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Freehold ownership is highly desirable for expats looking to invest in property in Bali. But what exactly are the advantages?
In this guide, you’ll discover the five main benefits of securing a freehold villa for foreign investors like yourself.
From ownership security to earning rental income, we’ll explain why freehold is the smartest path for your real estate investment in Bali.
You’ll gain the insights to make an informed decision about purchasing a freehold property.
Let’s explore the world of freehold investment!
What is Freehold?
For investors from abroad, it’s essential to understand the different types of property ownership in Bali.
A freehold is the complete ownership of the villa/building and the land it sits on.
With a freehold villa, you literally own every part of the property—it is 100% yours forever, with no time limits or leases involved.
This is different than some other property types:
- Leasehold: You temporarily rent or lease the property for a set number of years, like 25-30 years. When the lease ends, you must renew, pay fees, or move out.
- Right to Use/Build: You can construct a villa on land you don’t fully own; you just have permission to use it for a limited time.
Benefits for Foreign Investors
After knowing what freehold is, here are five benefits you can get from owning a freehold investment property in Bali:
1. Total Investment Security
With a freehold, you can permanently own your Bali villa with no time limits.
This means no worries about leases running out or rules changing in the future that could impact regular rental properties.
Your freehold real estate is 100% yours for life – it’s that simple.
There are no expiration dates or fees to renew anything down the road.
There are no concerns about a landlord deciding not to let you keep renting years from now.
You can even pass it down to your kids and grandkids if desired!
For this reason, some foreign investors choose freehold over other options like leasehold.
Ownership has an end date with a leasehold, usually between 25-60 years for foreigners in Indonesia.
As that date approaches, the property’s value often drops, as you have less time to return it to its owner.
For investors wanting a truly secure long-term investment without any future uncertainties, freehold ownership stands out as the #1 choice in Bali.
The villa and land are permanently yours for life, giving you complete confidence in your investment security.
2. You Own It Forever
With a freehold title, you are the perpetual and permanent owner of both the land and the villa.
This differs from a leasehold, where you only temporarily rent or lease the property.
Your freehold rights can last indefinitely and be transferred to future generations through inheritance.
You have complete control and ownership security – the property is 100% yours to do as you wish.
A freehold is an ideal way to own property for investors who want a permanent and secure place to invest their money without any time limits.
You can rest assured that your Bali villa is an asset that will always belong to you and your family.
3. Your Investment Grows in Value
Bali is a highly desirable destination that draws tourists and investors from all over the world.
However, limited prime land is available, especially in the most popular areas…
This means that high demand increases property value over time.
Freehold villas in Bali’s prime areas have demonstrated steady capital appreciation, with prices rising 6-8% annually for the past decade.
By purchasing a freehold, you can see your investment significantly grow in worth over the years.
4. Make Money by Renting It Out
With over 6 million tourists visiting Bali yearly, there is a huge demand for luxurious villa rentals.
When you purchase a freehold villa, you can take advantage of this by renting it out to visitors.
This allows you to earn rental income to offset your costs.
Working with an experienced property manager can ensure your villa is well-maintained, properly marketed, and booked solidly during peak seasons.
They handle everything from advertising to cleaning to guest check-in.
5. Design Your Dream Villa
As the complete legal owner of the freehold land and structure, you can renovate, upgrade, and decorate your Bali villa.
Want to add a private pool? Redesign the interior with Balinese accents? Construct a beautiful garden oasis? The choice is entirely yours when you own the freehold title.
This allows you to customize the property to fit your ideal vacation home or rental investment.
Things to Consider for Foreign Investors
Before you buy a freehold investment in Bali, you should be aware of 3 things to have a safe and lucrative investment:
1. Legal Ownership Structure
As a foreigner, you can’t directly purchase freehold property in Bali using just your name.
Instead, you’ll need to set up a special legal ownership structure recognized by Indonesian law.
The most common is forming a PT PMA company.
This Indonesian legal entity is owned by foreign shareholders/investors like yourself.
It can acquire freehold land and villa ownership rights.
Working with a local legal expert to properly establish your PT PMA is advisable.
See this article to know more about PT PMA: Understanding PT PMA
2. Higher Upfront Costs
Generally, freehold villas in Bali come with higher purchase prices than leasehold options.
This premium pricing reflects the premium full ownership benefits that come with freehold.
While leasehold may seem cheaper upfront, its temporary ownership structure makes those properties less valuable in the long term.
You pay more upfront for a freehold, but it’s a permanent asset that the value can appreciate substantially over decades.
3. Monitor Market Trends
Like any real estate purchase, investors should stay informed on current market data and pricing trends in Bali.
Location desirability, new construction, tourism numbers, and economic conditions can all influence freehold property values over time.
Work closely with an experienced local agent at a firm like Bali Villa Realty. We have up-to-date insights on market movements and can ensure you secure a wise freehold investment that matches current demand and future appreciation potential.
Securing Your Bali Freehold Investment
With more foreigners looking to invest in Bali, owning a villa through a freehold is becoming popular.
This option offers stability and total control over your property, making it an attractive investment.
However, navigating the Bali real estate market can be challenging, from understanding local laws to ensuring your investment is sound.
That’s why partnering with the right real estate agent is critical for anyone wanting to secure a freehold investment in Bali.
These professionals can guide you through the process, ensuring that your investment meets legal requirements and fulfills your long-term goals.
Have you considered investing in a Bali villa through a freehold? What factors are most important to you in this investment journey?
