ROI on Bali Villa Investment
What It Is, How to Calculate, and Simulation
ROI (Return on Investment) shows how much profit you make compared to the cost of your investment. It’s usually expressed as a percentage.
Curious about what’s considered a good Bali villa ROI? Returns here often range from 7% to 18% per year, with anything around 20% considered exceptional.
Thanks to Bali’s booming tourism, rental yields are often impressive, with steady demand for vacation homes.
What about your Bali villa ROI? How much can you expect? Here’s how ROI works and how to calculate it.
ROI Calculator
The easiest way to calculate ROI is by using our calculator below.
Our ROI calculator helps you estimate the profitability of a villa investment—or, how much you could earn by renting out a Bali villa.
How to use ROI Calculator by Bali Villa Realty:
- Simply adjust the sliders for Purchase Price, Nightly Rental Price, and Occupancy Rate.
- Instantly see an estimate of your potential return on investment.
*This calculation assumes the villa is cash-purchased.
Get Your Free Bali Villa ROI Report
Learn real case study data and insights to help you maximize your investment returns in Bali.
Get Your Free Bali Villa ROI Report
Learn real case study data and insights to help you maximize your investment returns in Bali.
How to Figure ROI on Bali Investment Property
Estimating ROI for a Bali villa involves a few simple steps. Here’s the formula to calculate ROI:
Now, let’s break down each factor that affects ROI:
1. Purchase Price
The purchase price is how much you pay to buy the villa. It depends on:
- Location (prime areas cost more)
- Size and number of bedrooms (more bedrooms = higher price)
- Type (single-story vs. multi-story)
- Building materials
Example: A 3-bedroom villa in Canggu might cost $300,000. That’s your purchase price.
2. Nightly Rental Price
This is what you charge guests per night to stay in your villa. The price depends on:
- Location
- Amenities (like a pool, modern design, ocean view)
- Market demand
Example: A villa in a popular area with a private pool and modern furnishings could rent for $200 per night.
3. Occupancy Rate
The occupancy rate shows how many days in a year your villa is rented out.
Example: If your villa is rented out for 65% of the year, then your occupancy rate is 65%.
Fact about Bali villa occupancy rate:
- A good occupancy rate is usually 60%–80%, depending on market and location.
- Rates are higher during holidays and lower in off-season.
Bali remains a year-round hotspot (ranked the 2nd most popular destination in the world by TripAdvisor in 2023), so villas here often enjoy steady bookings.
4. Annual Rental Income (ARI)
Annual Rental Income is calculated by multiplying the nightly rental price by the number of days in a year and then by the occupancy rate.
Example: If your nightly rental price is $200 and your occupancy rate is 65%, your ARI would be:
5. Operating Expense Ratio (OER)
OER is the percentage of your annual rental income spent on expenses. A healthy OER range is usually 30%–40%. This range helps cover all costs while keeping the villa profitable.
Expenses usually include:
- Utilities (electricity, water, internet)
- Maintenance and repairs
- Property management fees
- Insurance and property taxes
- Marketing costs
Example: We use 35% as a balanced example.
6. Monthly Expense
To find your monthly expense, first calculate the annual expenses using the Operating Expense Ratio (OER). Then, divide by 12.
Example: If your annual rental income is $47,450 and your OER is 35%, then your monthly expense will be around $1,384.
7. Monthly Net Income
Monthly net income is the profit made each month after subtracting the monthly expenses from the monthly rental income.
Example: If your annual rental income is $47,450 and your annual expenses are $16,608, your monthly net income will be around $2,570.
8. Annual Net Income
Annual net income, or annual profit, is what you earn after subtracting the estimated annual expenses from the annual rental income.
Example: If your annual rental income is $47,450 and your estimated annual expenses are $16,608, here’s what your Annual Net Income will look like:
9. ROI Calculation
Finally, we calculate the ROI on a Bali villa by dividing the annual net income by the purchase price, then multiplying by 100 to get the percentage.
This ROI percentage represents the return on your investment. It shows how much profit you are making relative to the cost of the investment.
Example: If your annual net income is $30,842 and your purchase price is $300,000, your Bali villa ROI will be 10.28%.
10. Estimating Payback Duration
To estimate how many years it will take for your Bali villa to pay for itself (the payback period), divide the total investment by the annual profit (calculated from ROI).
Example: If your ROI is 10%, it suggests a payback period of around 10 years.
Utilizing Your Bali Villa ROI for Higher Profit
Investing in a Bali villa is a great opportunity. But, calculating ROI helps you compare properties more effectively.
If you’re looking at villas in similar locations, you’ll naturally choose the one with the higher ROI. That means more income and a shorter payback period.
With ROI as your guide, you can make smarter, more confident decisions about which Bali villa will deliver the best long-term results.
Want an easier way? Let us find a high-income Bali villa and calculate its ROI for you—completely FREE
