10 Key Questions About Investing in Bali
Canggu is one of the most popular areas in Bali for apartment investments, and it’s easy to see why. This neighborhood attracts both tourists and digital nomads, ensuring stable demand for rentals. If you’re considering investing in Bali apartments, here are answers to key questions that will help you navigate the market.
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Why is Canggu considered a promising area for apartment investment?
Canggu combines everything needed for comfortable living and relaxation: proximity to the ocean, a variety of restaurants, cafes, sports and cultural venues, as well as coworking spaces for remote work. This steady demand makes Canggu especially appealing for investors focused on rental income. -
What types of income can be earned from apartment investments?
Investors can earn income through two main ways: -
Resale after construction: purchasing at the development stage and reselling a completed property can yield up to 30% profit.
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Rental: renting out apartments, especially premium units, can achieve payback in 5-7 years, while mid-range properties typically break even in 7-10 years with an average return of around 15% per year.
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Why is there high demand for apartments?
Canggu is popular among tourists and expats due to its unique atmosphere and developed infrastructure. Many visitors stay long-term, sustaining high rental demand even with limited property supply. -
What factors affect investment profitability?
Profitability depends on several factors: -
Location: apartments in Canggu are highly attractive due to infrastructure and proximity to the beach.
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Quality and design: modern complexes with amenities like pools, gyms, and coworking spaces attract tenants and enable higher rental yields.
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Service and promotion: professional management and effective marketing increase rental potential.
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What is the payback period?
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Resale after construction: can yield up to 30% profit within a year.
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Rental: offers an 11-15% annual income, with an average payback period of 7-10 years.
6. What taxes should be considered for purchase and rental?
In Indonesia, the sales tax on property is 11% of the transaction amount. For rentals, a 10% income tax is typically paid by the landlord.
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What are the main costs of maintaining apartments?
Key expenses include:-
Utilities (water, electricity, internet): about $100-150 per month for a two-bedroom apartment.
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Management: if hiring a property management company, their services typically cost 20-30% of rental income.
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What forms of ownership are available?
In Indonesia, two main types of property rights are available:-
Leasehold — commonly used by foreign investors, allowing property ownership for 30 to 80 years.
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Freehold — available only to Indonesian citizens and legal entities.
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What are the risks of investing in apartments in Bali?
Key risks include legal aspects, demand fluctuations, and potential legislative changes. However, choosing a reputable developer and a reliable management partner helps mitigate these risks. -
How to complete an apartment purchase?
The purchase process involves notarization and government registration. Notary fees are about 1% of the property value. For purchases under a legal entity, additional registration with government bodies is required.
These answers will help you understand the process of investing in Bali apartments, especially in Canggu, where strong infrastructure and high demand create favorable conditions for investors.
