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Buying a property because it looks nice or is cheap is not enough.
You must consider several factors to ensure your investment thrives and delivers strong returns.
And one of the most critical factors? Location.
Understanding the unique characteristics of Bali’s best locations is critical to making a sound investment decision.
This guide will cover the seven most important factors to help you choose the right location for your investment property.
Let’s get started!
Why Choosing a Location Matters
As Mark Twain said, “Buy land, they’re not making it anymore.”
While there may be plenty of properties, not all locations will give you the same return on investment.
A great villa in a poorly chosen area can fail to meet your rental income goals…
At the same time, a well-located property can deliver strong returns, attract high-value renters, and appreciate over time.
In a dynamic market like Bali, understanding how to choose the right spot can set your investment up for long-term success.
So, how can you know where to invest? It’s based on these 7 critical factors.
Factor #1: Tourism Demand & Popularity
Bali’s tourism market is one of the key drivers of its real estate market.
When considering where to invest, look at areas with strong and consistent tourism demand.
Popular hotspots like Seminyak, Canggu, and Ubud attract tourists and expats alike.
Because these areas offer a mix of luxury, convenience, and culture, villas are often booked year-round.
But don’t just stick to the most obvious locations—up-and-coming areas like Uluwatu and Pererenan are seeing increased demand…
This means you could buy at a lower price and see great returns as these areas develop.
Ask yourself: Will tourists want to stay here?
High-demand areas offer a steady stream of rental income, so understanding the patterns of Bali’s tourist traffic is vital for success.
Factor #2: Accessibility
Accessibility is crucial, not only for tourists but also for long-term residents.
You want a location that’s easy to reach, whether from Bali’s Ngurah Rai International Airport or major roads connecting the island’s hotspots.
If a property is too far from the main hubs or in a remote area, it may deter potential renters or buyers.
Locations with easy access to famous beaches, restaurants, shopping centers, and wellness retreats will be much more desirable.
Look for places with good roads and proximity to conveniences, especially if you’re targeting a high-end or frequent renter market.
Factor #3: Local Amenities and Infrastructure
Following up on the previous point, potential buyers or renters will likely ask, “What’s nearby?”
Does the area have easy access to healthcare, grocery stores, gyms, or schools (for long-term residents)?
The proximity of these amenities can significantly increase the appeal of your investment.
Look for areas with well-established infrastructure or, even better, where new infrastructure is being developed, signaling growth and future demand.
For example, Umalas offers a family-friendly atmosphere, great schools, and calm beaches, which may appeal to long-term renters looking for a quiet retreat.
Factor #4: Rental Yields and ROI
One of the first things you’ll want to consider when choosing a location is the rental income your property can generate.
Areas with strong tourism and expat communities tend to have higher rental yields.
Seminyak and Canggu are known to generate rental yields of 12-15% per year, making them two of the most attractive investment spots.
But don’t overlook areas like Ubud or Sanur, where the slower pace may appeal to families or retirees and offer stable, long-term rental returns.
Knowing an area’s potential rental income helps determine whether you’re making a sound financial decision.
Factor #5: Development and Growth Potential
An often-overlooked factor is a location’s future growth potential.
While some areas of Bali are well-established and priced at a premium, other locations are still developing and offer opportunities for early investment.
Areas like Pererenan and Tabanan (like Kedungu) are seeing increased interest as people want to find serene and quiet places to invest.
Investing in a property before the area fully develops could yield high returns as prices rise with the growing demand.
Early investment in the developing areas could mean purchasing at a lower cost and profiting from future demand.
Are you looking for an emerging area that offers a great return? Find out about one area that is growing fast in Bali.
Factor #6: Zoning Regulations
Zoning is critical in Bali, especially for foreigners.
You want to ensure that the land is zoned for the type of property you want to build, whether residential, commercial, or tourism-related.
Foreigners often rely on leasehold agreements, so you must know if the land use aligns with your investment plans.
There are:
- Green zones where building is not permitted
- Yellow zones for residential purposes and
- Red zones for commercial use.
Building in the wrong zone could lead to complications, fines, or even property demolition.
For more information on land zoning and which zone brings in the most money, check out our recent post here.
Factor #7: Cultural and Environmental Considerations
Last but not least, Bali is unique in its strong cultural heritage and natural environment.
Many areas are protected due to their cultural significance or environmental sensitivity.
While a location might seem ideal for investment, local customs or environmental restrictions might make development difficult.
Ubud and Uluwatu are areas where local culture and nature play a huge role in shaping development opportunities.
You must respect Balinese customs and ensure your property meets local community guidelines.
So, try to work with a local real estate agent who can help you understand what you can and cannot do.
Making the Right Decision
Choosing the right location to invest in Bali requires careful consideration of all the factors mentioned above.
The island offers diverse opportunities, from high-tourism hotspots like Canggu to quieter, growth-focused areas like Pererenan.
By focusing on accessibility, rental yields, and future growth, you’ll position yourself for success.
Location is the foundation of any real estate investment, and making the right choice can mean the difference between high returns and missed opportunities.
If you’re ready to explore the best locations in Bali for property investment, visit our hand-picked property listings in the most prime locations in Bali.
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