and more, the best is to connect with fellow expatriates because their experience in dealing with building and investing in Bali will be unmatched. They will also be able to advise you who to contract for building or/and managing your property.