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Selling or renting out a villa in Bali is a common strategy among foreign investors. Many choose to lease their property for several years to earn returns—treating it much like any other investment.
However, one critical factor that many investors overlook is the leasehold duration before signing a contract.
The reality is, longer leases often generate a better ROI than shorter ones. But what exactly counts as a “long-term lease”?
Let’s explore these practical tips for investing in Bali property so you can make smarter, future-proof decisions.
Contents
Key Takeaways
- Price and location matter, but lease length is what serious buyers check first.
- A lease with 20 to 25 years left gives you stronger selling power and buyer trust.
- Most villas break even in 7 to 8 years. After that, rental income becomes pure profit.
- A shorter lease doesn’t mean you’re out of options. You can extend or adjust your strategy.
- A clear and legally strong lease agreement protects your sale and simplifies the process.
How Long Should a Bali Property Lease Be?
In Bali, foreigners can typically lease property for 25 to 30 years, with the option to renew.
Renewal agreements often allow extensions of the lease term, sometimes adding up to a total of 80 years.
Alternatively, investors can also negotiate longer lease terms upfront—up to 99 years. While this is possible, it’s less common and requires careful negotiation and proper legal documentation.
Read More: What Happens After the Lease Expires? Bali Leasehold Property Guide
Why 25 Years of Lease Is the Sweet Spot
Based on our experience handling clients’ leasehold properties, leases with around 20 to 25 years remaining often hit the sweet spot.
This duration gives buyers peace of mind—enough time to enjoy the property without feeling rushed to extend the lease immediately.
That said, it doesn’t mean you can’t sell a property with a shorter lease. You just need to adjust your expectations and be ready to negotiate.
Many buyers are still interested, especially if they love the villa and the price reflects the remaining lease term.
Read More: Freehold vs Leasehold: Which Ownership Type is Right for You?
Benefits of Long Term Rental in Bali
If you’re thinking long-term with your villa investment in Bali, having a longer lease can give you more control, flexibility, and peace of mind. Here are some key benefits of holding a long lease:
- Faster Return on Investment: On average, most investors recoup their initial costs within 7 to 8 years.
- Ongoing Rental Income: Once the payback period is over, most of what you earn from the property becomes profit.
- More Flexibility: If you’re not in a rush to sell, you can keep renting the villa and enjoy steady income.
- Better Position for Future Sale: A longer lease makes your villa more attractive to buyers, especially if the lease has 20+ years remaining.
- Option to Extend: You can extend the lease early to add value and give your property a fresh start—especially useful if your paperwork is already clean and legal.
- Less Pressure, More Control: Whether you sell now or later, a long lease gives you time to plan and negotiate on your terms.
The Paperwork That Protects Your Sale
Even with the “perfect” number of years left, the fine print in your lease agreement matters.
A clear, well-drafted lease gives your buyer confidence. It shows that the process will be smooth.
So, remember to always make sure your lease clarifies:
- What you can do with the property (like rent it out)
- Who’s responsible for what
- And how to extend or transfer the lease
If any of that is unclear, get help from a trusted local notary or legal advisor who knows how Bali property works.
Final Thoughts
If you want to earn better profits, we suggest leasing your property for around 20 to 25 years. Don’t forget to prepare the required documents to keep your investment legal and on track.
Still feeling unsure, or just want someone to guide you through the process? We’re here to help!
Click the button below to get answers to your questions. We’ll walk you through the first steps of renting out your villa, planning your strategy, and making sure everything checks out.
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FAQ
1. How long can you lease land for in Bali?
A typical leasehold land agreement (Hak Sewa) in Bali lasts between 25 and 30 years, with the option to extend it—potentially up to a total of 80 years.
2. How does leasehold work in Bali?
Leasehold ownership in Bali means that the buyer is purchasing the right to use and occupy the property for a specified period of time, usually between 25-30 years.
3. What is the maximum years for a land lease agreement?
Ground leases are commonly made by commercial landlords, who typically lease land for 50 years to 99 years
4. Can I sell my leasehold property in Bali?
Selling a leasehold title may happen in two different forms: a) as a sublease that you grant to your buyer or b) by cancelling your lease and replacing it with a new lease directly between the owner of the freehold title and your leasehold buyer.
