Buying Property in Bali: Key Things to Know
- Olya Blog
- Jul 4
- 5 min read
Hi,
Before starting our development project, Serena Villas Uluwatu, Santiago and I spent a lot of time learning how everything works in Bali. Even though Santiago has several years of experience building here, we still wanted to avoid mistakes and be fully prepared.
Today I’d like to share with you essential information about buying property in Bali.
Originally, I posted this on my www.olyablog.com. There were 3 posts on how to invest in Bali for people who are interested in such an endeavour and looking for information. In case you want to read the full series, you can find it here:
But in this post, I want to show you key notes — what to pay attention to when you start looking for property in Bali. So let’s start:
Choosing a Reliable Partner
The most important thing when investing in real estate in Bali is to choose a reliable partner. This is especially important if you are not on the island and cannot control the process yourself.
Your developer or builder is more than a contractor — they are your long-term partner in making your dream a reality. To find a reliable one, consider these questions:
How much experience do they have building in Bali?
Can they show you completed projects or ones currently under construction?
Have previous clients been satisfied with their properties after completion?
Experienced developers understand Bali’s unique challenges and have portfolios that speak for themselves.
Partnering with Reliable Developers
Choose trustworthy developers and ask for comprehensive information about the property, including video calls from the site, photos, and drone footage. Check nearby facilities and their reviews to ensure the location meets tourist expectations.
Reliable developers should provide a clear understanding of the property’s advantages and future investment prospects.
Buying a Ready-Made Villa/Apartment or Off-Plan Property
There are two main options for investing in real estate in Bali:
Buying a ready-made villa or apartment
Buying off-plan property
What is Off-Plan Property?
Off-plan property is property that is not yet built. This can be a good option for investors who want to get a lower price. However, there are also risks involved, such as the developer going out of business before the property is completed.
If you are considering buying off-plan property, it is important to do your research. Here are a few tips:
Ask for referrals from friends, family, or business associates who have invested in real estate in Bali.
Read reviews of developers online.
Make sure the developer is licensed.
Get a lawyer to review the developer's contracts.
Location Matters
Your rental income and return on investment (ROI) heavily depend on the property's location. Tourists prefer accommodations near the beach with surfing opportunities, good infrastructure, and proximity to restaurants, cafes, shops, gyms, yoga studios, entertainment clubs, and tourist attractions.
The most popular investment areas in Bali are Canggu, Ubud, and the Bukit Peninsula, including Uluwatu. Each area offers unique benefits and attracts different types of tourists.
Conducting Due Diligence
Before committing to a long-term lease, ensure thorough due diligence is performed. This includes verifying land ownership, checking for any legal disputes, confirming zoning laws, and ensuring there are no outstanding taxes or mortgages.
Property due diligence should also verify land boundaries and the legal status of access roads. This helps avoid issues such as multiple claims on the same piece of land or difficulties accessing your property.
Understanding Zoning Laws
Bali’s land is divided into zones (yellow, red, pink, orange, green) dictating the permissible activities. Building on green zone land, which is often illegal and destructive, may lead to future complications despite temporary benefits.
Ensure the property is in a zone that allows the intended use, such as renting out to tourists.
Leasehold vs. Freehold
Leasehold (Hak Guna Bangunan) allows leasing land for 25–30 years with potential extensions. Freehold (Hak Milik) is only available to Indonesian citizens and offers the highest property rights.
Foreign investors typically use leasehold agreements, so it’s crucial to understand the terms and renewal conditions.
Staying Involved from Afar
Construction takes time, and if you’re not based in Bali, staying updated is essential. A reliable developer will provide regular updates via photos, videos, or drone footage. Weekly reports and group chats can help you stay informed without being overwhelmed by small decisions.
Payment Terms and Cooperation When Buying Property in Bali
When formalizing your investment, you’ll likely sign several agreements. These might include contracts for the land lease, construction, and additional services like property management. Each contract should clearly outline:
Payment schedules and amounts.
What’s included in the cost.
Any additional charges you might face.
Who handles permits and approvals.
The roles and responsibilities of both parties.
Identifying Hidden Costs
Some additional costs may surprise investors if not discussed early. These might include:
Legal and notary fees for land leases.
Permit or tax fees for foreign investments.
Infrastructure expenses, like road access or utilities.
These costs aren’t always “hidden” but are often overlooked. A good developer will address them upfront. Working with a lawyer familiar with Indonesian law ensures your contracts are clear and transparent.
Payment Structure
Payment plans can vary depending on your agreement. Some developers prefer staged payments tied to construction milestones, while others require larger upfront sums. Typical payment stages include:
An initial deposit to secure the land.
A first payment before construction begins.
Installments during construction.
A final payment upon project completion.
Villa Management: A Key to Success
Congratulations — your villa is complete! But what’s next? Managing your property is crucial if you plan to generate rental income and enjoy steady returns. A professional management company should handle all daily operations, including:
· Marketing and ensuring high occupancy
· Staff management and quality control
· Managing bookings and guest communication
· Check-ins, check-outs, and cleaning services
· Maintenance and inventory management
· Tracking income and expenses
· Regular reporting to investors
·
Choosing the Right Management Company
Look for a company with proven experience managing properties in Bali. Check online reviews, visit managed villas, and evaluate their condition. If the company is new to Bali, ensure their staff has relevant experience elsewhere.
The agreement should clearly outline the company’s responsibilities. Most management companies in Bali charge a percentage of rental income (usually 10–20%). Confirm what’s included in this fee and what might incur additional charges, such as marketing, utilities, or OTA commissions.
With a professional management company, you can focus on enjoying the returns from your investment while avoiding unnecessary stress.
I hope it was useful for you.
If you have any questions, feel free to reach out.
Thank you for reading.
Olya
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