Why More Bedrooms Mean Bigger Profits for Your Bali Villa Investment

One of the questions our investor clients ask all the time is: does having more bedrooms in a villa automatically mean higher profits? At first glance, the logic seems straightforward—it does add up mathematically.

More bedrooms usually mean more guests can stay in your villa. Bigger villas also appeal not just to expats, but to Indonesian travelers who often travel in large groups—like big families or groups of friends.

But does that mean you must own a villa with 5 or 6 bedrooms (or more) to maximize your ROI?
Not so fast.

There are a few important things you should think through carefully before deciding to add more bedrooms to your villa. Let’s break it down together.

Key Takeaways

• More bedrooms can raise property value and rental income, but only if the market supports it.
• Bigger isn’t always better—large villas may have lower occupancy, especially in couple-dominated areas.
• Design, layout, and bedroom-to-bathroom ratio matter more than simply increasing the bedroom count.
• ROI depends on balance: renovation cost, operating expenses, and actual demand must align.

Do More Bedrooms Increase Your Villa Value?

Yes. According to renovation expert Cathy Morrissey (better known as The Reno Chick), adding an extra bedroom can often boost a home’s value—though it’s never the only factor that matters.

She explains that for properties priced between $500,000 and $1 million, an additional bedroom can increase the potential sale price by roughly $50,000 to $80,000. It’s a solid strategy for many investors, but it’s not without a few things you need to watch out for.

Cathy also reminds us that the overall performance of a property depends on a mix of elements—not just the number of bedrooms you offer.

Understanding the Demand for Bigger Rentals

In the rental investment game, your profit really comes from balancing how many bedrooms you offer with your total costs. Still, more bedrooms often mean the potential for higher rental income.

For example, data from Airroi shows that most villas available for rent in Canggu are designed for 2 guests, followed by 4, 6, and then 8+ guests. This indicates that many visitors travel to Canggu in groups—and they’re actively looking for villas with more bedrooms.

Data from Zillow also shows an average 21% rent increase when upgrading a property from one to two bedrooms.

We see a similar pattern in Umalas. According to Oniriq, 5- and 6-bedroom villas continue to lead in revenue, with 6-bedroom villas peaking at $15,502.13 in Q3 2024. These large villas are also considered ideal for bigger families, group travelers, and luxury guests.

Additional Studies and Reports

Here are a few studies showing how additional bedrooms can significantly boost rental income:

1. AirDNA (2024)

AirDNA’s data shows a strong link between the number of bedrooms and the average daily rate (ADR) for Airbnb listings in the United States. Some of the biggest jumps include:

• Upgrading from a private/shared room to a 1-bedroom entire home can increase rates by almost 60%.
• Moving from 4 to 5 bedrooms can justify a 44% increase in ADR.

2. Airbtics (2024)

Airbtics analyzed over 500 Airbnb markets worldwide and found that adding an extra bedroom can increase the average daily rate by 20–50%.

They also note that properties with 6+ bedrooms may have lower average occupancy. However, they can charge a premium daily rate. That’s why the gross rental yield for 6+ bedrooms can still be higher—as long as the market supports it.

3. JJL Report (2024)

JLL studied rental apartments in the United Kingdom, comparing 2-bedroom and 3-bedroom units. Their findings show that 3-bedroom apartments can deliver strong rental yields, but—similar to Airbtics—“bigger isn’t always better.”

Three-bedroom apartments are in much shorter supply than 1- and 2-bed units. Depending on the local market, this can actually work in your favor due to basic supply and demand.

You can also target more specific renter segments, such as:

• Couples wanting a home office
• Young professionals sharing a unit
• Young families
• Groups of friends
• Renters who want an extra room for work or storage

Comparing Villa by Number of Bedrooms

Villa rental rates shift depending on how many bedrooms a property offers. Most villas fall into four categories: one-bedroom, two-bedroom, three-bedroom, and larger villas with more than three bedrooms.

Each category comes with its own set of features and price range to match different types of travelers as shown below:

Category	Best For	Typical Features	Daily Rate Range*
1-Bedroom Villas	Couples, solo travelers	Private pool, kitchen, compact living space	$40-$100
2-Bedroom Villas	Small families, friends	Larger living areas, bigger outdoor space	$100-$400
3-Bedroom Villas	Larger families, groups	Multiple bathrooms, bigger kitchen, spacious layout	$200-$1,700
4+ Bedroom Villas	Large groups, multiple families, luxury travelers	Premium amenities (private pools, gardens, entertainment areas), expansive layout	$400-$3,000

Read More: Hotel vs Villa in Bali: What Do Tourists Prefer in 2025?

Which Villa Sizes Get the Most Bookings?

The truth is—it depends. A real estate success always comes back to one key principle: supply and demand. For example, here's what the data shows in Canggu (from AirDNA).

The figures above represent bookings in Canggu from January to June 2024. The chart highlights that 1-bedroom villas lead with the highest number of bookings, showing strong demand from couples and solo travelers.

Next in line are 3-bedroom villas, which even outperform 2-bedroom units. This suggests that these villas are seen as the ideal size for families or groups of friends traveling together.

On the other hand, 4-bedroom villas record fewer bookings, pointing to lower overall interest and a more niche audience. 5- and 6-bedrooms or more also show moderate booking activity, indicating they are mainly chosen for big groups or special events.

Pros of Having More Bedrooms in Your Villa

• Higher Rental Income: More bedrooms generally allow you to charge higher rental rates. Larger groups are often willing to pay a premium for the extra space.
• Stronger Demand: Villas with more bedrooms attract a broader range of guests, including big families and groups of friends. This often leads to more consistent bookings.
• Greater Flexibility: Extra bedrooms make your property adaptable for different types of renters—from holidaymakers to long-term tenants—making your villa more versatile and resilient to market shifts.

Cost Considerations for Additional Bedrooms

Having more bedrooms can increase rental income, but it also raises overall expenses:

• Higher Operating Costs: More bedrooms can increase rental income, but they also raise overall expenses—such as property taxes and maintenance. These costs typically range from 1–3% of the property’s value per year.
• Maintenance and Upkeep: Bigger villas require more cleaning, repairs, and regular upkeep. More guests also lead to faster wear and tear, which can raise expenses and reduce profits if not managed properly.
• Higher Initial Investment: Properties with extra bedrooms come with a larger upfront purchase price and often higher mortgage payments. You’ll need to ensure the potential rental income comfortably covers these added financial obligations.
• Potential for Lower Occupancy: It’s also important to note that the more bedrooms your villa has, the more likely it is to experience lower occupancy rates, especially in markets dominated by couples or small groups.

Read More: Understanding Bali Property Taxes for Foreign Buyers

When Adding More Bedrooms Stops Paying Off

You should also be aware that the more bedrooms your property has, the higher the chance your occupancy rate may decrease. There are also situations where adding more bedrooms stops being worth it:

• When the Market Data Doesn’t Support It: Different areas show different value gaps between 2-, 3-, and 4-bedroom homes. Sometimes the price jump is huge; other times, it’s barely noticeable. If the market isn’t willing to pay significantly more for an extra bedroom, the renovation may not be profitable.

• When the New Bedroom Doesn’t Fit the Floor Plan: If the added bedroom disrupts the natural layout—such as being placed off the living room or requiring awkward access—it can reduce the property's appeal and overall value. So, your villa design really matters!

• When the Bedroom Is Too Small or Feels Cramped: A bedroom that’s too tiny or awkwardly shaped won’t be seen as a real value-add. Buyers may even view it as a downgrade.

• When the Bedroom-to-Bathroom Ratio Becomes Unbalanced: Too many bedrooms and not enough bathrooms (or living spaces) make the home feel impractical. This can turn buyers off and lower the perceived value.

• When It Doesn’t Align With Your Strategy: If your goal is to sell the property, buyer expectations matter more. In some markets, creating another bathroom, living area, or office might add more value than squeezing in another bedroom.

• When Costs Outweigh the Financial Return: Higher renovation costs, bigger mortgages, and increased maintenance can eat up the extra profit if the added bedroom doesn’t bring a strong enough price increase.

How to Boost Your Villa’s Occupancy Rate

Aside from adding more bedrooms, here are a few easy ways to increase your villa’s occupancy rate and overall returns:

• Focus on Quality, Not Just Quantity: Make sure every bedroom feels inviting and well-designed. Comfortable, stylish rooms attract better guests—and let you charge more.
• Target the Right Guests: When promoting your villa, emphasize how many people it can comfortably host and why it’s perfect for families or groups. Use online listings and social media to reach both international travelers and the local Indonesian market.
• Stay on Top of Maintenance: A well-kept villa performs better. Regular upkeep helps prevent costly issues, keeps guests satisfied, and protects your long-term rental income.

Conclusion

Adding more bedrooms can be a smart way to increase your villa’s value and rental revenue—but only when it aligns with market demand, smart layout design, and your overall investment strategy.

At the end of the day, successful property investing is about balance. And you don’t have to figure everything out on your own. We’re here to support you with up-to-date real estate insights from expert agents who understand the local market firsthand.

Get a free investment plan tailored to your situation, needs, and goals. Book a free, no-obligation consultation right here.

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