Bali's short-term rental market has witnessed significant growth in recent years, driven by the island's popularity among tourists and digital nomads. Estimates suggest that the market is valued at over $1 billion annually, with thousands of properties listed on platforms like Airbnb and Booking.com. This growth is a testament to Bali's appeal as a tropical paradise offering diverse experiences for all kinds of travellers.
Overview of Visitor Numbers to Bali
Over the past three years, Bali has seen fluctuating visitor numbers due to global events. In 2021, Bali recorded approximately 1.1 million visitors, a significant drop from pre-pandemic levels of around 6.3 million in 2019. However, 2022 saw a rebound with about 3.7 million tourists as travel restrictions eased. This trend continued in 2023, with the island welcoming around 4.5 million visitors.
Forecast for Visitor Numbers
Looking ahead, Bali is expected to see a steady increase in visitor numbers. Forecasts suggest the island could attract 5.5 million tourists in 2024, rising to 6.5 million in 2025, and potentially reaching 7.5 million by 2026. This optimistic outlook is driven by the global recovery in travel and Bali's continued appeal as a premier holiday destination.
Types of Properties Rented Short Term in Bali
The short-term rental market in Bali offers a wide range of properties, from budget-friendly homestays to luxurious villas. Popular options include:
Villas: Often equipped with private pools and modern amenities.
Apartments: Suitable for solo travelers and couples.
Beachfront Bungalows: Offering direct access to the beach.
Traditional Balinese Houses: For an authentic cultural experience.
Booming demand and Average Revenue in Major Areas
The demand for short-term rentals in Bali is robust, particularly in popular areas like Kuta, Seminyak, Legian, Canggu, and Ubud. The average revenue for entire properties varies by location:
Kuta: $150 per night
Seminyak: $200 per night
Legian: $180 per night
Canggu: $220 per night
Ubud: $170 per night
These figures reflect high occupancy rates and premium pricing during peak seasons.
Leasehold Property in Bali
Leasehold property is a common arrangement in Bali, where foreigners can lease land or property for a specific period, typically 25 years however foreigners can lease for shorter periods of time from 1-5 years. This provides a viable option for those looking to invest in Bali without owning the land outright and minimises the amount of investment outlay. The majority of these arrangement involve paying the entire lease period upfront. For example you can pay a 25 year lease for AUD500,000 (AUD20,000 per annum) or you can pay a 2 year lease for AUD60,000 (AUD30,000 per annum). When you negotiate a longer lease period you would expect to get a lower rate per annum however you need to invest more upfront. At the expiry of the lease term you can negotiate an extension at the current market rate otherwise the property returns back to the original owner.
How Can Foreigners Lease Properties in Bali
Foreigners can lease properties in Bali by entering into leasehold agreements with local owners. If foreigners want to rent these properties out short term to make a profit (rental arbitrage) then you need to setup a local company and have a business permit to do so legally. You will also need to consider who will manage your property from listing it on short term rental websites to cleaning your property after each guest vacates.
Navigating the market in Bali can be quite difficult due to language, legal barriers, market knowledge and simply trusting that any funds that you transfer offshore to Bali will actually go into the correct account. The majority of businesses and professionals in Bali use WhatsApp to communicate information about property settlements and this can be difficult to comprehend.
The Property Room Can Help You
The Property Room offers a service to help clients looking to purchase leasehold property in Bali in addition to a property management service so you can safely navigate the market without the stress of dealing with offshore property.
We offer property options beginning from AUD60,000 and you can invest directly in your own name or through a qualifying Self Managed Super Fund.
Visit our website to learn more.
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