Bali Property Report – What’s Happening In The Market Today?

Recovery 2021
What Will it Take to Be Ready?
Part 2 of 2 

6 Steps To Take Now To Prepare To Buy a Villa in Bali This Year

Is 2021 the year you become a villa owner? Or make that long-overdue trade up to a larger home that fits your expanding family or to satisfy your growing demand for more self-generated and autonomous income ?

Buying a villa in Bali is the largest financial transaction most of us will ever make and it is likely going to be the largest assets that we ever own. The process can be a long, tedious journey with plenty of twists, turns, and delays along the way—which means you should start now.

Begin with these steps to start laying the groundwork immediately, because some of them take time to complete!

1. Improve Your Understanding of How You Can Use Your Self-Managed Super Annuation Fund or Your Home Equity to Invest Overseas

If you want to buy a house this year, then this is a very good year to accelerate your diligence.

  • Yes, your SMSF can acquire property in Bali.
  • Yes, you can use your equity in your home to finance an investment in Bali.
  • Yes, you can even get a mortgage here in Bali if you choose.

Which way is best for you? Only you and your advisors/partners can answer that one. But answer it you must, as it is the first step towards realizing that dream of owning a villa in a tropical paradise such as Bali.

2. Save a Boatload of Money
If you want to buy a house this year, then this is the year you need to get serious about savings.

     Living overseas costs a fraction of what it costs to live where most of our readers currently reside. Bali is wall to wall with good options that allow your annual salary to go twice or three times as far. And the “Stay & Earn” Potential here is amazing, with dozens of properties that allow you to reside on one part of your ‘estate’ while you rent out the other.

Holidaying ANYWHERE in 2021? Consider house-swapping rather than paying retail for AirBnB or a hotel room or two.

Based on how well you have managed with Point #1 above, you might have all of the funds that you need already at your fingertips. Fantastic. As the Bali real estate market is primarily a cash business,  the process of securing a mortgage is eliminated and you have all the arrows you need in your quiver to move ahead.

At settlement, you need only be prepared to have an extra 1% in your pocket to cover the notary fee. Other than that, (and the purchase price) you’ve got no other costs as a buyer. Of course you’ll want some reserves for repairs and refurbs.

3. Explore Less Expensive Options
If you want to buy a villa in the hipster village of Canggu, the very reliable tourism hub of Central Seminyak or on the southern cliffs of the Bukit, you need to save a lot more money. The average villa price for anything larger than 3 or 4 bedrooms and a quarter acre (1000m2 plot) of land is over USD 1 million, unless the property is on a lease that is too short to be considered commercially wise.

Drive 5 minutes from each of those three locations and your average price for the same (apples and apples) villa is roughly 1/3 of that million bucks. Much more bang for your buck, less traffic, fewer neighbors.

Stop thinking so rigidly, and start exploring other places to live than where you live now. One dynamic that this lockdown quagmire has fostered is the retreat to the suburbs.

The exodus from such cities as New York, Melbourne, Singapore and London has spawned the new suburbia in northern California, the Yarra Valley, Bali and almost ANYWHERE outside the UK as WFH has become a more widely accepted practice and the initial inefficiencies have been slowly eradicated as processes are more streamlined and people’s familiarity with Zoom meetings, video walk-throughs and remote purchasing/meeting has become more commonplace.

4. Reframe Your Affordability Calculations
The average person calculates affordability by asking themselves “What’s the most I can afford to spend on housing?”
Another way to consider approaching your next villa might be to ask “What’s the least I can spend on housing and still be happy?”

I do not outright own any real estate in Bali. Over the 18+ years that we have lived here, our housing costs have totalled USD25,000 – including improvements; 2 renovations and a swimming pool. Using a combination of AirBnB and other rental portals, we have managed to nearly ‘zero cost”  our housing since we arrived in 2002. It has taken a bit of manoeuvring, but it is possible.

5. Consider House Hacking
No one says you have to pay for housing at all.

In the  classic house hacking model, you buy a multi-family, move into one unit, and rent out the other(s). Bali has an abundance of 2, 3, 4 or more villa compounds that provide a perfect canvas on which to paint your “Stay & Earn” lifestyle.

6. Find a Real Estate Agent
When you have your cash in order, a target market selected, and a better understanding of how the entire process works, you can finally start house hunting.

Look for an agent who specializes in your precise market, down to the neighborhood level. You also want someone patient and friendly, who’s willing to traipse through dozens of prospective homes with you without making passive-aggressive comments. If you are reading this article, then you need look no further. : ))

An experienced real estate agent also come with a network of trustworthy professionals such as home inspectors, contractors, lenders, and all the other people you need for a smooth transaction. Real estate is a team sport, after all.

Final Thoughts
There are literally hundreds of options from which to choose. By and large, the clever folks who have developed “Stay & Earn” estates here in Bali have done very well for themselves. Whether the estate is held on a lease or under the Hak Milik/HGB title, the combination of very attractive ROI and the tropical lifestyle are very hard to beat. Whether you are looking to enter the market with less than USD 500K, or more than a million, the options that await you are plenty. Start looking now.


suggested reading

Buying From Abroad – Are People Doing That



Contact Patrick on +628179733031/[email protected] to learn more about any of the topics above.