Should I invest in Bali? The numbers behind my decision to build a Bali Villa
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- Опубліковано 12 вер 2024
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One of the most common questions I get about our decision to invest in Bali is how much does it cost and is investing in Bali a good idea? Now I can't tell you how to invest your money but what I can do is break down the numbers behind my decision to build a bali villa and the figures might surprise you. In this video I'll be going through all the research I did as well as the spreadsheet I made to give myself a realistic estimate on how much I will earn investing in a Bali villa.
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Hey mate, just came across your video. My partner & I (Both based in Australia) are pretty much on the exact same journey lol. We decided to purchase a more airbnb focused villa in Canguu initially with a view to building a villa more suitable for us to retire in in the coming years. I've done similar research and your figures stack up 👍. Best of luck moving forward.
That's awesome mate. Good luck with it all!
Hello will, I am not used to send comments but your video is bringing me top informations I never found elsewhere. Thanks and all my best for your channel. Tiego
Thanks for watching!
Love your analysis and sensible long term financial planning! Well done!
You forgot to calculate the high rental taxes in Indonesia, and also, the price increase is a very hypothetical figure, since over time the number of years until the end of the lease decreases. Based on this, the price should fall over time. Also, you need to add annual insurance for the villa as an expense. You also need to add the cost of repairing the villa, which can amount to 1-2% per year of the property’s value.
All fair points! As I’ve mentioned in earlier comments tax is going to vary wildly depending on how you set up the villa and where you are from but for us the tax rates are incredibly low.
Research tells us that villas tend to increase in value until there is 20 years left on the lease at which point they begin to decline. Now that the villa is finished we’ve already been offered 400k usd to my numbers in this video were conservative on that too.
Insurance will vary depending on your villa but it’s about $20-30 a month so pretty negligible. And again maintenance is going to vary greatly. 1-2% would be about right for a villa few years old but a new villa will be much lower.
Good Video , Wondering if you could make a video on tax costs ? How it works. Did you use Australian lawyers and accountants. And did the developer recommend land to buy and location ? Thanks
Good question. Also understanding the ability if any to borrow as a foreigner on both leased land and freehold through a PT PMA would be great!
Awesome vid Rory. Thank you! Hope the villa build is going well!
Awesome video and great insights on why you should invest in Bali!
Thanks guys!
Good video, maybe you could share the "NOT TO DO" while building the villa and Challenges in the process.
that's a great idea! We've been super lucky to be honest, we've had very few challenges so far and have had a dream run with the villa build. We definitely paid more for that pleasure but it's been great.
Awesome video ✅🦾
Thank you!!
Hope it all goes well brother!! god bless
Thank you!
Cool video. Doing similar now in Tana Lot with my Indonesian wife 4 bed with swimming pool. Half built roof going on now. Mainly for us but might rent so we can travel more around the islands. Already have had property agents enquiring to rent five years to sublet.☹️
That's awesome! Having people enquiring is a good problem to have!
🙌 we did this in Pererenan, profit was instantaneous so we’re doing it again in Cemagi, definitely recommend 👍
That's awesome mate! So glad to hear that it's working well for you! We just got our projections back from the management company we are using and they are expecting our profits to be higher than what I anticipated so I'm excited for that!
Hey mate- absolutely love the channel! Just wondering if you need to have the cash to pay for the land/villa in full or if you managed to get a loan for the process. Love your work!
Hey Mate, You can't get a loan within indonesia to finance a villa/land. So you'll either need cash in the bank or be able to borrow from your bank to fund the bali villa. I definitely don't have that kind of money sitting around. We were lucky that we bought our house when prices were cheap and we have a lot of equity in it now so we went down that path of releasing equity in the house to fund the bali villa which will obviously pay itself back pretty quickly.
@@RoryandCasey hey mate! How did you go with getting funds using Aussie equity for an Indo build?
Loved this video and it’s got me buzzing to look into this, it’d be an absolute dream!😂
Amazing video, thank you !
Glad you enjoyed it!
Hi Mate. Great video. What’s the paperwork that needs to be done? Do I need to start a company in Indonesia and what licenses do I need or are the licenses organized by the property management team?
Short answer is lots. Get a local legal company to help you out with that side of things. The rules change regularly and you want to make sure that whenever you start you're doing everything above board at the time you're doing it.
Awesome video mate! Did you get a loan to build the villa or did you pay for it outright?
Did you have to get a mortgage in bali? Or were you able to buy with your own personal funds. Its something im looking at doing in the next few years. Great video mate 👍
We used equity in our house in Australia for most of our funding. Unfortunately it's not possible to get a loan in Indonesia.
Thank you for all the information! When do you did the leasehold did you establish a business PMA or not and if not any recommendation on how you do your taxes for room rent etc.
I didn’t quite catch the name of the website-app you use to the the Airbnb data
It's called airdna 😊
Hiii Rory thank you for the video awesome but I wondering do you have any good recommendations for property management in Bali?
thanks for your time & effort mate.
The calculation is great but was it necessary before investing in Bali knowing that the ROI will be at least double from what you get in Australia or somewhere would be enough of a reason to invest
I think it’s important to have all the information you can get before investing anywhere!
I would love to know what consultant or lawyer you’re using as I’ve done hours and hours of research on this topic and to do this legally I have found you have 2 options.
1. Use a local Indonesian as a nominee, under Indonesian law they would have sole ownership of the property and could technically claim it as their own at any point.
2. Set up a PT PMA and get a rental license through that, a PT PMA requires paid up capital of 2.5billion ($250,000aud) with an investment plan of 10billion to be projected over a number of years.
If you could point me in the direction of your consultant it would be amazing.
Hey mate!
Yeah it's a minefield of information.
If you want freehold your only legal option is to set up a PT PMA. If you're leasing the land then you can do that just as a foreigner on any type of visa.
When it comes to renting out the property again it's a minefield. You can get a PT PMA or you can do it through a management company so it's all running through their business (which is what we are doing). Then whether you need a pondok wisata or not is also information both ways so we are getting one to be ultra safe.
Avoid the nominee arangement at all costs. It's not legal and there are horror stories of people losing their property.
If you want to chat more mate send the villa Instagram a message @villa.raava.bali happy to help out where I can!
Thank you for this. Subscribed! Question: What's the usually percentage down to buy a villa?
You need to pay the entire amount. There's no capability to borrow money within Indonesia for foreigners buying villas unfortunately.
Great video. How long does the process take from start to fibush
Our process is going to take almost exactly a year. I’ve heard of people taking 18+ months though. Best to find somewhere with a fixed price fixed time contract. Still expect it to run over but at least there will be penalties if they do run over
@@RoryandCasey perfect thank you mate
Amazing video, super helpful also to see your calculation! I already found a land in uluwatu and am now looking for a good developer. If you have any suggestions of who you are trusting i would much appreciate it. Really great content and hope everything with your villa is going great !
I would love to hear an update on your villa
There will be one soon! Currently sitting in the airport about to board a flight to Bali. Update video in the next couple of weeks
Hi Rory. Love to hear about anything you know about paying tax in Bali and whether there is some sort of agreement with Australia around the need to pay tax in Australia if you've already paid tax in Bali.
Hi Rory, thank you for the video we really appreciate your time & effort in sharing about purchasing villas in Bali. We also find that Australia is getting really exapansive to lived and most of the pay goes into tax. I feel it is impossible to retired before 70 with the high living costs and housing price in Aust. Me and my partner really want to have a villa in bali for our retirement. We just want somewhere away from the hustling and bustling. We try to do research about buying land and building in Bali or buying an already built property. But there were still many things we didn't understand and not knowing who we can reach out to for help. May I ask if:
Q1. How do you prepare or do research about buying lands eg: any particular websits you can recommend about looking for lands and locations? Do you find out where you want to buy first then contact the agent and ask them to show you the land when you get to Bali ? I can't afford to go to Bali all the time so I need to make the most out of my trip, any tips on the preparation and research for lands and builders/developers, agents, lawyers etc?
Q2. By any chance that you can share the agents, lawyers, developers that you use? (just want to make some comparison and to understand a bit more).
Q3. Is there any insurance, protection/garantee on the property by the developer/builder after it has completed? For example: garantee there won't be any major structural issues for the first few years and if there is the developer/builder will fix it without extra charge?
Thanks again for your time and producing great videos.
Looks like you are all over it mate . I have a couple of rentals here in Oz returning 6/7% you certainly got me thinking . How did the prices stack up thru all the agents advertising Villas etc they seem to have loaded the sell price a fair bit compared to your numbers
6-7% is still a decent return! If you buy through an online agent there is definitely a higher markup... it's hard to quantify because you can rarely compare like for like but maybe like 10-15% difference? Buying finished villas there is a huge markup. I could flip the villa once it's finished for a 20-30% profit no issues at all without really trying if that's what we wanted to do. We've got long term plans with it though. If you can afford to wait for a villa to be built then I feel like building is still the better way to go, albeit with organisation and potential headaches.
@@RoryandCasey Thanks for your reply , will definitely look into it and follow your progress with interest, keep up the good work 👍
it will be finished in about 4 weeks and we will be there setting it up for about 6 weeks after that so there are updates coming soon
@@RoryandCasey How many times have you actually been over looking after the project
We've been over twice in the last 12 months. The first time was to buy the land and start the whole process. Second time was at christmas to have a break and see how it's all going but there was really nothing we actually did except stand around and look at it all. Our developer has been great at sending updates. Part of the deal for us was that there is a project manager onsite i think 5 or 6 days a week to make sure everything was up to scratch and importantly was there anytime anything structural was getting done like concrete pours etc. We got reports back that included the negatives too such as him noticing the spacing on the rebar wasn't quite right and that it was fixed before the concrete too. If you were organising the build yourself I'd definitely hire someone to be onsite for those parts of the build if your contractor didn't do it themselves.
Thanks for the great video! I’m curious about how cashflow worked on the build. When did have to pay for each part of the project?
It was all in progress payments based on % completion. I think 25/25/25/20/5 from memory
Hi I love your videos about Bali and the general and thorough approach to running it as a business. Just a question. Do you think the website you rely on in terms of getting data from airbnb is a reliable and 100% true source of information ? Have you actually looked at some of those luxurious properties in your area and checked if they indeed have such a high occupancy ratio? I looked at some awesome looking properties in your price range and your area (I selected booking for October and went back to their calendar for June and July) and found almost none of them having 90 percent occupancy rate.
Thanks!
Yeah airdna is incredibly accurate. They are partnered with Airbnb to enable market research for Airbnb properties so the date is from Airbnb themselves.
Most places are sitting close to 100% occupancy at the moment. Ones to look at in the Bingin area are young villas. There are a lot of brand new luxury villas in the area that have opened in the last 6 weeks so their occupancy will be low for a few months until they can begin to get regular bookings. I’m sure ours will be the same initially.
Our management company we are using expects us to be earning more than what I’ve anticipated in my video which is a nice surprise.
That all being said… once the villa is running properly I’ll be making a follow up video clearly explaining whether my expectations match up with real world experience. The best proof will be if it actually works out how I plan.
Also it’s worth noting that people book Airbnb normally 10-40 days out from travel so it’s not unusual to see properties with solid bookings for the next 30 days but then patchy after that.
@@RoryandCasey Awesome. when giving the total price of 200K for the property and land , did you include in this the 20% tax you had to pay at the time of the purchase?
That does include everything but we got land and then built so we only had to pay that tax on the cost of the land not the full 200k (and it’s in USD too)
@@RoryandCasey Great and thanks for your super fast replies.
Great video! Curious what area in Bali did you get your villa built in?
We are in Bingin 😊
HI Rory I saw your villa on airbnb. Looks really stunning. Did you manage to close it within your budget of $200k ? We are about to buy some land in Pereranan.I have a question about the pergola next to the pool with galam wood on top. Did you use clear plastic or glass on top of it?
Hey mate. It’s probably ended up being just over 200k usd by the time we added all the furnishings. I underestimated how much the furnishings would cost a bit (like needing 4 sets of all the linens and extra covers for pillows and cushions in case they get dirty or damaged) which starts to add up quickly.
I’m releasing a walk through video of the villa later this week.
The pergola is covered in a thick laminated glass
@@RoryandCasey Thanks !
But wait... What happened to the percentage Airbnb takes and taxes and Service, OTA, Operation Expenses, SS, did you not use a broker or a management company to handle all the details of working a Villa? Cleaning, maintenance, etc. You didn't take those costs into account. Would you mind explaining why??
It wasnt meant to be an exhaustive list. Taxes will vary depending on your situation and country of origin. Management company fees which include a lot of the operational expenses are included in this formula. Cleaning and maintenance fees once again are going to vary a lot depending on the size of the villa but they aren't very big, less than 5% of revenue. I did mention in the video that I didn't include these things.
@@RoryandCasey Thank you, Rory. Are you currently in Uluwatu? I'd love to consult with you.
I'm not sorry! I'm in Australia at the moment.
@@RoryandCasey I see ! Thank you, Rory! Maybe some time later in the future! But if there's a way to reach out to you and consult, would you please let me know? Thanks, Rory!😀☺
@@mipancito hey mate! I don't do one on one consults. Unfortunately I don't have the time... as you can imagine I get a lot of requests. If you have any specific questions though feel free to send them through to the Villa's instagram page @villa.raava.bali and I'll get back to you when I am able to!
Have you factored in maintenance and depreciation? Your beautiful fittings will need replacement. It will need new paint every few years. What is the rental increase agreement after 30 years?
I have done. This is obviously a simplified equation that doesn’t take every factor into account. Maintenance is somewhat built into my calculations but obviously major maintenance work will need to be done. Our personal plan is to be living in it in 5-6 years which is when the maintenance will probably start needing to be done.
The rental increase after 30 years is stipulated as another 30 years at the current market rate for land in the area as calculated from 3 different comparable properties at the time. This is the standard method in Indonesia. You could ask to have the property price tied to the price of gold so whatever % gold goes up by in that time the lease goes up. Of course if you want to renew before 30 years you can negotiate a rate with the land owner.
Hi, would you be able to share the process of finding a land? Do you have any contacts you can share
I’ve gone through the process of finding land and all my contacts and vendors in the Villa Guide available in the video description 😊
Georgia is amazing to park your money!!
Georgia the country? I had no idea! Its on my list of places I'd.love to visit one day.
You really don't know what you're talking about if you said it doesn't matter if you only have 60 years. That simply means you have a depreciating asset versus an appreciating asset. Means your return of invested capital needs to be VERy high, which its not
What about the competition in Bali? everyone is building and renting out airbnb in Bali right now , competition is extreme! this method might be good for now, but like all markets, they are all dictated by supply and demand, once supply catches up with demand I see the Bali market popping, I think it’s extremely lucrative and it is good while it lasts, but nothing lasts forever in real estate , especially hot lucrative markets like Bali, anyway good luck with it mate
I don’t disagree with anything you’ve said there! It’s absolutely a risk in any hot market like Bali. There are things going in the villas favour though. Bali performed major upgrades to their airport as well as working on road infrastructure to increase both international and domestic tourist numbers over the next 5-10 years and their targets are very ambitious. Plus the current supply doesn’t even come close to meeting demand and it’s getting tighter every month. Of course it won’t always be this good but it’s got a very very long way to go before the return drops down close to the 8-10% yield you’d get from safer investments.
But like anything with investing… who really knows?!
@@RoryandCasey I think you did the right thing by buying up in bingin, however I don’t think I could say the same thing about Canggu, obviously you would know the numbers more then I would, I’m just going by what I see, the traffic situation is horrendous and I can’t see anything happening with that anytime soon. My missus is indo and iv been looking into Bali for a few years now, but the competition has always scared me away. however to be honest the Bali market keeps on proving me wrong, anyway I think binging and uangasas definitely a safer bet
Yeah 100% we saw Bingin as the next boom area and it seems to be happening. Weird thing about Canggu though is even though it’s crazy busy the prices are still mental for rentals there. I personally wouldn’t want to be anywhere near Canggu anymore.
@@RoryandCasey iv always liked the Bukit area for investment, it’s so peaceful up there, an cheaper then Canggu, also comes without the traffic and craziness that’s plagued Canggu recently, and you’re right I only see canngu getting worse. If I do consider making the bet, it will definitely be out towards kedungu and out tanalot way. I know leasehold is cheaper option but having an indo wife it makes sense to be looking into freehold, that way I can always on sell to another Indonesian investor
Another advantage of freehold is you can sell it on a 25 year lease to a foreigner too so you have all the options available.
how is your forcast going after 1 year ?
We aren't quite at a year just yet. We'll hit the year being open in September. So far it's been good. A few more challenges financially than we initially expected but we're sitting around 18-20% Roi through the low season months. High season is still to come over the next few months at which point we'll have a much better overall picture of how we are going.
Thanks Roy
Interesting analysis, but you've glossed over a couple of key issues, namely commercial villa licensing and Indonesian income tax. All revenue earned in Indonesia from commercial activity (like short term villa rental) is subject to both national and local income taxes (both at district and village levels). Also, getting a proper license to operate a villa for rent is not possible for you as a non-resident foreigner, so you would be operating illegally. Many do this, but you should factor in the significant downside into your P&L in the event you are caught, fined and stopped from renting. Don't listen to the property management company if they tell you otherwise - they will say anything to get your contract. Sorry to be a downer, but you sound like a guy who wants to be prepared.. My advice would be to sell upon completion, which you can likely do at a tidy profit.
Hey mate appreciate the input! Taxes are something that I left out intentionally as it’s going to vary a lot depending on both your home country and the district you are in. I didn’t specify that in the video sorry about that!
When it comes to permits… my local lawyers who are far smarter than I am in this regard are in the process of getting the pondok wisata for me to allow for daily rental. I’m doing everything totally legally and above board and have an independent lawyer also auditing the whole process to make sure of that but thanks for the advice and the concern!
@@RoryandCasey Great, and best of luck!
Thanks mate and thanks for the advice! There’s definitely people doing the wrong thing here and it’s not good for anyone.
Hi, lovely video with lot of useful info. Love your channel. Just wondering whether it is really okay not to be present during the construction? I was watching some other videos where most of them suggested to visit the construction site regularly. How do you manage to monitor the construction? Also did you make any kinda legal agreement with the constructor that they would have to pay you back if the project is delayed? Appreciate your reply and once again love your work. (Also you give me happy Zach Galifianakis vibe, thanks for that as well :))
Hey thanks for watching! Haha I've literally been stopped for photos more than once because of the Galifianakis vibes. In answer to your questions.... You can hire someone to oversee the project which would normally cost you about 5-10% of the total build cost depending on how often they are on site. Our Architect and developer though has their own person they have overseeing the builders and we get regular reports of both the good and the bad and they are on site anytime something important like concrete being mixed and poured happens. We have spent a bit more on our developer because they have a good reputation and are known for building high quality villas. If we were sourcing our own contractors to build then I'd definitely spend the money on having a building supervisor on site.
Our legal agreement is actually with the developer and they put a clause in the contract about sticking to a set date without me having to ask. Off the top of my head I can't remember the fee but if they run over I think it's a few hundred dollars per week until it's finished. That being said there is a get out clause in there for things like extreme weather, earthquakes, covid coming back which is pretty fair. If they have a bad wet season of a massive quake destroys everything on the island then there are of course going to be delays. As it stands at the moment they are about 3 weeks ahead of schedule and they estimate that we'll get the keys about 3 weeks before the contracted date which would put the total build at 39 weeks. Obviously it's still 6 months away so a lot can change in that time
@@RoryandCasey Thanks a lot, lot and a whole lot more for being so thorough in your explanation 🙏🙏🙏. It really helped to clarify certain doubts I had. I am currently living in Singapore for work, and I am also thinking to invest in Bali (credit goes to your videos). I am also looking for a land now in the similar area and thinking to visit Bali this Feb but I won't be able to stay there for long. Can you tell me roughly how much time it takes to complete the entire process from viewing to finish the signing process. I think you mentioned in one of your previous videos that it took 4 weeks for you. So just wanted to confirm whether it includes everything. Thanks again and eagerly waiting for your next video.
@@pritamdey8108 No worries at all! The process can definitely vary depending on how long it takes to find a good plot of land. For us we actually contacted agents and lined up lots of land to view when we landed in bali so we weren't trying to find land then. We spent about 5 days looking at different plots of land before making the decision but we pretty much knew the moment we saw this land that it was the one, we just wanted to make sure that we covered all bases. Once we found the land we met with the family and came to an agreement which only took a few hours. Then we gave all the information to the Notary and they took about 7 days to do the due diligence on the land and write up the contracts. On that final day we all went to the notary office and signed the paperwork together and technically from that moment the land was ours. The notary still needed to make the paperwork official which took another few days and then I picked up a hard copy from them the following week. Realistically you could do the whole process within 2 weeks if you found good land quickly. Plenty of people do it without being in the country but you have to sign a power of attorney document for someone locally to act on your behalf which I didn't feel very comfortable doing.
good formula. but my question is , 1. is 200k enough to build a luxury top notch villa to achieve 250 dollars a night rent ? 2. achieving 90% occupancy in the 1st year is almost impossible. let alone 60%. unless the villa is already have its market. like a pre-made villa with avg of 90% occupancy already in the past years
Good questions! It was absolutely doable for us. The villa has been on the market now for a couple of months and we're achieving over the 250 mark per night. Were also close to 100% occupancy and its low season. It's definitely achievable if you build the right villa in the right location.
Whether you can still keep to that $ amount or not today I'm not sure. Land has definitely gone up and I have to assume that construction costs have increased over the last 12 months as well.
that is very good numbers. i'll try to stay in your villa someday . maybe on low season so i get lower price hehe. how big is the land size and whats the name of the villa again ? thank u guys@@RoryandCasey
@@RoryandCasey Hi Rory, my friends and I have bought a freehold land in Medewi beach and now building a small boutique hotel. Great to know that your villa is now up and running with almost 100% occupancy! Land price is insane in Bali. We bought a land in Aug and land price has gone up 30% already! Please let me know your villa name, I will def stay in your villa soon
@@aldomonty5550 yeah it's definitely a bit cheaper everywhere in low season! It's called Villa Raava! You can check it out on google maps and airbnb :)
@@jinheekim5535 Congratulations that's awesome! What will it be called? We might come and stay one day! We want to see more of the western side of bali.
you should rerun numbers off lower occupancy rates. eg 75%
I’ve run them as low as 50% but realistically at the moment occupancy rates for villas like this in the area we’ve built is close to 100%. That may change in the future but for now 80-90% is conservative
What kind of visa do you need or currently have that allows you buy properties and rent it out for profit?
Obviously get your own legal advice on this but the advice I was given is; to obtain land or a villa on a leasehold you don't need any kind of visa at all. Plenty of people do it without even being in Bali and do it all remotely. If you want to get freehold then you'll need to set up a PT PMA in which case you would need a KITAS visa to set it up. Once the villa is done you may or may not need a PT PMA depending on how you structure the rental business.
@@RoryandCasey what type of visa would you need that allows you to stay long term and manage your rental property? Thanks for any info
@@user-ix8bm6md6i I believe it would be a Kitas but a local lawyer would have a better idea.
Hi enjoyed your video thanks. is the costs of the yearly rental included in your costs?
The lease cost of the land is included as part of the total purchase price of the villa as it needs to be paid entirely upfront.
I have a really good idea to invest in bali just buy electric scooter and open a rent shop (in the name of renewable energy) so many people will use them and electricity is also cheaper than gas
Btw i want my cut 😂jk
Sorry for bad English
Hello,
Any recommendation for the construction services ? Land + Villa ?
Bali Creative Development in Canggu have been amazing for us. Ask to speak to Patrik and let him know we sent you his way!
@@RoryandCasey hei . Very good video! Thank you ! Tried to look up the construction services and
Looks like they are permanently closed. Do you know why ?
I’m not sure why google says that. They certainly aren’t closed. I’ve noticed sometimes businesses in Bali come up showing permanently closed on google when they aren’t. I’m not sure why but they are definitely still up and running!
How many square meter of land did you purchase?
Hi, I have partner in Bali, and I am from Canada. We would like to invest in a vila , as a foreigner, what's the best option for me?
We want to buy out the property paid in full.
I know that foreigners can't own property
Good video, very informative.....don't you require a business visa to be able to earn an income from rentals in Bali?
Thanks for watching! You don't need a business visa to earn rental income but you will pay a slightly higher tax if you are doing it via a tourist visa.
How do you pay tax on income without a tax number ? I thought you could only get a tax number if you have a kitas? And do you not require a pondok wisata license to rent your place only available to indonesians? Very interesting good luck
I’m not 100% sure on the entire tax system yet. My lawyer and accountant team have sorted the tax side of things and the process of pondok wisata has already begun. Everything is being done above board and all taxes will be completely paid. These things at the moment are over my head but once they are all sorted I’ll make another video explaining them all in detail 😊
Thanks for the reply I think it scares me off a little but people are clearly making good money so good luck to them. My understanding is you cannot share a pondom wisata ie from an agent and cannot own your own as I'm guessing neither you or your partner is indonesian but people clearly are able to find ways around this. Tax can only be paid with a tax number but again people must have found a way around this too, will definitely be keen to see your progress I'm certainly not claiming to be an expert I hope I don't come across that way.
It’s all good mate I totally understand! Part of why I made these videos is the fact there is so much conflicting information out there. Before we started the process I did literally hundreds of hours of research, meetings with lawyers etc in the lead up. I’m certainly not an expert either but I think I definitely know more than the average investor at this point.
The tax number thing is interesting. I’ve already had to pay taxes and have receipts for those taxes but my accountant has done all that so I’m not 100% sure whether they were done with my own tax number or otherwise. I do know that on a tourist visa you do pay a higher tax rate than on a kitas so I’d suggest that has something to do with it. Australia has a tax treaty anyway so even with the higher tax rate by the time the Aus government dips in i walk away with identical profit. Just Indo get more money than they normally would which I’d prefer anyway.
The pondok wisata once again I’m not 100% sure what they are doing there. I’ve asked my lawyer to sort it they said no worries. I guess I’ll find out when it’s in my hands whose name it’s in. It can take several months to come through but I’m told I can rent the villa provided the process has been started.
I’ll definitely make update videos along the way and if I’ve made any mistakes or new information comes to light I’ll absolutely add it to the new videos 😊
How do I connect with you for business ? I’d like to create an investment product out of this to serve a specific market and demographic
How do you see the overal costs of building nearing the end of the project? I wounder if it still fit the original 200k budget you targeted?
The actual building costs were fixed so we didn’t have to pay any extra beyond what we started with for that. We did decide later in the process to add a jacuzzi section into the pool which has added about 3k to the costs.
The setup costs for furnishing and decorations etc are ongoing at the moment. I’m trying to stick to our budget but there’s probably a bit more to it than I anticipated but given the cost of things it shouldn’t blow out much. I’ll do a full detailed breakdown once I know exactly the final costs in a few weeks time.
Would love to see the video for your final costs? :)) @@RoryandCasey
Brother where in AU are you located I would love to connect :)!
Hey! We are based down in sunny Tassie 😂
@@RoryandCasey That's a bit far from Brisbane. How do I connect with you digitally ?
@@Itsyourboynelly haha it's a fair hike. If you have questions about investing in Bali best way to contact me is via the villa's instagram page @villa.raava.bali I'm fairly busy but when I get a chance I'll always reply.
Hey bro nice video, do you have a good contact person for me who can do property management in Bali for me?
We are using Bukit Vista. So far they have been amazing!
Why would anybody buy a leasehold property!🤦🏼♂️
what is the indonesian tax on short term rentals?
It’s a sliding scale based on income but generally you need to withhold 10% VAT and around 15-30% income tax. Luckily Australia has a tax treaty so any money in taxed in Indonesia I’m not double taxed back home so it works out to be exactly what I’d pay in tax in Australia.
Hey,
What kid of licences did you acquire to rent out the villa?
You need to have a PBG/SLF and a pondok wisata. All of which are relatively straightforward to get
@@RoryandCasey thanks for your answer. Did you went as a private individual or have you established company first?
@arthurchestnovsky5164 we started as private individuals but it became apparent to us during the process we needed a pt PMA so we organised that during the build.
Oh, that's interesting. So, in any given case, you must have both, right? Legal entity and rental licence?
@arthurchestnovsky5164 for my understanding yes that’s correct. But I would always say with anything legal to seek independent advice. I have an above average understanding of it but I’m also not an expert like the lawyers.
There should be something called “tax” too in these calculations but who knows 😅
Yep I’ve left it out because tax is going to vary depending on where you come from and how much you earn.
Too much optimistic sir,
Whoever does business always uses most conservative approach
I.e. property taxes, property maintenance and occupancy rate is too high,
And you have to stay in Bali atleast 4-6 months annually to run such a fancy business model it's just an idea, not even proof of concept stage, too early too soon
I have taken a relatively conservative approach to my numbers based on current numbers coming out of Bali. The figures that I am getting from my management company even with worst case projections are better than my best case scenarios. Time will tell! Maybe I'm wrong, I hope that I'm not. I haven't gone into this without my eyes wide open though. For what it's worth... you don't need to be in country at all to run a villa this way. That's the idea behind the management company and why they take 20%. Plenty of people are doing this from their homes in other countries.
Either way though, I'll follow the video up after it's been on the market for 6 months with a video with real numbers and I'll compare it back to these expected numbers. If I'm wrong here I'll gladly admit that I was wrong but I have a strong suspicion I'll be wrong because I estimated too low.
I still dont see how building vs rent is a good idea. You have to pay cash. The property basically depreciates at a rate of 60 years after which it could be considered entirely worthless since you no longer own the rights. You may not care about passing down an inheritance to your children but this doesnt seem like a sound investment. If youre going to throw away money for something you dont own in the end, may as well rent instead which could be significantly cheaper? Then park the capital you would have used to invest in a high yield savings account or something to offset the cost of renting.
I get what you are saying but you have to change the way you think. You aren’t investing in property. You are investing in a business. Like all business they rent their shopfront and then earn an income. The income far outweighs the depreciation of the shopfront. Same applies here (except that the appreciation of land over here means that the villa still appreciates in value for a while before it starts to depreciate)
First little while on Airbnb and it’s no longer high season and we are earning between 25-30% roi. Once 6 months is up and we have a bigger sample size I’ll make a follow up video but for the moment at least my numbers are adding up.
@RoryandCasey a business has the capability to increase revenue and valuation. This doesnt. This is almost like parking your money in a 30 year bond at the end of which, you dont get back your initial investment. Makes zero sense. Especially when you compare alternative investments (which you should always do). You can buy a similar priced property in Spain, have 100% ownership of land + building and rent on airbnb for $200+ a night.
Btw the occupancy rates that Bali developers quote are best case scenario. Probably more like 10 years to get back initial investment.. then after that youre stuck with a villa that may be hard to sell since there is oversupply. Hard to say what itll be worth in that time.
If your goal is just to have a property in bali you can stay at when visiting, that will take away from the income you could have had when renting it out. In the end not really saving anything. I dont see where the profit is in all this. I've done my research too
I can tell you from real world experience. Occupancy and return is very very good at least for the moment. But it’s like anything. Only you can decide the level of risk you want to take on. I’ve been offered almost double what we have paid for an outright sale the moment the villa was complete. If the current rates and occupancy that we are already earning keep up we will have earned our money back within 3 years.
great video, can you provide link to that. excel template for ROI calculation ?
Thanks! I made it myself. I’ll look at uploading a blank version you can fill in yourself this week.
@@RoryandCasey Greetings from the netherlands, have you already uploud this excel?
Whoops I totally forgot! It’s in there now 😊
@@RoryandCasey Another question do you advise to buy property using leasehold or freehold
There is a lot more information you need to know with freehold. To do it safely and legally you'll need to set a company up in your name and buy it in that companies name. Some people will tell you they can be a nominee but that is risky and illegal. Personally I went for leasehold. I can still sell that leasehold whenever I want.
As a foreigner If I have 100k USD cash. Can a bank help me finance a construction 🏗️
An Indonesian bank won't look at you as a foreigner unfortunately unless you have an established profitable business