Property Investment Guides — Bali Real Estate

Buying property in Indonesia takes a long process and is challenging. Doing property inspection is one of the most vital processes you must do before committing the property transaction – this process is called property due diligence.   What is due diligence in property/real estate? Why does it matter? This article will explain the important aspects and what you should do when finding issues in the due diligence process. Let’s begin!   What is Property Due Diligence and Why Does It Matter? Property due diligence is a comprehensive investigation or analysis of property financial, physical, legal, and environmental conditions in the area where the property is located. This activity is conducted by the buyer before dealing with any property transaction decisions.   If you want to do a property investment, this is a vital process because it can help you to minimize and avoid unwanted risks and conflicts regarding your property in the future.   Due diligence is an in-depth and time-consuming process, regardless of the type of property you buy – villa, house, apartment, or land.   6 Important Aspects of Property Due Diligence Inspection Here are 6 important aspects of property due diligence inspection, as follows:   1. Legal Inspection The first factor you need to do in property inspection is the legal one. Verifying the legal and ownership status of the property is crucial in property due diligence.   You need to encompass the examination whether the property has liens, encumbrances, and potential title defects.   Don’t forget to review permits, leases, legal documents, and contracts to make sure your dream property is clean from legal issues.   2. Physical Inspection Besides legal inspection, physical inspection is also important for you as a buyer before making a final decision on the property transaction.   This process helps you to assess the systems, structure, and amenities provided by the property. Physical inspection can also give you an insight if there are any defects in your property or its facilities.   3. Financial Inspection Everyone who wants to start a property investment must dream of generating income as much as possible. So, understanding cash flow assessment and the property’s income potential is vital for investors.   This is the function of financial inspection.   Conducting a financial inspection provides you valuable insights into the property’s long-term return on investment (ROI) outlook.   4. Environmental Inspection Not only the property itself, but everything around the property is also important to be inspected. Moreover, in today’s eco-conscious world.   Conducting an environmental inspection provides you an information on contaminations or potential hazards that possibly exist around the environment of the property. This information is valuable for you to mitigate risks and compliance with environmental regulations.   The factors you can check regarding environmental inspection are: - Soil quality - Air quality - Water quality   5. Land Zoning Review If you want to invest in land, understanding land zoning regulations is vital for you to avoid legal issues.   Land zoning regulations give you an insight into determining the property’s intended use.   There are some intentions of land use – agricultural, residential, business, tourism, and more.   For instance, if you intend to acquire land (whether through Leasehold Title or HGB title) to construct a villa, ensure that the chosen land is legal for villa construction.   This review also allows buyers to evaluate the land’s potential opportunities or risks in the future.   6. Market Analysis Recognizing market analysis is crucial for grasping the property’s value and potential in the market. Analyzing market trends, competition, and demand empowers you as a buyer to comprehend the property’s growth prospects.   Pre-offer Due Diligence Before making any offer on the property you intend to have, you can do a pre-offer due diligence to have insights about the environmental condition around the property.   There are some factors you need to know in pre-offer property due diligence, as follows:   1. Median rents and vacancy rates. 2. Property value trends. 3. Job growth. 4. Population growth. 5. Neighborhood and school. 6. Crime rate. 7. Renter-occupied households percentage. 8. Household income levels.   Financial Due Diligence in Property Profit is the ultimate goal of property investment. If you’re a property investor, you need to find out the projected profit you’ll generate from your property. The pro forma statement that you’ve done earlier helps you to make a final decision regarding financial due diligence.   Here are the lists you need to check when conducting financial due diligence on the property, such as: - Real estate valuation, to know if the property you want to have is overpriced or at a good price. - Fees and taxes when you have the property whether through HGB Title or Leasehold Title. - Maintenance costs, including water, electricity, and internet costs. - Decoration and repairing costs. - Evidence of no debts on mortgage, utility bills, or taxes. - The prices on other similar properties in the same area where the property you want to buy is situated.   Physical Due Diligence in Property As a buyer, you must ensure that the property you want to buy is in good condition. Physical due diligence in property includes the following: - Interior and exterior condition. - Utilities. - Mechanical systems. - Structural items. - Drains, driveways, and sidewalks. - Finishing materials condition. Make sure they’re safe. - Inspection of pests and insects.   Legal Due Diligence in Property Legal is a factor that you can’t ignore at all when investing. Understanding legal factors in property due diligence helps you avoid law issues.   The lists of legal due diligence in the property include: - Title documents for knowing who owns the property. - Encumbrances – inheritance or mortgage. - All needed permissions (in case the property is still under construction). - Rules of renting out the properties: additional permissions, insurance, restrictions, and so on. - Renovations. - To find out if the property is under dispute or not.   Property Due Diligence Issues After the inspection, sometimes the buyers know that the property’s condition is below expectations. This condition is possibly happening to you as well.   You have 3 ways to respond to the property condition – refuse the deal, you can fix the issues, or ask the seller to fix the issues.   If the seller fixes the issues, an amendment should be added to the contract.   However, there are some issues that sellers impossible to handle, like noisy environments, high crime rates, or severe construction conditions. If you face these situations, you have the option to either purchase the property despite its shortcomings or decline the offer and find an alternative property.   Make Your Buying Property Process Seamless Buying property is time-consuming and challenging. To ensure the potential success of your property investment, it’s vital to assess every aspect of the property and ensure that it aligns with your expectations. One of the processes you must go through is property due diligence.   When engaging in property due diligence, it’s crucial to focus on various aspects – physical, legal, financial, and environmental aspects. Considering these aspects will contribute to securing the best property.

Bali is categorized as one of the most favorite place to spend golden years. There are some reasons why people want to retire in Bali – the vibrant society, rich culture, beautiful natural landscapes, the sunshine, etc. Knowing the living cost, retirement visa in Bali, and popular places on the island will help you live in Bali and craft your retirement time into a haven life.   Pros and Cons Retiring in Bali Relocating to Bali to enjoy retirement is not a new thing. There are dozens of opinions out there that tell you why Bali is a perfect choice for retirees.    According to a survey carried out by Living International, Bali ranks fourth among the best places for retirees in Asia.   Despite Bali has been claimed as a haven for retirees, some factors will enable you to make a fair assessment of Bali.   Individual perceptions of Bali may vary, despite the island providing many exciting experiences. If you want to retire in Bali, it’s advisable to weigh the following pros and cons below.   Pros of Living in Bali The pros of living in Bali, are as follows:  - Affordable living cost. - Beautiful beaches, mountains, waterfalls, and rice fields panorama. - Friendly locals. - Great culinary destination. - Unique traditions. - A potential place to invest, including property investment.   Cons of Living in Bali However, there are some cons that you will face if you want to retire in Bali. Let’s explore the cons of living in Bali: - Lack of public transport system. - Traffic jam. - Hot temperature in dry season. - Many stray-unvaccinated dogs.   Living Cost in Bali If you are looking for a place where you can enjoy a golden time and spend your expenses affordably, Bali is a great choice.   For your information, here is a comprehensive breakdown of the living costs in Bali:   1. Accommodation (Villa or Apartment) Villa or apartment accommodation is the primary consideration for foreigners who want to live and retire in Bali. The price of leasing a villa or apartment may vary based on the type, amenities, and location.   For instance, a luxury, fully-furnished villa with a private pool, water, parking space, Wi-Fi, security, and cleaning services can cost you around IDR 200 million to IDR 400 million rupiah per year.   Besides yearly rental, you also can lease a villa for a long time (until 30 years) in Bali through a leasehold title.   If you intend to have a villa through a leasehold title, you can seek a trustworthy property agency in Bali to make your dream come true. BVR Property provides luxury and serene villas in some strategic and sought-after places across Bali.   2. Groceries Groceries like fresh fruits, vegetables, eggs, milk, meat, bakeries, and poultry are sell at an affordable price on the island. For instance, you just need to prepare IDR40 thousand for 1 kg of chicken.   You can easily find supermarkets in Bali, equipped with air conditioners.   3. Dining Bali offers culinary haven with various kinds of cuisines – Indonesian, Japanese, Italian, American, and more.   Additionally, you can savour your taste buds affordably with local foods in a local shop. However, if you more prefer for trendy cafes or beach clubs, the price would be higher.   4. Bike or Car Rental Do not afraid about transportation while you are staying in Bali. Bali provides easy access to bike rental or online transportation. The price for online transportation are varies depending on the route, but still affordable – from IDR 10 thousand to IDR 50 thousand. For Bike or car rental price is based on the type of bike or car that you choose.   Retirement Visa in Bali If you are decided to retire in Bali, there is one requirement you must meet – it’s a retirement visa. According to the Immigration General Directorate (Direktorat Jenderal Imigrasi), the prerequisites for obtaining a retirement visa in Bali are:   1.  At least aged 55 years old. 2. Photocopy of the original passport that is valid for at least 18 months. 3. Have health insurance and legal liability to third parties in the civil sector in your origin country or Indonesia. 4. Proof of your retire fund of at least USD1500. 5. Curriculum vitae 6. Evidence of residing in Indonesia through the acquisition of accommodation facilities of at least USD35 thousand, OR monthly rent payment of at least: - Jakarta, Bali, and Bandung (USD500). - Other areas in Java island, Medan, and Batam (USD300). - Other areas that are not included in the point one and two (USD200). 7. The declaration will employ at least two Indonesian citizens.   5 Popular Places to Retire in Bali Bali offers you numerous sought-after places to stay. Here, we will explain five places you might interested in staying at if you want to retire in Bali, such as:   1. Sanur Sanur is a great choice to live in if you are looking for a place that is a family-friendly and relaxing environment. This area is located in Denpasar City, the capital of Bali.   Beaches in Sanur offer you a beautiful panorama of sunrise and the jogging track. You also can find many local shop we called “warung” and street food as you wander along the seashore.   2. Ubud Ubud is another place where you will able to enjoy the serene and slow-paced life with your loved ones. This is a place where a healthy, artsy, and bohemian lifestyle comes together. Do you want to start a zen, serene, or even vegan lifestyle? Ubud is perfect for you to retire in Bali!   Notably, this place was a filming location for the movie “Eat, Pray. Love”.   3. Seminyak Seminyak stands out as a top tourist destination with many choices of clubs, beaches, restaurants, and boutique-style shops. More than that, this place is also great for those who prefer to experience the hustle-and-bustle atmosphere of Bali.   4. Canggu Canggu has experienced a significant development and trend after the COVID-19 pandemic in Indonesia. This area is situated a few kilometres north of Seminyak, offering beautiful beaches, clubs, restaurants, pubs, spas, and cafes.   There are so many nomad expats and young foreigners who live in Canggu. Finns Beach Club and Atlas are located here.   Canggu is arguably the best place if you want to retire in Bali with a forever-young lifestyle.   5. Lovina Lovina is a brilliant decision if you want to spend your golden years in the distinct region without leaving the beauty of Bali. This location isn’t like the four areas previously mentioned – located in the north of Bali, Lovina is located in Singaraja Regency, North Bali.   Here, you can enjoy the morning with the dolphin pod.   5 Tips to Have a Pleasant Retirement in Bali Here are some tips to have a pleasant retirement in Bali, as following:   1. Adaptation Adapting to the new environment and life is essential to start your retirement in Bali.   In Bali, having a holiday for weeks is different than living life for a long time. Feel the real life in Bali by trying local foods and living in society. Try these for at least three months to discern which location is best for you.   Do not be afraid to adapt. Here, expats who live in Bali can help you to cope with your new life.   2. Consider the Housing in Bali There are many choices to live in Bali – apartments, residences, and luxury villas.   Looking for the best for you is not easy and time-consuming. Moreover, you have to know property law in Bali to make your housing process seamless. Under these circumstances, it’s advisable to seek assistance from a trustworthy property agency in Bali.   3. Hire Indonesian Helpers As we explained previously, one of the prerequisites for obtaining a retirement visa is making a declaration that will employ at least two Indonesian citizens. Hire two Indonesian citizens as your private chef, gardener, or cleaner.   4. Have a Medical Insurance Make sure to have medical insurance in Bali. Your coverage can take the form of either personal insurance or travel insurance.   Also, do not forget to research what is the best insurance for you.   5. Have an Investment One recommended suggestion if you want to retire in Bali comfortably is to consider investing, especially a property investment.   Bali stands out as a favorite destination for people in the world. This is a big chance for everyone with an investment in Bali – it’s a promising high yield of ROI.   Having a leasehold title or HGB title for a villa with a Pondok Wisata license is a way to run a vacation rental business. A trustworthy property agent in Bali can assist you in this process.   Here are the links for you to learn before having a property investment in Bali: - Pondok Wisata License. - HGB Title. - Leasehold Title.   Ready to Have a Haven Golden Years? Retirement is a big moment in your life. So, make sure to make it special and comfortable. Enjoying the culture and nature of Bali is one of the options for people to spend their golden years.   There are some advantages if you want to retire in Bali – affordable living cost, unique culture, beautiful sceneries, nice and welcoming people, and a golden opportunity to generate more income through property investment. These factors  will make your retirement feel like a haven.

Bali is known to be one of the world’s favorite holiday destinations for travelers from all over the globe. Besides that, Bali also has a very diverse vacation rental business. Today, we’ll discuss the commercial rental license required to run and operate a vacation home in Bali – Pondok Wisata License (Homestay Operational License).   Dubbed as top 3 travel destinations nearly every year, Bali is also known for its opulent and attractive property investment market. Vacation rental business in Bali promises a high yield of ROI, remembering Bali is visited by millions of people every year.   Villas that are being used for daily rentals needs a valid Pondok Wisata License (alos known as Homestay Operational License) to make the business run legally. Getting this license is not complicated as long as the property requirements are met.   In this article, we will discuss about what Pondok Wisata is, required documents to obtain a villa rental license, and how to apply for such a license.   About Pondok Wisata License Pondok Wisata (Homestay Operational License) is a building permit that allows you to operate your property for vacation rental business purpose in Bali.   Pondok Wisata License is required for villas with up to three units (under the older license) or up to five bedrooms (under the newer license). If the property is larger than that, it requires full hotel license, known as Hotel Melati License.   As the scale of property covered by Hotel Melati License is larger, there are some additional legal restrictions to obtaining it.   Pondok Wisata License is can only be under the name of an Indonesian citizen or a valid PT PMA with scope for villa management business. The duration of this license is 5 years, and the holder of the license can extend the duration.   However, should the license in the name of an Indonesian citizen the license is more permanent.   The only way for foreigners to request Pondok Wisata License is they must set up PT PMA in order to request for obtaining it.   For Indonesian citizens, they can request to obtain Pondok Wisata license without having a company. Most the time, when licenses are applied for the PGB (previously, IMB – Building permits), this villa rental license application is done simultaneously.    Homestay Operational License can only be issued in “tourism zone” area.   So, to make sure that your property can obtain the legal license required to do daily rentals, you have to double check that you ITR (Zoning) are within the commercial zones.   Pondok Wisata Required Documents If you want to run a vacation rental business and request Pondok Wisata License for your villa, here are the 5 essential documents required, such as: - PBG documents (Building approval documents). - UKL and UPL documents (environmental management and monitoring system documents). - Company Registration Certificate (SIM). - SITU/HO documents. - NPWP number (tax number).   6 Steps in Applying for Pondok Wisata License There are some steps you must follow to obtain Pondok Wisata License. Here are six steps you need to pay attention when applying for this villa rental license.   1. The Ownership of The Villa If the villa’s holder is an Indonesian person, he/she must have the villa through: - Hak Milik, - Hak Guna Bangunan, or - Hak Sewa/Leasehold Title (as long as there’s a deal between lessee and lessor/landlord in the clause) – then you are able to register the licenses and PGB building permits in your respective landlords name.   However, if the owner is a foreigner with PT PMA, he/she must have the villa through: - Hak Guna Bangunan, or - Hak Sewa/Leasehold Title (as long as there’s a deal between lessee and lessor/landlord in the clause).   2. Property's Standards Make sure that the villa follows local government’s standard.   3. Required Documents Prepare all required documents for applying a Pondok Wisata License so that the process runs seamlessly.   4. Submit the Application You can submit the application for Homestay Operational License to the local tourism office.   5. Wait for Approval After you submit your application, it take time to get the approval. There’s waiting period for your application to be reviewed and the villa may be inspected.   6. Obtain Pondok Wisata License If all criteria are completed and the local tourism office accept your application, you will obtain your Pondok Wisata License.   Getting Pondok Wisata License takes a bit of time and may require some effort should you apply for it.     So, please make sure you have completed all the criteria’s so that your process of getting the license is easier. Besides that, you can seek assistance from legal advisor or notary to help you getting the villa rental license.   Our Properties with Pondok Wisata License There is an easier way for you who wants to run a vacation rental business in Bali.   Besides preparing Pondok Wisata requirements for obtaining “Villa Rental License”, an alternative approach is to directly acquire ownership title such as Hak Guna Bangunan or Hak Sewa/Leasehold Title for a villa that already holds Pondok Wisata License.   This is generally applied for at the same time at the PBG (previously, IMB) on most existing properties and makes it easier for most investors to not have to run through the process of application again.   Here are some of BVR hottest villas that already holds Pondok Wisata you can have through Hak Guna Bangunan or Hak Sewa:   - BLI1774 – Impressive Freehold Gem in Batu Bolong, Canggu. - BLI1713 – Wonderful Contemporary Villa in Ubud. - BLI1701 – 4 Bedroom Luxurious Villa in Seminyak. - BLI1632 – Aesthetic Apartment in Nusa Dua. - BLI1630 – Luxurious Beachfront Apartment in Nusa Dua. - BLI1603 – Tropical Luxurious Villa in Seminyak. - BLI1550 – Luxurious Tropical Hidden Gem Villa in Bukit. - BLI1546 – Luxurious and Peaceful Resort in Canggu. - BLI1507 – Tranquil Villa in Singaraja, Bali. - BLI1363 – Beachfront Property in Bondalem, North Bali.   Nevertheless, it is important to bear in mind that you can engage in a vacation rental business only if you have the title (Hak Guna Bangunan or Hak Sewa) through PT PMA.   In another way, you can have the villa managed by a professional management company that holds the relevant company structure to run rentals.   As an individual without a valid company or valid work permit in Indonesia, running a rental villa is illegal. So make sure you have your bases covered.   Ready to Invest in Bali? Bali is one of the most promising places in Indonesia for everyone who wants to run a vacation rental business. If you’ve a villa that you want to operate as a vacation rental business, make sure that the villa has a villa rental license called Pondok Wisata.   Pondok Wisata License allows you to run a rental business for your villa. If you’re a foreigner, you only can apply this license for your villa if you possess the villa title (Hak Guna Bangunan or Hak Sewa) through PT PMA, or as most villa owners, the licence can be in your landlords name which makes it easier.

Buying a leasehold in Bali is a promising investment. But, foreigners don’t really understand the rules. Having a leasehold title is simple – as long as you know the rules. If you’re a foreigner who’s looking for a property leasehold opportunity in Bali, you’re in the right place.   Here, you’ll get a brief pocket guide to start your property investment journey in Bali.   Intro: Leasing Properties in Bali Before we start discussing leasehold in Bali, we need to know, what is leasehold?   Leasehold is a kind of contract that allows you, as a foreigner, to use and live in the property.   Not only for living, leasing properties is a good option for you who wants to invest in Bali, whether it’s villa or land. Why?   Here are the reasons: - It’s more affordable to lease property or land than to purchase the freehold titles.   - Depending on the rental licences or zoning of the land or villa, some commercial leasehold titles allow you to rent it out or even run the property as a holiday rentals business.   - The process of leasing villas or land is fairly straightforward. You don’t need certificates like Hak Guna Bangunan (HGB), Hak Pakai (HP), and PT. Penanaman Modal Asing (PT. PMA) setups in order to complete the process of leasing a part of paradise.   - When you settle on the perfect villa or land, the sellers are liable to pay leasehold taxes and the buyers pay the notary 1% fee.   Understanding Leasehold Title in Bali Understanding the rules about leasehold in Bali is critical. Especially, if you want to start your investment journey and earn money through leasing a villa or land in Bali. You’ll find that property leasehold investment is much easier if you know the rules that are applied.   One thing you have to note – every country has different rules and regulations regarding property leasehold laws, including in Bali.   Leasehold is a contract term used to describe an asset that is being leased – usually, properties like villas or lands, commercial spaces and some hotels are on leasehold titles as well.   This title allows you to own a property for a certain period of time, usually for 30 up to 80 years – it’s a long-term contract.   There are two parties involved in this agreement – you, as the user of the property (lessee) and the rightful owner of the property (Landlord/lessor).   You (lessee) agree to a contract with the rightful owner (lessor) for the right to use the property. This agreement also includes the payment and the period of the lease. The lessor still has the full ownership of the property.   Due to this being a long leasehold you will never hold the actual title of the property, and this is only for the number of years stipulated on your master lease agreement.   Most leasehold contracts have “option to extend the land lease period” written into the agreement at market related prices at the time of extension.    When the contract expires or you do not exercise your right to extend the lease, the property rights will be reverted to the rightful owner.   Price Expectations on Leasehold in Bali Price expectations on leasehold in Bali varies depending on many factors such as location, size, facilities, and lease duration.   For instance, if you want to lease a villa in Bali, the price expectations of villa leasehold in Bali ranged from USD 100.000 to USD 4.000.000 for periods up to 30 years.   Make sure to know and consider all the factors of the villa (location, size, facilities, price, and lease duration) before making a single agreement with the landlord or seller.   Despite the various prices, leasing properties in Bali for investment still promises you to yield a profitable ROI. You can run a short-term rental business through a property you lease – like a villa. As long as you and the landlord have an agreement for using the villa for vacation rental business and/or you get the leasehold title through PT. PMA, you're able to run the business legally.   Please note that all legally run villas need to have the correct rental licences in place, as well as a legally registered business should you wish to rent the villa out yourself.   Another easy way is to involve a management company to take care of the rental side of the property.   This industry is growing in some sought-after areas in Bali. For instance, in Uluwatu, Seminyak, Sanur, Canggu, and Pererenan.   Top 5 Tips for Leasehold Purchase in Bali Everyone loves convenience, including when doing a leasehold purchase in Bali. Here are top five tips that make your leasehold deal easier. Let’s start!   1. Learn About Leasehold Title The first thing you need to do is learn and understand the property market. Specifically, on leasehold in Bali.   You have to know what a leasehold title is, the rules applied in Indonesia, and the price range. Do more research and pay more attention to areas like Uluwatu, Seminyak, Sanur, Canggu, and Pererenan.   Luckily, you've learned about that in this article!   2. Define Your Budget After you familiarise yourself with the property market in Bali, you can finalise your budget.   3. Collaborate with a Trustworthy Real Estate Agency Collaborating with a trustworthy and fully integrated property agency in Bali is highly recommended for you. Why?   A trustworthy property agency will help you to choose the best properties suited to your needs and budget requirements. They will help you negotiate and plan ahead.    More than that, a property agency can help you to do research on leasehold property prices in Bali, help you with contract management, and give you advice whenever you need it.   4. Negotiation Contract is a critical part of your leasehold negotiation. Make sure that the contract is clear, unambiguous, and has a win-win solution between you and the lessor.   5. Make the Deal Once both you and the lessor feel satisfied with the terms in the leasehold contract, you can go ahead with the deal.    A legal due diligence will be done by your chosen notary to ensure all the legal paperwork is in place, that the property or land has access. Once this is cleared you can settle the final amounts and receive the keys to your new home.   Get Your Dream Villa! Bali not only promises you beautiful landscape and culture, but also an investment opportunity. Having a short-term rental business in Bali is a good choice, remembering Bali is one of the most popular destinations for holiday makers.   If you are only starting out, and want to know about property leasehold in Bali, we will assist best we can.   Contact us today to start your journey towards leasing your dream villa.