Is Bali Property a Good Investment in 2026? Honest Pros, Cons and Risks
AB
Andrei Balinsky
Founder of Balinsky
Short answer: it can be — but only if you buy the right structure, in the right area, from the right developer, and model the return on real occupancy instead of a brochure. Demand on Bali is at a record high. The weak points are elsewhere: leasehold terms that run down, uneven developers, zoning, and management costs that quietly eat a third of the revenue. Here is the full picture, with the numbers.
Why people buy on Bali: the case for
— Demand is real and still growing. According to Statistics Indonesia (BPS), Bali received 6,948,754 foreign visitors in 2025 — a record, up 9.7% on 2024 and above the pre-COVID 2019 level. Tourism has not just recovered, it has moved past its old peak.
— The entry ticket is low for a beach destination. In the Balinsky catalogue (June 2026 snapshot) the median villa is about $405,000 in Canggu, $375,000 on the Bukit peninsula (Uluwatu, Pandawa, Bingin), $255,000 in Ubud and $185,000 in Tabanan. A studio or one-bedroom apartment in a complex typically costs $120–160k. Compare that with beachfront prices in Phuket, Dubai or southern Europe.
— Prices are quoted in US dollars. For buyers holding dollars, euros or pounds this removes one layer of currency risk on the purchase itself (though not on local costs — see the article on rupiah vs dollar currency risk).
— There are legal routes for foreigners. You cannot hold freehold land, but leasehold, Hak Pakai (with a residence permit) and a foreign-owned company (PT PMA) are all lawful and widely used. In 2025 the paid-up capital required for a PT PMA was cut to IDR 2.5 billion, which made the company route far more accessible.
— A diversified tourist base. Australia is the largest market (about 1.54 million visitors in 2024), followed by India, China, the UK and South Korea. No single country dominates the way Russia once did in Phuket.
The case against: what can go wrong
— You are buying time, not land. Most villas are sold as leasehold — a lease of 25–30 years. Every year that passes, the remaining term and the resale value shrink. A return that looks like 10% a year has to pay back the purchase price before the lease ends, and that "burn-down" is often left out of developer spreadsheets. We break it down in Bali leasehold extension: how it works.
— Occupancy is lower than marketing suggests. BPS reports star-hotel occupancy on Bali of roughly 57–65%, falling to about 57% in the low months; non-star accommodation sits far lower. The average foreign stay is about three nights, which means more turnover, more cleaning and higher operating costs.
— Some areas are oversupplied. Canggu alone was expected to add around 1,600 new apartments by 2025. In a crowded area, the new villa next door competes for the same guests, and nightly rates stop rising.
— Developer risk is the biggest single risk. Off-plan projects are sold on the promise of a discount, yet some are delayed, downgraded or never finished, and payments are often made years before you receive anything. In our catalogue, new off-plan villas actually list about 23% higher per square metre than completed villas on sale — see is off-plan cheaper in Bali.
— Zoning and permits. A villa built on land zoned for agriculture, or without a building permit (PBG) and a certificate of functional feasibility (SLF), can be impossible to license for rental — or even at risk of demolition. Zoning under Bali's spatial plans (RDTR) is being actively reviewed in several areas.
— Management takes a large share. A typical villa management company charges 15–25% of gross revenue, booking platforms take their own commission, and running costs (pool, garden, electricity, cleaning, repairs) add another 5–8% of revenue. Then comes rental income tax. Gross yield and net yield are very different numbers — see how villa management fees work.
— Resale is slower than buying. There is no MLS and no mortgage market for foreign buyers, so the pool of buyers for a used leasehold villa is smaller than the pool of sellers of new ones.
— Rules change. In 2025–2026 Bali introduced new tenant-registration rules for rentals, increased enforcement against unlicensed rentals and discussed tougher penalties for nominee schemes. None of this hurts a properly structured investor — but it hurts the shortcuts.
What a realistic return looks like
The headline "guaranteed 12–15%" is almost always gross revenue in a good month, before costs. A realistic model:
— occupancy of 55–70% across the year, not 90%;
— minus 15–25% management fee;
— minus 5–8% running costs;
— minus rental income tax (a 10% final tax on gross rent for residents; non-residents are usually withheld at 20%, reducible under a tax treaty);
— minus the leasehold amortisation: purchase price divided by the years left on the lease.
What remains is your real, comparable-to-a-bond number. Our own calculation from 359 villa prices and 6,305 rental listings puts the median two-bedroom villa at about 10% gross and about 5% net at 65% occupancy, and one-bedroom villas at about 14% gross and 7% net — see Bali villa rental yield by area. The spread between a well-run and a badly-run villa in the same street is bigger than the spread between areas. Always ask for 12 months of real occupancy reports from a completed project by the same operator.
Who Bali property suits — and who it doesn't
It suits you if:
— you have a horizon of 7–10 years or more, or you plan to use the villa yourself part of the year;
— you are prepared to check the land, the permits and the developer before paying;
— you accept that this is a business with operating risk, not a savings account.
It does not suit you if:
— you need the money back in 2–3 years;
— the purchase only works with the "guaranteed" return in the brochure;
— you are being offered freehold in an Indonesian friend's name (a nominee arrangement — void under Indonesian law and a way to lose everything).
A five-point test before you commit
- Is the land zoned for housing or tourism accommodation, and does the project have a PBG (building permit)?
- How many years are left on the land lease — and does the developer's own lease outlast yours?
- Has the developer completed at least three projects, on time? Use our 12-point developer checklist.
- Does the return still work at 55% occupancy after all costs and taxes?
- Who manages the villa, and can you change the manager without penalty?
If all five answers are good, Bali can be a solid investment. If any of them is "I don't know", find out before you pay the deposit.
Browse current listings with prices and permits: villas for sale in Bali and apartments for sale in Bali. For the step-by-step legal process, see our guide to buying property in Bali.
Sources: BPS Bali — foreign tourist arrivals 1969–2025 and tourism statistics (hotel occupancy, length of stay), 2024–2026; Ministry of Investment Regulation No. 5/2025; Balinsky catalogue data, June 2026.
Current numbers
Prices and rents by area are recalculated monthly: Bali property prices by area, how much is rent in Bali. How we calculate: methodology.