3 Things You Must Know Before Starting Airbnb Rentals In Bali In 2024

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

Starting an Airbnb hosting business can be complex, especially for foreign investors.

There are things to consider, like budgeting, location, facilities, and maintenance.

But you don’t need to worry…

Although it’s pretty challenging, it doesn’t mean you, as a foreign investor, can’t rent out your property, especially in Bali. 

In a moment, I’ll give you three simple ways to make your rental properties profitable on Airbnb. 

But first, let’s see what makes Airbnb rentals in Bali popular among foreign investors. 

While many visitors to Bali still opt for the traditional hotel stay, a growing trend towards private Airbnb villas is emerging.

Here, look at the chart below: 

According to Airbtics, Bali is more famous for its Airbnb than regular hotels.

Another case study from 1,000 travellers also shows that 60% choose Airbnb over hotels. 

The trend is clear: more travellers seek private Airbnb villas for a genuine Balinese experience. 

With the emerging popularity of Airbnb rentals, here are three things you must consider for making a profitable Airbnb rental in Bali:

1. Choose the right property.

The uniqueness of your property is a significant factor in profitable Airbnb rentals. 

Offering a personalised experience can set your Airbnb rental apart. 

For example, it offers amenities and services that enhance their stay-high-speed internet for business travellers, a fully equipped kitchen for families, or eco-friendly amenities. 

Incorporating outstanding elements can significantly increase your rental’s appeal, eventually leading to good reviews and repeat bookings.

Also, consider having a rental property that caters to short-term and long-term rentals. 

Airbnb’s global platform reaches a wide range of audiences, from budget-conscious solo travellers to luxury holiday seekers. 

These features attract a diverse range of guests and allow you to set a higher rental price. 

Catering to this diverse audience can help ensure a continuous stream of guests, reducing the risk of vacancies.

Based on the research from Ilot Property, the graph above shows five high-demand areas in Bali. 

The graph shows that Canggu, located in the Badung region, leads almost 50% of rent-seekers because this area is famous for its beaches, cultural landmarks, and stunning views. 

Finding a property in Bali can be challenging and costly if you don’t know where to start.

And doing your research can be very time-consuming and labor-intensive. 

You can save time by speaking with a Bali property expert and getting their advice on how to find and choose a unique type for your property. 

2. Location

Choosing the right location is crucial for your rental property.  

A strategic location can ensure your rental property has a consistent income and maximizes investment returns.  

The key is to choose a location that not only resonates with your personal preferences but also appeals to a broad spectrum of Airbnb users.

Properties in or near popular tourist areas are more likely to appear on the first page of Airbnb search results, increasing their exposure to potential renters. 

Based on Medcom Property’s data, here are five demand areas in Bali for your property rentals. 

The more popular the place, the more it resonates with tourist destinations and the better returns you can get from your investment. 

Beyond location, you must abide by local laws to ensure your rental transaction is safe. 

3. Make sure you meet all the legal requirements.

Only Indonesians can directly own buildings selected as villas and homestays. 

However, as a foreign investor, you can establish a foreign-owned company (PT PMA) in Indonesia with 100% foreign ownership to rent a villa daily or weekly. 

With this business structure, you can buy land in Bali’s tourist areas and manage the buildings there, including renting out the space for short- and long-term stays. 

But there are more efficient ways of doing it than building a foreign company; you can also hire a management company specializing in villa management

Following your decision regarding the property type, confirm that each building has a Building Approval (PBG) license.

This license was formerly known as a building permit (IMB). 

A PBG will specify its authorized use and help you build a property for your Airbnb villa rental.

For example, you can specify how you wish to run the building in this agreement, including whether or not to offer short- and long-term rentals. 

For expats, partnering with a local agency can make your investment process more manageable. 

These partners can assist in navigating the legal requirements and ensuring compliance with local regulations.

Another thing to consider is how you price and advertise your rental property.

Now that your property is organized, it’s time to promote your rental company. 

One of the critical benefits of Airbnb is its ability to implement a dynamic pricing strategy. 

It means adjusting your rates to reflect seasonal demand, local events, or even last-minute booking trends. 

Unlike traditional rentals that rely on long-term leases, Airbnb properties can cater to a wide array of guests all year round. 

This diversity reduces the risk of income loss due to vacancies or market downturns. 

Moreover, Bali’s year-round appeal as a tourist destination ensures a consistent flow of visitors, sustaining rental demand. 

Seeking advice from local real estate experts can aid in developing an effective pricing strategy because they know the current market trend in Bali.

Are you ready to start your Airbnb property rental in Bali?

Our team is available to assist you. Use the form below to schedule a free consultation, or email us at office@ilotpropertybali.com

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