Bali is one of the most attractive destinations for living and investing in Southeast Asia. Known for its stunning beaches, rich culture, tropical climate, and relatively affordable cost of living compared to Western countries, this Indonesian island offers a wealth of opportunities. With steady tourism, a growing economy, and a dynamic real estate market, Bali appeals to both long-term residents and investors interested in rental property.
Before deciding on long-term living in Bali, it's essential to determine which option suits you best: renting or buying property. This decision depends on multiple factors, including your budget, legal considerations, investment goals, and personal lifestyle preferences.
Advantages of Renting Property in Bali
Renting is a popular option among expats, digital nomads, and travelers due to its flexibility, low financial risk, and minimal legal hassle.
Flexibility to Explore Different Areas
Bali is home to a variety of neighborhoods—from vibrant tourist hubs to serene jungles. Renting allows you to explore multiple areas and adjust to different lifestyles without long-term commitment.
For example, you may start in Canggu, known for its surfing scene and café culture, then move to Ubud for a quieter, more spiritual environment. Renting enables remote workers to find the ideal location for their needs over time.
No Large Upfront Investment
Buying property in Bali often involves complex legal structures and significant upfront costs. Renting allows you to avoid hefty down payments or legal hurdles. Monthly, six-month, or yearly leases provide financial flexibility, especially for those not ready to commit long term.
Low Maintenance Responsibilities
Renters are generally not responsible for major repairs or maintenance. Issues like plumbing or electrical problems are typically handled by the landlord. Renters also avoid annual taxes and land fees, making this a stress-free option for those who simply want to enjoy island life.
Average Rental Prices in Popular Areas
- Canggu (surf and nightlife): apartments from $400–$1,200/month, villas from $1,000–$4,000/month
- Ubud (nature and tranquility): apartments from $300–$800, villas from $800–$3,000
- Nusa Dua (luxury resorts): apartments from $600–$2,000, villas from $2,000–$6,000
- Seminyak (nightlife and shopping): one-bedroom villa: $1,300–$1,800/month, two-bedroom: $1,800–$2,500
- Jimbaran (quiet beachfront area): two-bedroom villa: $12,000–$20,000/year, three-bedroom: $15,000–$30,000/year
Advantages of Buying Property in Bali
Bali is increasingly seen as a lucrative market for investors and those seeking a tropical lifestyle. Property ownership offers financial security, long-term value, and the ability to generate passive income.
Long-Term Investment Potential
Thanks to rising demand and tourism, property prices in Bali are steadily increasing. By 2028, Bali’s real estate market is projected to reach $81.24 billion USD, with an annual growth rate of 5.82%. Buying property now could yield significant returns over time.
Rental Income and High Yields
The average rental yield in Bali can reach up to 15% annually, far above the global average of 3–5%. Villas and apartments in high-demand areas like Seminyak and Canggu offer consistent rental income, especially during the tourist season.
Stability and Comfort
Buying a home in Bali provides a stable base for long-term living. Foreign buyers can apply for a five-year investor visa, renewable, offering residency and easier business operations.
Average Property Prices by Area
- Canggu: villas $120,000–$400,000, apartments/studios $70,000–$180,000
- Ubud: villas $100,000–$350,000, apartments $60,000–$150,000
- Nusa Dua: villas $200,000–$700,000, apartments $100,000–$250,000
Cost Comparison: Renting vs. Buying in Bali
Long-Term Cost Projection
- Renting:
Renting a villa in Canggu for $1,500/month over 10 years = $180,000
These funds generate no asset or return.
- Buying:
A similar villa costs about $300,000. While it requires more upfront capital, you own a growing asset and can generate income.
10-Year Example:
- Rent: $1,500 × 12 × 10 = $180,000
- Buy: $300,000 + annual maintenance and taxes
Additional Costs
Renters:
- Utilities: $150–$500/month
- Internet: $20–$65/month
- Cleaning/maintenance: $30–$200/month
Owners:
- Transfer tax: 5% of purchase price
- Annual property tax: 0.1–0.2%
- Land tax: 0.1–0.2%
- Insurance: 0.1–0.5%
- Maintenance: 1–2% annually
- Plus same utilities and internet as renters
Legal Aspects for Foreigners
Foreigners cannot directly own land in Indonesia but can use these legal options:
- Leasehold – Most common. Lease land for up to 25–30 years with renewal rights. Offers almost full control and resale options.
- Nominee Agreement – Property registered under an Indonesian citizen. This method is high-risk and not recommended due to lack of legal protection.
- PT PMA (foreign-owned company) – Allows you to buy and own land under Hak Guna Bangunan (HGB). Requires setting up a company and conducting actual business operations.
Taxes for Renting and Buying
- Transfer Tax (BPHTB) – 5% of purchase price
- Annual Property Tax (PBB) – 0.1–0.2% of assessed value
- Rental Income Tax – 20% for non-residents, 10% for KITAS visa holders
Risks to Consider
- Construction quality – Bali’s humid climate can lead to mold or structural issues
- Legal safety – Nominee agreements put ownership at risk
- Infrastructure – Check for legal road access and water/electricity connections
Who Should Rent vs. Who Should Buy?
Renting is Best for:
- Digital nomads – Flexible living with minimal commitment
- Retirees testing the waters – Get to know the island before committing
- Families relocating temporarily – Try different areas and schools first
- Short-term investors – Avoid long-term risk and legal complexity
Buying is Ideal for:
- Investors – Earn rental income and benefit from rising property values
- Families settling long-term – Gain stability and reduce monthly costs
- Retirees on permanent move – Secure your lifestyle for the next 25+ years
- Entrepreneurs – Purchase commercial space under a PT PMA and build a business
Conclusion
- Renting is ideal for those valuing flexibility, low upfront costs, and short-term living.
- Buying is the better choice for long-term residents, investors, and entrepreneurs seeking income and asset growth.
Your decision depends on your goals, financial capacity, and lifestyle. Whichever path you choose, thorough research and professional advice will help ensure a safe and rewarding experience.
Need help exploring rental or purchase options in Bali?
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