How Property in Bali can Help You with Investment Diversification

  • Bali Villa Realty by Bali Villa Realty
  • 2 months ago
  • Blog
  • 0

Are you looking to make your investment portfolio stronger and safer?

The saying “don’t put your eggs in one basket” works not only in stocks but also in real estate investment. 

A downturn in a single market can significantly impact your entire investment portfolio, leading to potential financial setbacks.

Of course, as a property investor, you don’t want that to happen. 

But how do you mitigate it? Start by diversifying your investment. 

When you own properties in different places, it’s like having a safety net for your money. This way, if one market goes down, it doesn’t ruin everything you’ve invested. 

Plus, having various properties means you can attract all sorts of people – from young workers to people enjoying their retirement – who might want to rent or buy from you.

If you consider investing in Bali’s property market, the most popular investment is through land and villas. 

In fact, In 2019, you could buy freehold land for IDR 1 billion (USD 67,000). By 2023, the price jumped to IDR 1.5 billion per are (USD 100,000), marking a 50% increase!

In short, the faster you invest in Bali’s growing property market, the better profits you’ll earn in the future. 

Ready to hear about some diversification strategies for property investment in Bali? Then let’s get going.

What is diversification?

Diversification in real estate investment is Spreading your money across different properties or places. 

The main idea here is to lower the chance of losing money while increasing your chances of making more. 

You can do this by buying different properties in various locations or using different ways to invest your money. 

This idea of spreading things out is super important if you want to be smart about investing in real estate.

Some ways you can do to diversify your property investment in Bali:

Here are a couple of examples of how you might go about it:

  1. Investing in Land:
  • Raw Land: You could buy a piece of raw land in an up-and-coming area of Bali. This land could increase in value as the area develops, offering a good return when you sell. For example, buying land near new tourist attractions or areas slated for future development.
  • Commercial Land: Another option is to invest in land that can be developed into commercial properties, such as shops or restaurants, especially in areas popular with tourists or expats. They are usually located in the pink zone area.
  1. Investing in Villas:
  • Rental Villas: Purchasing a villa that can be rented out to tourists or long-term residents is a way to generate steady income. For example, a beachfront villa in areas like Seminyak or Canggu would attract holidaymakers.
  • Villas for Resale: Buying villas that need some work, renovating them, and selling them at a higher price can also be profitable. This is particularly effective in sought-after areas where property values are rising.

Land investments might take longer to mature but can offer significant returns if the location becomes more desirable. 

Conversely, Villas can provide immediate rental income and the potential for capital gains through improvements and market growth.

What you need to know in Investing in both Villas and Land in Bali

Benefits of investing in a villa:

  • Always in Demand: Bali is a top spot for vacations, meaning many people are always looking for places to stay. Villas in popular tourist spots are especially in demand. They offer tourists and people living abroad a beautiful and luxurious place to stay, which can make you more money from rent.
  • Great Earnings and Growth: If your villa is in a good spot, you can earn a lot from rent, especially when many tourists come. Plus, as more people want to visit Bali, your property’s value could increase, giving you a chance to make even more money.

Things to Think About:

  • Rules for Buying Property: In Indonesia, special rules make it hard for foreigners to own property directly. It’s very important to understand these rules to ensure your investment is safe.
  • Taking Care of Your Property: Owning a villa means keeping it in good shape and managing things like bookings and guest services. This can take a lot of work or might require hiring a company to help.
  • Changing Income: How much you earn from renting your villa can change throughout the year. You might make a lot during the busy season but find it empty at other times. Planning your finances well is key to handling these ups and downs.

Also read: How Profitable Is Your Villa Rentals In Canggu?

Benefits of investing in land:

  • Build What You Want: When you buy land, you can build whatever you like on it, whether that’s houses, shops, or hotels. This lets you make the most of what’s popular in the market or go with your ideas.
  • More Affordable to Start: Buying land that hasn’t been built yet is usually cheaper than buying something already there. This makes it easier to start investing.
  • Big Potential for Growth: Land in the right spots in Bali can go up in value over time as more tourists and people moving to Bali look for places to live or visit.

Things to Consider:

  • Rules About What You Can Build: You need to know the local rules that say what you can and can’t build on your land. Following these rules is super important if you want your project to go smoothly.
  • Waiting for Your Investment to Pay Off: It might take a while before you start seeing money from your investment. Building on your land and waiting for its value to go up or to start making money from it can take longer than buying a property already built.

Also read: Freehold vs Leasehold: A Complete Investment Guide in Bali.

Conclusion

If you’re thinking about investing in Bali, it’s really important to look at the good and bad sides of buying villas or land. 

Both choices offer different chances and challenges that fit differently with:

What do you want out of your investment?

How much money can you spend? 

And what do you like? 

By thinking carefully about these things, you can make a choice that fits best with your plans for investing in Bali’s exciting real estate market.

Want to know more about investing in Bali? Click here now to get a free consultation.

Join The Discussion

Compare listings

Compare