Bali Property Market Exit Strategy (Part 2 of 2)
Getting In & Out of the Bali Property Market
How Good is Your Exit Strategy?
Part 2 of 2
Let us assume that you are either already a property owner here in Bali or that you have decided that you want to get into the market and you’ve got your brief ready to go. If you are the latter, use your imagination to fast forward a bit and create a scenario where you are keen to sell your villa. If you are of the former, you may be one of the many who intends to list, or perhaps you already have, placed their property for sale on the market for sale.
As discussed in Part 1 last week (see below), on a Hak Sewa/Leasehold property there are a wide range of factors to be considered and negotiated with respect to the leasehold extension. In some cases, if you have been a bit diligent, you may be able to offer your 15 year leasehold for sale as a 25 year leasehold. This of course depends on how well you negotiated your lease and your lease extension terms and conditions upon acquisition and how well you have managed your relationship with the landowning family. If you have purchased a Hak Milik/Hak Pakai/HGB title then you need not concern yourselves with lease extension costs and timing. You own the asset, you sell the asset. No capital gains tax in Indonesia.
Part One : Getting in and out
What Else Do I Need to Know as I Prepare to Exercise my Exit Strategy?
You may recall that at the time you purchased your property, you were buying a property in a market that has been a buyers’ market since its inception. There are several hundred villas for sale in Bali; Hak Sewa and Hak Milik alike. Big villas, small villas and all sizes in between. East coast, west coast, northern coast, Ubud and more. How will your listing ever stand out amongst the thousands?
High Resolution Imagery
In this day and age, sub par photographs taken by real estate agents simply will not cut the mustard. Get professional photography and videography done. It is less expensive than you think, and professional work always helps to tell a more effective selling story. Calls to mind, “…if you think hiring professionals is expensive, try hiring amateurs.”
Good Financial Reports
As most properties in Bali are dual purpose; some personal use along with a managed booking system/villa management system; keeping proper P&L’s will only make your job of selling the asset that much easier. Apart from having all of your taxes paid and your licenses current, an easy to read complete P&L will be one of your greatest selling tools.
A strict interpretation of staging is the total “de-personalization” of your home, removing all personal items like photos, old ‘comfy’ furniture and all of the knick-knacks you’ve collected along the way and present your home for sale with minimal clutter. We realize that this may not be practical if you have an investment property that is full of character and charm, but do what you can. Your tastes and preferences are going to be different from those of the person that buys your villa, so remove for them any barriers that will disallow them from seeing your home as “theirs”.
Vendor Paid Advertising
We realize that the open listing policy in Bali – wherein as a vendor you have the option to list your property for sale with as many agencies as you want – is likely to be a bit different from how you would list a home for sale in your home country. In your home country you would choose ONE agent and then use that agency and some of your own money for marketing. It is not an uncommon occurrence that as a seller, once you’ve chosen your listing agency, you write a check for marketing that might be as low as $5000, but could also be $10K, $15K or even more.
Bali Nirmana Property has been running a VPA campaign for 2 years now and we have managed to keep our costs and yours at just a fraction of what we might expect to have to invest back home. After our 3 month period of getting our Google algorithm training, we began to get results. Our vendors have nearly all been quite pleased. Sure, even after months and months of ringing phones and knocking on virtual doors, there are still a few villas that we just cannot seem to find buyers for yet, so to supplement the vendor’s commitment to us, we continue to run their ad campaign on Google at our own expense once their initial investment into the program has expired.
There are two times to advertise your villa for sale. When the market is brisk, and when the market is slow. The days of simply listing your property on an agencies’ websites and hoping that someone finds it are waning. This is the age old real estate question…..Do you want to sell your property or do you just want to see if someone wants to buy it?
If you read Part 1 last week, then you know that the foundation for much of the above-mentioned work had already been laid at the time that you acquired the asset. (see the link below for Part 1). With a bit of patience, guidance, diligence and determination, you too can “win the match on the first tee” and enjoy years of Bali holidays and constant revenue without having to concern yourself with the dramas that surround so many as they try to get out of what they got into. #stayhomestayhealthy