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8 Top Reasons Why You Should Consider Bali Real Estate Investment in 2022
You might think that during the pandemic, it would be too risky for real estate investment on an island that gets its livelihood mainly from tourism. Truth be told, there’s never a better time than now, and below we have listed 8 top reasons why you should consider Bali real estate investment in 2022 and gain access to an easy lifestyle and considerable side income opportunities.
1. Indonesia is becoming the world’s 5th biggest economy
Indonesia is aiming to become the world’s 5th biggest economy by 2045 according to President Jokowi’s “Wawasan Indonesia 2045” agenda, and the economy is expected to bounce back to a 5% growth rate already during 2022. Indonesia’s capital is affordable compared to other SEA countries, and the country is expected to become a housing and commercial hub to rival China and India. On top of that, the villa rental market in Bali has been among the most lucrative in SEA. Thus, the long term real estate investment outlook is attractive.
2. The pandemic has brought down property prices
During the pandemic, an area like Bali has seen a 15-30 % drop in villa prices and an investor can choose from great real estate investment opportunities. Operational costs are still low, and especially the seasonal short-term rental market looks to be bouncing back with the revival of tourism. An investor can expect the ROI for a 3-bedroom villa to be as high as 8-10% per year, providing a return on investment in just 10-12 years.
3. Foreigners can own property in Bali
Whereas it is still true that a foreigner or a foreign-owned legal entity cannot own freehold land and property directly under the regular hak milik title, it is possible for a foreigner to buy freehold property and obtain the rights to the land under the hak pakai or hak guna bangunan licenses by either obtaining a residence permit (KITAS or KITAP) to Indonesia or setting up a company (PT PMA). Alternatively, it is possible to buy leasehold property. This means buying the rights to the land for a certain amount of time under the hak sewa title. All these licenses/titles allow you to sell, sublease or rent out your villa.
4. Domestic tourism in Bali is on the rise
Bali used to be considered completely reliant on international tourism, but in 2019, when the island welcomed more than 6 million international arrivals, it also saw more than 13 million domestic arrivals. And while at first the pandemic hit Bali’s tourism industry hard, the focus has now shifted to the potential of the domestic market. 2021 saw a steady increase in domestic tourism as well as short-term relocation. This adjustment of catering to domestic tourism is likely to continue even after international tourism returns.
5. Bali is a huge digital nomad hub
Bali’s beauty and easy access to western-level services and commodities, good schooling options and great activities appeal to the easygoing citizens of the world. Because Bali offers great internet connections and a multitude of co-working spaces and networking opportunities, more and more digital nomads have found their way here. Even during the pandemic, these online workers have continued enjoying the pleasant climate, relaxed lifestyle and lack of harsh restrictions. To attract city slicker Indonesians and foreigners, the Indonesian government launched a “Work from Bali”-program as well as introduced plans for Digital Nomad and Second Home 5 year-visas.
6. The new normal affects how tourists choose their accommodation
Speculations about tourism trends post-pandemic point towards growth in the villa rental market. Tourists still want to enjoy Bali’s socializing opportunities while being more safety-conscious, and as they wish to avoid the risks of large crowds in hotels, we expect to see an increase in larger villa or villa cluster rentals. Once the Indonesian entry regulations begin to ease, this can mean increased side income potential for short and medium term villa rentals.
7. A professional real estate agency can help you with all the steps
To avoid wasting time and losing money on your investment, you should turn to a professional real estate agency. A professional real estate agency is not all about making commission but instead their prime motivator is dealing with your needs. A good agent is happy to educate you about the property market and where they can see the most value. They will find you suitable villa options, negotiate the price and prepare the contracts. They will also point you in the right direction for reliable legal professionals, home inspectors et cetera.
8. You can hire a villa management service to manage all operations
If you invest in a villa in Bali but do not reside here full time, you most likely want to make side income by renting out your villa during the time you are away. That means you’ll need someone to handle the villa maintenance, staff and utilities and who allows flexibility in their terms and conditions. To avoid having issues with renting out your villa on platforms such as AirBnB especially if you don’t have a PT PMA or KITAS/KITAP, you’ll need someone to help either take care of the marketing, payments and possible complaints or other issues or at least having them as a legal vehicle for the marketing.
If you wish to proceed with Bali villa investment, us at Red Lotus Property would be happy to answer any questions you might still have and help you find your dream villa.
Red Lotus Property is headquartered in Bali, Indonesia, with a mission to help people interested in buying, selling or renting residential and commercial real estate as well as looking for villa management services. We are passionate about listening to and accommodating our clients’ requests. Because we apply the authentic local touch, you can always feel safe when doing business with us. We deliver solutions and peace of mind to our clients and help them find the best way to prepare for the future.
If you’re thinking about property or lifestyle investments in Bali and need some professional and friendly advice and guidance, feel free to visit our office in Ubud, send us an email to info@redlotusbaliproperty.com or check out our property website, villa rentals and management website, LinkedIN or Facebook.
