Bali real estate investment in 2023: the best returns in the world?

In recent years, the Indonesian real estate market has started to attract more and more investors from all over the world. Bali is a wonderful place to travel and vacation, and its beautiful scenery has enchanted millions of people over the years. However, buying real estate is a different matter altogether. Let’s take a look at the reasons why you should consider buying an apartment there.

The main factors of attractiveness of buying real estate in Bali

Bali has captured the attention of the world and is widely recognized as a first-class destination. The island’s fame spreads far and wide, and TripAdvisor, one of the world’s premier travel resources, consistently ranks it among the top destinations in the world.

This worldwide recognition has a direct impact on the real estate market as the increased number of tourists fuels the demand for housing. It is clear that buying real estate in Bali is a good investment. You can take advantage of this opportunity by turning even a modest home into a profitable investment.

So, among the significant factors of the island’s attractiveness, we highlighted the following:

  • high level of profitability. Just compare: the yield on real estate in Turkey is 3-5%, in Cyprus – 2-4%, in Dubai – 6%, and in Bali – from 12% to 15%. Impressive, isn’t it?
  • annual growth of real estate value is equal to 15-17%;
  • comfortable warm climate and loyal policy of local authorities, ensuring a regular flow of tourists;
  • fairly low prices for buying real estate. Yes, don’t be surprised: the paradise island of Bali is not even in the top ten most expensive places to invest;
  • the resort area is almost completely built up, which allows maintaining relatively low competition between landlords.

3 main strategies for investing in Bali

If we are talking about buying real estate specifically for further income generation, there are 3 options to consider:

  1. Purchase of housing at the construction stage with further resale after delivery of the finished object.
  2. Buying housing at the construction stage and then renting it out independently.
  3. Purchase of already finished housing for further renting out.

Of course, each of these strategies has a number of advantages, which we will now try to highlight.

Purchase of real estate at the construction stage for the purpose of resale

Firstly, one of the main advantages of buying a home at the construction stage is the opportunity to purchase a property at a lower price. Usually, developers offer special conditions and discounts for first-time buyers in order to attract investors and secure construction financing.

Secondly, at this stage there is an opportunity to make adjustments to the design and finish of the premises. Developers often offer investors a choice of different finishing options, such as flooring type, wall color or materials for kitchens and bathrooms, which will increase the attractiveness of the property for buyers.

Thirdly, due to the annual increase in the value of real estate in Bali, you will be able to sell a ready-made housing much more expensive than its original price (depending on the area and class of the object, the cost increases by 10-20% per year).

Finally, an undeniable advantage is the fast construction time – on average 1-1.5 years.

Purchase of real estate at the construction stage for the purpose of delivery

This strategy gives you the opportunity to earn income not only from the increase in price after construction is completed, but also from rental payments. Even in the most unfavorable scenario, you will be able to sell the property for the same amount you paid for it at the construction stage.

This makes this strategy not only profitable but also secure. An important role here is played by the management company that will be in charge of renting out and managing your property. As a rule, the management company handles such issues as:

  • advertising your property;
  • conducting market analysis and building a sales strategy;
  • communicating with tenants;
  • solving household issues and problems.

Buying ready-made real estate

This option is not the most profitable, but it can be chosen if you managed to find a very attractive object at a good price. If you buy a property at market price, you should realize that it will take you longer to break even.

The main pros of this type of investing:

  • you’ll be able to rent the place out right away;
  • no risk of construction disruption.

However, it is worth understanding that for if this object has long been commissioned, you will probably have to make cosmetic repairs, replace some of the furniture with new ones and so on.

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