9 Top Mistakes Expats Make When Buying Property In Bali

  • Bali Villa Realty by Bali Villa Realty
  • 6 months ago
  • 0

You might think buying a property in your own country is easier… 

But there, taxes and mortgage costs are much higher. 

That’s why you’re considering buying property in a place like Bali. 

However, when you start, you find rules and processes that are new to you.

You worry about spending too much money or choosing the wrong location. 

You may have heard about people from other countries who had these problems in Bali. 

This article will discuss the top nine mistakes these people often make when buying property in Bali.

So you can avoid these mistakes and make buying property in Bali a great experience.

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1. Not Knowing Local Property Rules

Not being familiar with the local property laws can lead to significant challenges when investing in property in Bali as an expat. 

This lack of knowledge is one of the top mistakes expats make, and here’s why:

Bali’s property investment landscape is unique and governed by rules quite different from those in many other countries. 

This can be a major stumbling block if you’re coming from a place with a very different legal system. 

  • Unique Property Investment Landscape:

Bali’s property investment rules are unique and differ greatly from those in many other countries. This can be a major issue if you’re used to a different legal system.

  • Types of Property Ownership:

As an expat, you’re more likely to enter into a leasehold agreement, where you can use the property for a set number of years, usually between 25 to 30 years, with the possibility of an extension. This differs from full ownership, which is typically reserved for Indonesian citizens.

  • Restrictions on Properties for Expats:

Particular rules govern the types and locations of properties that expatriates can purchase. These rules can be complex and hard to navigate without proper understanding, leading to potential issues.

In short, a major mistake expats make when investing in property in Bali is needing to understand the local property laws fully. 

By understanding these laws and getting professional help, you can make a better decision and have a successful property investment in Bali.

2. Ignoring Due Diligence

Another major error expats often make when buying property in Bali is not doing enough due diligence. 

This means they don’t investigate the property thoroughly before buying it. 

Here’s why due diligence is so important:

You need to check that the property is legally okay to buy. 

This includes confirming that the seller owns the property and has the right to sell it. 

  • Legal Status of the Property:

Confirm that the seller owns the property and has the legal right to sell it. Look for any legal issues or claims on the property that could cause problems in the future.

  • Building Permits and Land Titles:

In Bali, land titles can be complex. It’s crucial to ensure they are clear and valid to avoid future legal issues. These are essential to confirm the property meets local building regulations. Missing or incorrect permits could lead to serious legal problems.

  • Physical Property Inspection:

Go beyond a basic walk-through and thoroughly examine the property’s condition, structure, potential damage, and utilities like water and electricity.

In summary, not doing due diligence is a big mistake for expats buying property in Bali. 

By thoroughly researching and inspecting the property and ensuring all the legal details are correct, you can avoid common problems and make a secure and sound investment in Bali.

3. Underestimating Total Costs

A common mistake many expats make when buying property in Bali is not considering all the extra costs. 

It’s not just the property’s price; you must consider several other costs.

Here’s a breakdown of these important additional costs:

1. Legal Fees: 
When buying property, you need a lawyer or a notary to deal with all the legal details. Their help is essential, but it comes at a cost. Notary fees typically range from 1% to 2.5% of the property’s selling price. Remember to include these fees in your total budget.

2. Taxes and Duties: 
Transfer taxes are payable when purchasing property, and property taxes are paid annually. These taxes are based on the value and location of the property.

3. Renovation and Maintenance Costs: 
If the property requires renovations, the costs can vary depending on the extent of the work needed. Additionally, ongoing maintenance costs are necessary to keep the property in good condition, especially considering Bali’s weather conditions

4. Property Insurance: 
It is essential to have property insurance to protect your investment in case of damage, particularly in areas prone to natural disasters like Asia.

When you add up all these extra costs, the total amount you spend on your Bali property can be much more than you first thought. 

You must consider these costs carefully and plan your budget to make your property investment attractive and affordable.

If you need more in-depth costs on how much expenses, feel free to have a personal conversation with one of our senior advisors here.

4. Neglecting Cultural Sensitivities

One big mistake many expats make when they buy property in Bali is not paying enough attention to the local culture. 

Understanding and respecting Balinese culture is vital for a successful property investment and living well on the island.

Here’s why being culturally aware is crucial:

1. Respecting Local Traditions: Bali has a rich culture with strong religious beliefs. As someone from another country, I know respecting these traditions is key. This means learning about the local customs and taking part in community events. Joining in local ceremonies, for instance, is a good way to show your neighbors that you respect and value their way of life.

2. Properties Near Cultural Sites: If you’re buying a property near religious or cultural sites, remember that these places might have their own rules or traditions. Being considerate of these shows that you appreciate Balinese culture.

3. Adapting to Communication Styles: In Bali, people communicate more indirectly than in many Western countries. Understanding and adapting to this style can help you avoid misunderstandings and build good relationships with the local community.

By respecting the local culture, traditions, and ways of communicating, you can ensure a smooth investment experience and a peaceful life in Bali.

5. Poor Location Choices

Choosing a poor location is another common mistake expats make when investing in property in Bali. 

Your property’s value and future growth potential heavily depend on its location.

Here’s why picking the right location is so important:

1. Think About Future Changes: 
When you pick a location, don’t just look at what it’s like right now. Think about what might happen there in the future. Are there plans for new buildings or improvements in the area? Places with these kinds of future developments can be smarter choices because they might increase in value over time.

2. Tourism’s Influence on Property: 
Bali is famous for its tourists, impacting property demand. You have a good chance of making money from renting your property in areas with many tourists. But remember, tourist numbers can change with the seasons, affecting how much you can earn from rent and even the value of your property.

3. Long-Term Growth Potential: 
Some areas in Bali might be popular right now and offer quick profits. But considering places that might grow more is also a good idea. This could be because of new developments or because more people are starting to find these areas attractive.

Not choosing the right location can be a big problem for expats buying property in Bali. 

It’s important to consider the area’s current state, what might happen there, the effects of tourism, and the potential for long-term growth. 

6. Rushing The Buying Process

A common mistake many expatriates make when buying property in Bali is rushing the decision. 

It’s essential to take the time to research and weigh your options properly before making a purchase.

Let’s delve into why slowing down the decision-making process is so important:

  • Avoiding Overlooked Details:

Making rushed decisions might lead to missing crucial information about the property or its location. It’s essential to look at different areas and types of properties to find what best meets your needs and investment goals.

  • Understanding Each Property’s Unique Aspects:

Every property comes with its own set of features and potential. Fully understanding these aspects is key to making a wise investment.

  • Staying Market-Savvy:

The Bali property market can fluctuate. What may seem like a good investment now might not be in the future. Keeping informed about market trends ensures that you purchase at the right time.

Rushing the property buying process in Bali can lead to missed opportunities and potential pitfalls. 

Taking the time to thoroughly research, seeking expert advice, and staying informed about market conditions are crucial to ensure a successful and satisfactory property investment.

7. Inadequate Legal Representation

Not having a good lawyer is a big mistake expats often make when buying property in Bali.

It’s vital to have a lawyer knowledgeable about the property laws in Bali to help with your purchase.

Here’s why having the right legal help is so important:

  • Help with Contracts:

A lawyer who knows about Bali’s property laws will look over and negotiate the terms of your property purchase agreement. They ensure the deal is fair and protects you as the buyer, so you don’t agree to anything that could cause problems later.

  • Following Local Laws:

A good lawyer will check that everything about your property purchase follows Indonesian laws. This helps prevent legal issues that could come up if you don’t follow the local laws.

  • Preventing Legal Issues:

Without the right legal advice, expats can run into avoidable legal troubles. A skilled lawyer is critical to keeping your property investment in Bali safe.

Not having proper legal representation can lead to challenges for expats buying property in Bali. 

It’s crucial to have an experienced lawyer who understands the local property laws to ensure a smooth and secure property buying process.

8. Ignoring Market Trends

Not paying attention to market trends is a crucial mistake many expats make when investing in property in Bali. 

Understanding these trends is essential for making informed and smart investment decisions.

Let’s explore why keeping up with market trends is so important:

  • Watching Property Prices:

Market trends show how property prices are changing in different areas. This information helps you determine the best time to buy a property and guess its potential value.

  • Knowing Which Areas Are Popular:

Property prices might increase if a certain area in Bali becomes more popular. Knowing which areas are gaining popularity can help you invest in a property that might increase in value.

  • Avoiding Poor Investments:

By not following Bali’s market trends, you risk missing out on good investment opportunities or buying a property that doesn’t fit the current market situation. In Bali, factors like tourism significantly affect property values. Understanding market trends is crucial for a successful purchase.

Ignoring market trends is a significant mistake for expats buying property in Bali. 

Awareness of changes in property prices, area demand, and the overall economic situation helps make well-informed property investments that align with current market conditions.

9. Lack Of Exit Strategy

Not planning what to do with your property in the future is a common mistake for expats investing in Bali.

Here’s why having an exit strategy matters:

  • Thinking About Selling:

If you want to sell your property later, you must figure out the best time. This means understanding how prices change in Bali and guessing when your property might be worth the most.

  • Considering Renting it Out:

If you’re considering renting your property, consider what makes it appealing to people wanting to rent. Look at where your property is, what features it has, and how much people might like it during Bali’s tourist seasons.

  • Getting the Most from Your Investment:

You need a clear plan to get the most money from your property. Whether you want to earn money from rent or sell the property, having a clear plan helps ensure your investment works well with your long-term money plans. 

Whether you plan to sell or rent out your property, aligning this with the market and your financial goals is key to a successful investment.


Buying property in Bali can be a rewarding experience if done right. 

With careful planning, legal guidance, and respect for local culture, your dream of owning a piece of paradise can become a reality. 

By now, you’ve got everything you need to know for a safe property investment in Bali.

If you want personalized options or have questions about starting your investment property in Bali, our legal experts are here to help. Book a free consultation or email us at office@ilotpropertybali.com.

Our experts are ready to help you with the legal and safe investment process. And direct you towards properties with great potential for appreciation and help you steer clear of common issues.

Want to start an investment property in Bali?

Talk to our professional real estate experts and get personalized information tailored to your investment needs in Bali.

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