Your Bali Property Blogspot

Property investment is recognized as one of the most popular instruments for creating long-term wealth. Investors can rent their property out to get passive income with a promising return on investment (ROI). In this article, we will explore real estate examples you can consider for investment.   Types of Property in Real Estate There are 4 types of property in real estate, as follows: - Residential Property - Commercial Property - Industrial Property - Land Property   Each of these types of property has its characteristics. It is crucial to understand all the types and examples of real estate, so you can choose what property you want to buy wisely and suit your property investment goals.   You will find out further about 4 types of property, as discussed below.   Residential Property Residential property is the most popular type of property for investors and provides you a place to reside. Investing in residential property enables you to enjoy owning a home and growing a feeling of stability. More than that, you also can generate income through residential property by renting it out.   Here are the examples of the most popular residential property:   1. Villa Villa is a building that looks similar to an upper-class or luxury landed house. It provides a garden, terrace, and external patio. Sometimes, it also provides a private pool with a beautiful panorama of a beach, river, forest, or ricefield.   A villa is usually located in a suburban area and independent of its surroundings. Besides that, the architectural style is also a factor that makes villas more “worthy” than ordinary houses. Several examples of villa architecture styles are modern, contemporary, classic, Balinese style, etc.   Villa is the most popular option for investors who want to start property investment in Bali. With the high potential of international tourists and beautiful sceneries, Bali promises a high return on investment.   If you want to have a villa in Bali, whether through leasehold or Hak Guna Bangunan title, cooperating with a trustworthy property agency in Bali is highly recommended to make your buying villa process seamless.   2. Landed House Landed house is the second option for you who want to invest in residential property. This property you can use to live with your family rent out as rumah kontrakan or rent a house for the local/domestic market.   3. Apartment Living in apartments has been increasing in Indonesia in the past few years. Apartments are often chosen by people who live in big cities that difficult to find landed houses. Apartments also offer strategic locations and are near major arterial roads.   4. SOHO (Small Office Home Office) SOHO (Small Office Home Office) is a hybrid apartment that you can utilize for living and commercial at the same time. This type of residential property is common in Jakarta.   Commercial Property The second type of property in real estate is commercial property, which entails higher initial investment, but also promises higher profit. If you want to invest in commercial property, securing a mortgage is essential. Seeking professional assistance can facilitate a smoother execution of your property investment plans.   Properties that are considered commercial property must built on commercial land (red zone).   Examples of commercial property are: - Retail store. - Industry facilities. - Offices. - Shopping centre.   Industrial Property Industrial property is one of the types of property you can consider to start a property investment. The property is typically built for manufacturing and warehousing purposes. If you want to consider industrial property, you need to understand and fulfil some legal requirements.   Examples of industrial property are warehouses, factories, logistic centres, and other production facilities.    Land Property Engaging in land investment offers different prospects for people who want to secure financially in the future. Land is also safe from damage, theft, and maintenance issues.

For you who want to generate income in Bali, property investment always offers a promising profit with a high yield of ROI. However, as an investor, you need to watch out for risks of property investment. If you understand what real estate investment risks are, you can avoid and minimize the negative impacts it might cause.   This article covers the causes of property investment risks and how to avoid all of them. Let’s find out!   8 Risks of Property Investment and How to Avoid? Here are 8 risks of property investment you must know, as follows:   1. Property Risk Property risk can be caused by two factors – natural (earthquake, flood, landslide, hurricane, etc.) or unnatural (caused by people, either unintended or maliciously).   There are some ways to minimize this kind of risk, such as: - Buy a prosperous and stable property, whether using HGB Title or Leasehold Title. - Do a due diligence before buying the property. - Buying trustworthy building insurance to help you to protect your property.   2. Market Risk This type of risk refers to unpredicted property or real estate market. There is a possibility that the property’s price may fluctuate and cause investors to struggle to understand the property’s projection.   Property market trends always go up and down by many factors. So, if you intend to invest in property, you should update on property price fluctuation.   Besides that, there’s a term called “property depreciation”. This means your property value decreases over time.   For an investor, how to avoid market risks of property investment? - Broaden the variety of properties in your portfolio. - Try to research to find a property that is below the market price. It provides a safeguard in case the market slumps caused by external factors.   3. Vacancies Property business demands are not always constant. As an investor, you are not always can to rent your property out. This naturally occurs in the property management life cycle.   Many factors influence tenants when they are searching for a property, such as: - Area growth (construction of public facilities). - Economic growth. - Political. - Government policies. - Property trends and prices (market changes). - Your service to tenants.   One of the risks of property investment is that no tenant rents out your property for a certain period.   Here are the best strategies for minimizing the risks associated with vacancies, as follows: - Buy and invest property in a growing area that provides various public facilities like schools, hospitals, parks, shopping centers, public transportation, and tourism destinations. BVR Property provides you villas and lands that you can get through leasehold or freehold. - Better to buy property that is located near the main road. - Ensure an ample financial buffer to prevent if you fail to find suitable tenants instantly. - Manage your property investment professionally and regard your tenants as stakeholders. Happy tenants are likely to extend their stay and may even promote your property to their relatives. - As market trends change, you need to be flexible when setting up your expectations.   4. Interest Rate Risk If this type of real estate investment risk increases, it will increase the monthly repayments as well. In other words, it harms your property investment.   How to minimize interest rate risk? - Practicing prudent cash flow management. - Choosing fixed-rate mortgages.   5. Unprofessional Tenants Having bad tenants is one of the risks of property investment. They can give your property investment a negative impact. Undisciplined payments, property damage, or complaints from neighbors are examples.   And an investor, here are the ways you can practice to minimize the risks of unprofessional tenants: - Have competitive but not excessively low rental rates. - Conduct regular property inspections during the tenancy. - Have a trustworthy insurance. - Choose an experienced and professional property manager to help you avoid unfavorable tenants.   6. Bad Location Location, location, and location. The first consideration for everyone who wants to buy a property or choose daily rental is location.   This is natural because the strategic location offers easier access to public services and transportation. If the property is located in a bad location, it will be harder to fulfil the market’s demands and generate income.   How to avoid choosing a bad location as one of the risks of property investment? Do research regarding the area where the property is located (facilities and access).   7. Lack of Liquidity Lack of liquidity is the risk that the property’s value is below market and forces investors to sell their properties at a rock-bottom price. Property investment is best for long-term returns. So, you must set a projection and goal in your investment for the next 10-30 years.   The solution to this problem is not easy. Here are the ways you can minimize lack of liquidity, such as: - Maintain liquidity in your property investment portfolio. - Think that property is a long-term investment. You must have solid goals in your investment. This kind of investment isn’t a good idea if you want a short-term investment.   8. Negative Cash Flow Negative cash flow is one of the most common risks in all types of businesses and investments, including property. This condition can lead you to lose money because your expenses (insurance, taxes, and mortgage payments) are higher than your income from your rental business.   Negative cash flows are caused by poor property investment analysis and research. So, the solutions to solve negative cash flow as one of the risks of property investment are: - Forecast your income and expenses. - Build a strong property portfolio. - You can consult a professional property strategist to help you manage the cash flow.

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.

Indonesia offers cultures, foods, and beautiful landscapes that make everyone who lives in feel like they’re living in paradise. If you experienced living in Indonesia with KITAS and extended it multiple times, you’re allowed to have KITAP in Indonesia (Permanent Stay Permit).   This article will explain from A to Z about KITAP – the requirements, how to apply, the benefits, and many more. So, let’s dive in.   Introduction to KITAP KITAP, or Permanent Stay Permit Card in English, is a stay permit granted to certain foreigners to reside and settle in Indonesia as a resident of Indonesia. This stay permit card is valid for 5 years and can be extended as long as the permit isn’t revoked.   Unlike KITAS, KITAP in Indonesia offers more advantages for you during your stay in this archipelago country. We will discuss the advantages of KITAP later.   Although KITAP offers you many advantages, not everyone is eligible to have this permit for living in Indonesia. What makes you eligible to have KITAP in Indonesia?   According to Undang-Undang Keimigrasian BAB 5 Pasal 54, you’re eligible to have KITAP if: a. If you’re a foreigner holding the limited stay permit (KITAS) as clergy, a worker, an investor, and as a second home. b. Family relations due to mixed marriage. c. Husband, wife, and/or children of a foreigner holding the KITAP permit. d. Foreigners who are formerly an Indonesian citizen and children who previously held dual citizenship.   Please note that KITAP will not be given to foreigners who don’t own a passport.   Here is one of the additional things you must fulfill to obtain KITAP in Indonesia stated in Undang-Undang Keimigrasian BAB 5 Pasal 60, as follows: - For point 'a' above, will be granted after the applicant has resided for 3 (three) consecutive years. - Point 'b' above, will be given after the marriage has reached 2 (two) years. - Point 'c' and 'd' above, can be given immediately. - Have a sponsor.   Someone with points 'b' and 'd' will be allowed to do work and/or business to fulfill the needs of life and/or his/her family.   Securing KITAP in Indonesia can be time-consuming, typically the whole process spanning around 3 months. However, the duration can be shorter and smoother if you seek assistance from a legal service.   KITAP vs KITAS: What are the Differences? Some people might be confused to understand what are the differences between KITAP and KITAS.   KITAP offers you a permanent stay permit with fewer restrictions. This permit is ideal for you who have KITAS already and want to live in Indonesia for a long time. Whereas, KITAS offers you a temporary stay.     6 Types of KITAP in Indonesia Here are 6 types of KITAP in Indonesia, such as:   1. KITAP with 5-year period of time. 2. KITAP for an indefinite period. 3. KITAP for work on a second home with a maximum 5-year period of stay. 4. KITAP is not for working on a second home. However, for the followers or family members, (husband/wife/children/parents) with a maximum 5-year period of stay. 5. KITAP for work on a second home for an indefinite period. 6. KITAP not for working on a second home. However, for the followers or family members, (husband/wife/children/parents) for an indefinite period.   6 Steps to Apply for KITAP Here are six steps on how to obtain KITAP in Indonesia, such as:   1. Find a Sponsor The first step you need to follow is finding a sponsor for your KITAP.   3 subjects are legal to become your KITAP sponsor. Those legal subjects are: - Spouse of foreigners who want to live in Indonesia. - Every Indonesian citizen can become your sponsor or guarantor. - PT PMA or Indonesian-based companies, provided that Indonesian-based companies have a minimum paid-up capital of IDR 1 billion.   2. Gather the Required Documents If you want to acquire KITAP, there are some documents you need to prepare.   Here are 7 documents needed, as follows: - Passport with active duration for at least 18 months. - KITAS (except for spouse KITAP). - Sponsor letter. - ID card (KTP) of your sponsor. - Taxpayer identification number (NPWP) of your sponsor. - A medical examination report. - A police clearance certificate (SKCK). - Letter stating you to commit not working in Indonesia and commit to employ at least two Indonesian citizens (for retirement KITAP). - Work permit (IMTA) and the legal paperwork of the company providing sponsorship (for investor, commissioner, and director KITAP).   3. Submit Your KITAP Application You can submit your KITAP application to the Immigration Office located in your residential area.   4. Pay the Fee For a KITAP application you’ve submitted, you need to pay Rp5,000,000.00. up to Rp30,000,000.00 depending on the KITAP validity period.   5. Attend the Interview After your application has been processed, the next step is attending an interview with an immigration officer. The interview will discuss about your application.   Please note that the interview will be held in Indonesian. So, if you can’t communicate well in Indonesian, having a translator is a good idea.   6. Obtain Your KITAP The Immigration Office will review your interview and will decide within 30 days. You’ll obtain your KITAP if your application is approved.   8 Benefits of Having KITAP in Indonesia Here are 8 benefits that confirm that having KITAP in Indonesia is attractive for foreigners, such as:   1. Family Sponsorship KITAP holders can live in Indonesia and be reunited with their spouses and families.   2. Indefinite Residency in Indonesia KITAP offers a prolonged residence of 5 years with renewal possibility. It means KITAP in Indonesia eliminates the requirement for yearly extension.   3. Work Permission Having KITAP (except retirement KITAP) also allows you to simplify the employment procedures and work in Indonesia without any additional permits.    4. Property Rights and Business Ownership KITAP allows investors and entrepreneurs to buy property rights or establish a business in their own names.   5. Indonesian ID Card (KTP) KITAP holders will have a right to hold an Indonesian ID Card (KTP) that applies for 5 years. The KTP can be extended if the holders want to renew their permanent stay permit.   6. Driver License (SIM) Not only KTP, but KITAP holders also have a right to hold a driver's license (SIM) as well. The SIM is valid for 5 years.   7. Banking Facilities Someone with a permanent stay permit in Indonesia can open bank accounts, apply for credit cards, or apply for loan easier.   8. Travel Benefits KITAP holders can enjoy the flexibility of multiple-entry re-entry permits (MERPs). These MERPs allow them to travel in and out of Indonesia seamlessly.   How to Extend Your KITAP? If you want to extend your KITAP, you must submit an extension application within the earliest period of 3 months and the latest is on the day the KITAP expires. The required documents and process are similar as making a new KITAP.   The extension application for KITAP in Indonesia is currently starting from Rp5,000,000.00 and the Immigration Office will review your application within 30 days