Bali villa management: what property buyers should know
Balinsky spoke with a manager who rents out villas in Bali. Below are the key points for anyone thinking about buying.
The expert — a villa manager. He says his team has been renting out villas for 10 years. They manage villas in BaliWood Residence (a project by developer BREIG) as well as properties of other owners.
The figures below come from the manager. Balinsky has not verified them.
1. Renting it out yourself is harder than it looks
In the first BaliWood Residence, the owners of two villas left the management. They tried renting on their own or through another agency. After a year to a year and a half they came back and asked to be taken on again.
Owners are not held by force: they can leave.
2. The developer is responsible for 1–2 years, the management company for 28
According to the manager, a developer shows results in the first year or two. For the next 28 years it is the management company that decides whether the investment worked out:
- repairs and maintenance — how often things need fixing;
- daily cleaning;
- guest service.
Many new projects are being completed now. Someone has to manage them. And a management company cannot be grown quickly: it means hiring and training people.
3. Many developers have given up their own management companies
Doing it well is a big job. The manager knows several developers who handed management over to other developers or to separate management companies.
But not all of those cope either — even the big ones. From the outside two companies can look the same. You need to look at the specific case.
4. A beautiful villa won't save a bad location
His team takes on far from every villa.
- An owner says "my villa is in Canggu", but in fact it is well beyond Canggu, for example in Tumbak Bayuh. A great villa, but no demand.
- It gets rented monthly for little money. Then the tenant leaves, and finding the next one can take two months.
- They don't take: in Canggu — villas far from the ocean; on the Bukit — villas without a view, for example in Ungasan.
5. A 4.5 vs 4.8 rating is money
The higher the Airbnb rating, the higher both occupancy and the nightly rate. According to the manager, the link is direct.
Guests use filters: 4.8 and above, or at least 4.6. With a low rating you can't set a high nightly rate — the villa simply won't be seen.
6. Checks on Airbnb villas
Bali has started checking villas that are rented out through Airbnb. Some have left daily rentals.
- His team's villas are near the ocean, in the pink zone, with a Pondok Wisata or PBG permit. All of them passed the checks.
- By his statistics, there are 2% fewer villas on Airbnb in Canggu than a year ago. Tourist numbers, as far as he can tell, grew slightly. Competition for them has dropped.
7. Red or pink zone — almost no difference
What matters is not the colour of the zone but the permit you end up with.
- Pink is tourism, red is commercial.
- In the red zone you have to build to the standards of a tourist property. Then you get the same licence.
- A shop is possible in the pink zone too.
- Every plot has its own list of what can and cannot be built. On two similar plots he saw a difference: a fitness centre was allowed on one and not on the other. The same happens with medical clinics.
- Restaurants, shops and hotels are usually allowed everywhere.
The manager's conclusion is simple: in pink and red zones you can build almost anything. But the specific plot has to be checked.
What this means
Before buying, look not only at the developer but also at who will manage the villa in the years that follow.
The full interview (in Russian) is available via the video button below.
