Mastering Bali Rental Property Investment Part 1
If you are planning to invest in Bali property, you need to dive into the property market here on the island. Here are some tips to help you become a master in Bali rental property:
1. Be an expert on the market and local laws on foreign property ownership in Bali
Well, one thing is absolutely sure – you have to do your homework and collaborate well to begin your journey towards becoming an expert in the local property market! It may seem obvious – of course you need to familiarize yourself with the latest trends – but in reality, many investors don’t (or at least, not enough!) and mistakes are made along the way which may seem small and acceptable, but when you add them up they just may turn out to be enough of a force to impact your investment plans and send them off the rails.
Yes, it can be very lucrative to be a villa owner in Bali, renting out your new villa on the holiday rental market, however if you don’t know the market, you may just make one or two seemingly small ill-informed decisions which can turn your 10%++ investment into a rather ordinary 4-5%.
What area are you buying property? What are the prices of land and property in the area? Who are your competitors and what are they charging for per night? ? What are the unique selling points the villa(s) you are interested in? Who is your audience: expats or tourists? What’s the proximity toward the beach or other hot spots? Can you realistically achieve the ROI that you want with the property that you are considering? Investing in the trendy town of Seminyak or charming Lovina up in the north – it is a completely different world in every way thinkable. You and your team of advisors also need to know everything about the local laws and titles you can get on land and property as a foreigner so that you can ensure that you’ve invested in a property that can withstand legal scrutinization from the tax authority, the planning and and zoning board and of course the local banjar in which you intend to invest.
It would not hurt to learn from your sources the more common pitfalls people have been known to make so that you know what to avoid and what to gravitate towards.
2. Find out what property is right for you
First, you need to question yourself and find out exactly why you want to invest in Bali property. Do you want to reside in Bali in your own private villa or create a passive flow of income by renting your property out? In case you are planning to rent it out, do you want to rent it out to expats living in Bali or to tourists? The answers to these questions are of key importance. Why? Well, Bali has differing zones of which some are residential and some meant for tourism-related purposes. In a residential area, you will never get a license to rent out your villa. There are also ‘green belts’ where you will never get permission to build that gorgeous villa of yours. What property is right for your depends on the plans and goals you have for your property.
3. Finding the best agent in Bali
At the risk of stating the obvious, the agency that you choose to source villa options that match your brief is someone who will be very important throughout the process of not only finding and purchasing your dream villa, but they must also be capable of assisting you in the transition as you take over a new staff, a new marketing team and a new collection of contractors, electricians, plumbers and the like to look after your investment with you. You need to feel free to ask anything anytime. A good agent is knowledgeable and they can rely upon a mountain of experience to guide you along the way and create a realistic set of expectations on how the entire process works, if you work it properly.
More to come…
Final Thoughts (for now)
The right investment in the bricks and mortar is just the beginning. If you are going to align yourself with one of Bali’s top villa management companies, then the hard work is done once you’ve received your new set of keys. Turn the key and let the experts do it all for you. If you plan to self-manage, welcome to the world of hosting holiday makers in Bali. The progression of the process from sourcing the right photographer, creating an eye-catching description of the villa, being on hand for the meet and greet at check-in time, look for several ways of “upping” the UX as your guests’ reviews become the life blood of your investment. The more that you invest in your guests UX, the more willing your guests will be to take the extra few minutes to write a very positive review which will in turn create more business for you and your investment.