Many people buy property in Bali to ensure a stable rental income as the local market currently provides one of the highest rental incomes in the world. In Bali, you can get a ROI of 12-15%, while popular Thailand brings only 7-8% of income and the ROI for property in Dubai, another popular investment destination, is 6-7%.
The reasons for high ROIs for the local housing include the following factors:
- 320 sunny days a year provide the occupancy rate for local rentals of more than 80%;
- the rent rates are growing steadily, by 15-17% per year;
- relatively affordable prices that lead to the increase in the flow of tourists.
The value of land and real estate is steadily rising. There are no signs of a "bubble" yet. Growth in demand is the result of a shortage of supply as the development of most of the popular resort have been completed.
There are two options for renting out property. You can obtain a commercial license and find tenants on your own, but this requires a permanent presence in the country. A more popular option is to rent out your property remotely through a management company. Realtors will take care of all the management of the premises for a fee. As a rule, property management services cost 15-20% of the rental income.
Often, real estate agencies work on a guaranteed contract basis in the amount of 10-12% per annum. This is an option for those clients who prefer stability and predictability. The final rental rates depend on the location of the property, type of property, area and its amenities.