Bali Real Estate : Getting In & Out
Bali Property Report: Have You Got an Exit Strategy?
Now Just Might Be the Time to Make Sure that It Will Work
How to Win Your Match on the First Tee.
For those among our millions of readers (wink wink) who enjoy the game of golf, we think that you will appreciate the following analogy. For those who do not play the great game yet, the strategy within the analogy can be very useful not only for playing golf and buying real estate in Bali, but in a myriad of other ways as well.
A good round of golf often includes a small wager of some sort at the beginning of the round (on the first tee) after certain allowances for the disparity in each players’ talent have been made (ie. handicaps) are agreed upon. There may be a bit of cajoling, negotiating and bluffing as the wager is set. And this is where you win the bet before you hit your first shot! A little bit of this, a little bit of that, some back and forth, maybe a little bit of gamesmanship and voila, the game has been set. If you have done well, then you have created a favorable climate for the game ahead.
Buying Real Estate in Bali Can be Just the Same.
It is a fairly safe assumption to make that if you are reading this then you know of at least one person who has had an unforgiving investment experience here in the Bali property market. Investors of all types – new and seasoned – have either never had the less obvious risks pointed out to them or they simply chose to take on the risks because they felt that the return on the investment was too good to pass on.
Getting into the market is a fairly easy process if you’ve got the right guidance.
Getting out has proven to be another story altogether.
A proper exit strategy is custom designed for each investment – be it Hak Milik or Hak Sewa – and is often discussed in detail and determined at the time the initial investment is made. The profitable Hak Sewa strategy is actually going to be a little more complicated than a Hak Milik exit strategy, as lease term and conditions for actualizing the extension will impact the proposed timing the investor chooses to exit if maximizing financial returns is the primary objective.
This is where we feel you need to align yourself with a team that has the experience to help you create an exit strategy that is right for you and your family. While many investors sometimes take a less disciplined approach to managing their Bali asset than they might take in looking after their domestic assets, the mindset ought to be the same. There are many levers that get pulled prior to a final agreement on the terms and conditions of every transaction. Creating a structure within your agreements to allow you to maximize your return upon selling the asset is a critical part of the purchasing process. If managed properly, you’ll be in a position to make your best return when it comes time to sell.
In the meantime, the level of care and attention that you expect in your domestic properties is available here in Bali, and if selling your asset for a profit at some point in the future is the goal, it is best to assemble a team that you can count on in times like these when you cannot get up to see your place first hand.
Some ‘Less Obvious” Factors to be Considered Upon Acquiring a Hak Sewa/Leasehold Property in Bali
- Length of the lease extension term
- Method for calculating the lease extension price
- Timing proposed to discuss extension with the landowner (is he flexible?)
- Annual maintenance costs
Taken together with the obvious factors of location, size, purpose, paperwork, management, marketing and personal use, realistic and useful projections can be made to offer you the choices you need to acquire and manage your Bali asset to the fullest.
Contact Us Today to Learn More. +62 817 973 3031 (Patrick)