For those who want to invest in real estate in Bali to generate rental income, purchasing a property under construction is an intelligent decision.
Buying flats in Bali for sale under construction allows you to maximize your return on investment by purchasing a brand-new property at a price below the market average. If you’re new to the concept, don’t worry. This article uses my experience as a leading property developer in Bali to explain the concept and benefits of buying property in Bali.
Purchasing a design-build property is when someone buys a property from a developer instead of an existing property.
There are many benefits for potential investors and buyers, all of which can lead to significantly higher returns on your Bali property investment.
The most attractive areas for tourism and investment
Despite the large area of the island, Bali has few areas suitable for construction. The central part contains volcanoes, rice fields, and jungles, and the infrastructure leaves much to be desired. The land is cheap, but there is no point in building tourist facilities here since they will not be in demand. The most expensive areas are along the coast, where many luxury hotels are located.
Based on statistics, Ubud is considered one of the most promising areas for construction. Real estate here pays for itself faster than in Canggu or Seminyak, where the cost of renting land is five times higher. At the same time, in terms of hotel occupancy, Ubud is similar to areas located along the coastline. Tourists come here all year round, as many retreat centers and sites for spiritual practices are concentrated here.
Ubud has a unique atmosphere. Those who visit the area once then come here constantly. Many call Ubud a mystical and highly spiritual place where tourists can completely disconnect from everyday life and forget about everyday problems. This is the spiritual and cultural capital of Bali, where you can not only achieve enlightenment but also get acquainted with the iconic sights of the island. Most visited places:
- · Monkey Forest;
- · Artists’ Trail;
- · Antonio Blanco Museum;
- · Temple of Goddess Saraswati.
You should choose an investment object based on its attractiveness to tourists, according to experts from Indonesia-real.Estate. Villas should stand out from the general background and have their flavor. Before construction began, the development company carefully studied the area and settled on a site near the Artists’ Trail. This attraction is visited by everyone who comes to Bali. The unique energy here is combined with amazingly beautiful landscapes and developed infrastructure. The villas are located on the mountainside, offering a magnificent view of the jungle – this is precisely the peculiarity of the complex, and it has no analogs in the area.
Return on Investment
After completion of construction, the owner can live in the villa and maintain it independently or transfer these functions to a management company. The second method is preferable in terms of payback since, in this case, within three years, the investor will receive a guaranteed income of at least 12% of the investment minus the costs of utilities, renovation, and service. Funds are transferred to the owner by transfer to a bank account or cryptocurrency. Payment in cash is possible if the investor regularly comes to Bali. Guaranteed income is the minimum that a villa can provide. In practice, this figure reaches 22% or more.
It is easy to calculate that the investment payback period will be 3–4 years. There is no need to fear a decline in tourist traffic in Bali – millions of people worldwide were looking forward to the lifting of coronavirus restrictions to visit the island. Bali opened to tourists in early March 2022, and in the first two weeks, over four thousand people arrived here. Indonesian authorities plan to welcome up to 7.5 million tourists in 2023.
Algorithm for purchasing and registering real estate
Most real estate purchase transactions in Bali are concluded remotely; in our company’s practice, 95% of them are. The whole process can take only 3 days:
- Expert assessment of the object and real estate, carried out by a notary. This is necessary so the buyer is confident that there are no risks to concluding the transaction.
- Reservation of an object. This confirms that the property is yours, and other buyers will only be able to purchase this property once all the documents are prepared and the transaction process is underway.
- Conclusion of the MOU contract. An agreement is signed, which outlines the parties’ responsibilities, details of the transfer of the object, and payment. If the developer is engaged in further property management, then it is necessary to sign another agreement – for management.
- The first payment is 30% of the cost of the property.
- Conclusion of the Leasehold contract. This process begins after full payment for the property and completion of construction if the property was unfinished at the time of purchase. The document confirms the owner (tenant) of the property.
For help with registration, it is better to turn to real professionals Indonesia-real.Estate.
Summary
The island of Bali is attractive because of its nature, climate, and atmosphere. People come here both for recreation and for remote work, so housing here is in demand 365 days a year. At the same time, the real estate market is limited due to the specifics of the territory and legislation, which means that new and high-quality properties are in plentiful short supply. Therefore, if you are considering purchasing a home in Bali, now is the time.
