Buy Villa in Bali: Honest Guide about ROI and Foreign Ownership

The Bali property market is hotter than ever, with “For Sale” signs popping up in every trendy neighborhood. The listings are tempting, showcasing stunning modern villas at affordable prices. However, there’s a complex strategy that you need to be aware of before actually buying a villa in Bali.

In this ultimate guide, we uncover every honest tip, facts, situation, and considerations that hopefully will help you make a solid decision. We’ll talk about the current Bali property market situation, steps to take, pricing, challenges and risks that many other real estate agents try to hide from you. 

By the end of this tutorial, you will be more confident in buying your dream property. Let’s go!

Key Summary (TL;DR)

If you’re considering to buy villa in Bali, our advice are:

• Define Your Goal: Are you looking for a pure investment with the highest possible ROI, or a lifestyle property that you can enjoy for part of the year? Your answer will shape your entire strategy.
• Understand Leasehold: Don’t just accept it; understand it. Know exactly what happens at the end of the term and what your extension options are.
• Do Your Homework: Perform thorough due diligence on the property, the developer, and the land title. Never skip this step.
• Work with a Trusted Partner: The Bali real estate market can be tricky to navigate. Working with a reputable agency that has your best interests at heart is non-negotiable.

Is Buying a Villa in Bali Still a Good Investment?

Yes, purchasing a villa in Bali remains a smart investment in 2025. The Bali property market still presents unique opportunities that offer both strong returns (8-20% ROI) and lifestyle benefits.

Bali enjoys high occupancy rates for both short-term and long-term rentals, typically ranging from 65-80%. Luxury villas are in high demand today, fetching premium prices because of their prime location, amenities, and appeal.

Aside from financial gains, Bali provides the unique chance to own a dream home in a paradise setting for foreigners. Imagine living in a luxurious beachfront villa or a peaceful house in the jungle – isn’t that a lifestyle upgrade like no other?

Things to Consider Before Buying a Property in Bali

Bali is indeed a top global tourism destination, making it an excellent place for property investment–even for the young and beginners. However, achieving success requires careful planning, selecting the right location, and understanding local regulations. 

Here are several things to consider before you look up any available villa listings:

1. Can Foreigners Actually Own Property in Bali?

Let’s be crystal clear: Indonesian law states that freehold ownership (Hak Milik) is reserved for Indonesian citizens only. 

You may hear about foreigners using a local “nominee” to put the land title in their name. However, this practice is illegal and extremely risky. It offers you zero legal protection and you could lose your entire investment.

So, the only secure way for a foreigner to have long-term control is by setting up a foreign investment company or PT PMA. 

For most people looking to buy a villa in Bali, leasehold is the most common, cheap, and straightforward legal structure.

Read More: What Investors Must Know About Leasehold Investment in Bali

2. What is the Best Location to Build a Villa?

The next common question asked by prospective buyers is about location. You may also wonder about the best areas to invest in Bali, especially when there are many interesting places to pick from that are favored by expats.

According to our research when helping clients in Bali, here are the top 10 best places to build or buy a villa:

1. Canggu
2. Seminyak
3. Uluwatu
4. Umalas
5. Nusa Dua
6. Jimbaran
7. Ubud
8. Seseh
9. Munggu
10. Sanur

Honestly, picking a location needs thoughtful consideration. What others choose may not be suitable for your needs, goals, or budget. For starters, you can check our full report to get clear picture regarding pros and cons of each area: 10 Best Areas to Invest in Bali Real Estate 2025.

If you want to go the extra mile to collect more data, we strongly recommend contacting real estate professionals or the expat community to ask further, detailed questions.  

3. When Should You Buy Villa in Bali?

​​Typically, the low season offers a great opportunity as prices tend to be lower and there’s less competition. However, it’s wise to choose the perfect time based on your objectives (such as investment, personal use, or both), budget condition, and market trends.

Many new investors often forget to do this research, and think that it’s okay to buy villas anytime. While there’s nothing wrong with buying a property anytime you want, if you plan to invest and get a high ROI, isn’t it better to enter the market when prices are lower?

Take into account factors such as rental demand, property type, and your long-term plans before finalizing your decision.

4. Is It Better to Buy or Build a Villa?

Deciding whether to buy or build a villa in Bali depends on factors such as your budget, timeline, and desire for customization, as well as your risk tolerance. 

Buying provides a quicker and more convenient option, while building offers the opportunity for a personalized design and potentially greater returns. You can read this reference to understand key factors about buying or building a villa: Buying vs Building Villa in Bali: 9 Key Factors to Consider.

How to Buy a Villa in Bali: Easy Step-by-Step

There are two ways to buy a property in Bali: off-plan villas and ready-built villas. Each step has a different process, here’s the breakdown:

Buying Off-Plan Villa in Bali

1. Find a Reputable Agent or Lawyer

Find a trustworthy local agent or lawyer specializing in Bali property laws to guide you through the process. They will help you navigate the complex regulations and ensure everything is legally sound.

2. Conduct Due Diligence

Verify ownership and check for any land disputes, zoning restrictions, or environmental issues. Your agent or lawyer will handle this crucial research to ensure you’re not facing legal headaches.

Read More: Due Diligence: One Step You Mustn’t Skip if You Invest in Property in Bali

3. Negotiate Terms

Negotiate leasehold or PT PMA purchase terms, depending on your situation. Your agent will help you determine the best approach for your investment goals and budget.

4. Complete Paperwork and Permits

After agreeing on terms, complete all necessary paperwork, permits, and legal documentation. Your lawyer will guide you through the process to ensure everything is done correctly.

Read More: The 2 Permits Every Bali Villa Investor Needs to Stay Legal

5. Register with Local Authorities

Finalize your lease or purchase by registering the agreement with local government offices. This step ensures your legal rights are recognized under Bali’s property system.

Buying Already Built Villa in Bali

1. Work with a Trusted Agent

Hire a real estate agent who specializes in expat transactions, like Bali Villa Realty. Real estate agent will help you find villas that meet your needs and ensure you follow all legal procedures correctly.

2. Conduct Villa Inspection

Inspect the villa thoroughly for any issues, including structural problems and legal complications. Your agent will arrange for professional inspectors to assess the property’s condition.

3. Negotiate Purchase Terms

Agree on the purchase price and leasehold conditions with the villa owner. Your agent will help negotiate the lease terms, usually 25-30 years, and clarify any associated costs.

4. Hire a Lawyer for Contract Review

Hire a property lawyer to review all contracts and legal documents. They will ensure the agreement is fair and protect your rights as the buyer or leaseholder.

5. Finalize Sale and Register with Authorities

Once all the contracts are approved, it’s time to make the final payment and officially seal the deal to get the villa in your name!

Your legal team will complete all the money transfers, pay any taxes/fees required, and get the official stamp from the National Land Office. This legally registers the villa under your ownership entity’s name.

BONUS: Explore Available Villa For Sale in Bali Here!

Ready to find your dream villa in Bali? The easiest way to explore a wide range of properties for sale is through Bali Villa Realty. 

Bali Villa Realty offers villas in Bali’s most popular locations and a variety of options—leasehold, off-plan, and even monthly or yearly rentals.

Whether you’re seeking an investment opportunity, a personal retreat, or a luxurious property, we have something to suit your needs.

Complete Catalogue: Browse Listings by Bali Villa Realty – Discover Your Dream Villa Here!

Total Price of Buying a Villa in Bali

The cost of purchasing a villa in Bali varies significantly based on factors such as location, size, and property type, with prices ranging from $150,000 to over $3,000,000. 

Basic, smaller villas in less central areas may start around $150,000, while high-end villas in prime locations like Seminyak or Canggu can easily surpass $1,000,000. 

For example, here is the price comparison of villas from top locations in Bali:

Source: Bali Villa Realty

Are There Any Hidden Costs?

The property price is just the beginning. To get a true picture of your investment, you have to factor in ongoing costs:

• Taxes: You’ll need to pay land and building tax (PBB) annually and income tax (PPH) on your rental earnings.
• Management Fees: Unless you plan to manage the villa yourself, expect to pay a company 15-25% of your rental income.
• Maintenance & Utilities: Pools need cleaning, gardens need tending, and things break. Budget for regular upkeep, electricity, Wi-Fi, and other bills (estimation: 10% to 20% of monthly rental income).
• Notary and Legal Fees: Notary fees are usually around 1% to 2.5% of the property’s value.

Read More: Cost of Property in Bali: What You Need to Know

The Real ROI (Return of Investment) of Owning Villa in Bali

The big promise of Bali real estate is passive income from rentals. Experts suggest that annual returns (ROI) can range from 8% to 20% in prime areas. This is driven by Bali’s booming tourism and the influx of digital nomads.

However, these figures come with big “ifs”. Your actual return depends heavily on achieving high occupancy rates, which is getting harder. The market, especially for 1 and 2-bedroom villas, is becoming saturated lately. You’ll be competing with hundreds of other listings, so top-notch marketing and management are essential.

But that doesn’t mean you should avoid buying a villa or give up right away. There are still many effective strategies to achieve maximum ROI—we’ve applied these strategies for our clients, and surely, you can too:

• Choose the Right Location: The location is crucial for rental demand and property appreciation. Popular areas offer high rental yields, but emerging areas might provide more affordable options with future growth potential.
• Invest in Unique Features: Properties with unique or luxury features, such as a private pool, garden, or ocean view, are more likely to attract higher rental rates.
• Optimize for Short-Term Rentals: Villas in Bali can generate higher returns through short-term rentals, especially if they are located near tourist hotspots. Consider listing on platforms like Airbnb or Booking.com.
• Maintain and Upgrade Regularly: A well-maintained villa also earns higher rental rates. So, remember to do regular maintenance and occasional upgrades (such as modernizing kitchens, bathrooms, or outdoor spaces). 
• Hire a Reliable Property Management Company: A professional property management team can take care of everything, from guest services to maintenance, ensuring high occupancy rates and efficient management.
• Understand the Local Market and Regulations: Keep up-to-date with local laws, tourism trends, and rental market demand to make informed decisions, avoid legal issues, and maximize your returns.
• Diversify Your Investment Portfolio: Consider purchasing multiple properties across different areas of Bali. This diversifies your risk and increases your chances of steady rental income, particularly if one area experiences a downturn.

Challenges and Risks

Investing in property in Bali can offer lucrative returns, but like any investment, it comes with its own set of challenges and risks. Here are some of the key challenges and risks you should consider thoughtfully:

1. Market Fluctuations: Like any property market, the Bali real estate market is subject to fluctuations. Factors like economic downturns, changes in tourism trends, and local demand can affect property values and rental yields.
2. High Competition in Popular Areas: While areas like Canggu, Seminyak, and Ubud are popular with tourists and investors, they can be highly competitive. As a result, finding properties that offer a high return on investment may require more time and effort due to market saturation.
3. Property Maintenance and Upkeep Costs: Owning a villa, especially one that is rented out, requires ongoing maintenance. From landscaping to pool cleaning and general repairs, these costs can add up, especially if you are not actively managing the property yourself.
4. Natural Disasters: Bali is located in an area prone to natural disasters such as earthquakes, volcanic eruptions, and flooding. While Bali’s infrastructure is generally well-prepared for such events, the potential for damage could affect both property value and rental income.
5. Currency Fluctuations: For foreign investors, fluctuations in the exchange rate between the Indonesian Rupiah and their home currency could impact the overall cost of the property and the return on investment.
6. Dependency on Tourism: Bali’s property market is highly dependent on the tourism industry. A drop in tourism due to global economic factors, natural disasters, or pandemics (such as COVID-19) can significantly affect rental income and property values.
7. Local Politics and Government Policy: Changes in local government policies, such as new taxes, zoning laws, or regulations on foreign ownership, could pose risks to investors. Staying updated on local political changes is crucial for making informed investment decisions.

FAQ

1. Are villas in Bali profitable?

Villas located in high-demand areas can deliver strong rental returns, particularly when offered as short-term holiday rentals.

2. Can you live off $1000 a month in Bali?

Yes, with smart budgeting, $1,000 per month can support a comfortable lifestyle in Bali—especially if you take advantage of local resources and live like a local.

3. Can you rent out your villa in Bali?

Yes, but to rent your villa on a daily basis, you’ll need to obtain a Pondok Wisata license. For a more detailed overview, check out our comprehensive guide to property investment in Bali here.

How Real Estate Agent Can Actually Help You

The dream of owning a villa in Bali is very much alive, but it requires more than just a budget. It requires lots of research and strategy planning before actually making payments.

But if all of that sounds like a lot of homework, it’s better to hire a professional, trusted local real estate agent like Bali Villa Realty to help you!

Bali Villa Realty is a team under Ilot Property Bali–a trusted property developer in Bali with 14+ years of experience. We’ve helped many foreigners and expats plan and execute their property investments in Bali–or simply begin their journey living in Bali. You may want to check our villa portfolio here as well.

We’re here to help you navigate every step of the way. If you have questions about how to buy villa in Bali safely, our team is always ready for a chat. Just click the link below!