Buying a Villa in Bali: Things You Need to Know First

   2.5 million people visit Bali each years, it's golden sandy beaches, ornate and tranquil temples and beautiful smiley people - prove a major attraction for people from all over the world. Security across the region has been greatly improved and stabilised since the disastrous bombing, and visitors are returning to the Island of smiles in their droves.

There has never really been a better time to consider buying a villa in Bali, and the really shrewd investors got in there much much earlier.

Despite popular opinion, purchasing a villa in Bali is not guaranteed to be easy or cheap, and there are local laws that need to be considered every step of the way. It's also worth mentioning that a holiday home can have high maintenance costs that need to be met even when you're not enjoying your new des res, so thorough planning is of the utmost importance.

However, don't let that put you off, so long as you are willing to take the time to manage you investment well, you will still be able to bag yourself a fantastic deal.

The legalities of buying a villa in Bali

Many new investors in Bali don't initially realise that foreigner are not allowed to own land, in addition they are also not permitted to own freehold rights over any particular building. The only option for foreigners looking to enjoy the benefits of ownership in Bali is to purchase was is known as a "HAK PAKAI", which in its essence is nothing more than a lease with 25 years.

This type of lease is often of no real value to investors as you can't get any sort of financial product such as a mortgage with this type of arrangement Another real problem with this is that it limits you from renting out your villa to other Bali holiday makers when you are not using it with your own friends and families.

There are a number of solutions to this tricky problem though, mostly commonly, to hold the building in trust with a native Indonesian person as the nominee, or to form a type of foreign investment business, namely a PMA.

The solutions are as complicated as they are time consuming, but they repeatedly work well for smart investors who make the time to ensure they really understand the system and process and chose wisely when selecting a nominee. A bad nominee choice can lead to no end of trouble.

However, there are numerous companies that will assist you in navigating the arising issues for people interested in buying a villa in Bali, so there really is no need to tussle through the process all on your own

When Buying a Villa in Bali, local experience is priceless

If you take nothing else away from this article, the most important bit of advice you will get about buying a villa in Bali is: to make time to visit the island before you commit, and ideally at different times of the year.

Choosing the best location for your new Bali villa and life changing investment is of the utmost importance, so in any event making sure you try before you buy - is pretty much essential. Move around the island, get a feel for different places, there lay out, and the type of expats who reside there.

Speak with your prospective neighbours. Knowing a little Bahasa before hand will work wonders in this process, and make sure you speak to as many expats currently living your dream as possible. This will prove an invaluable source of information about the most dependable property management agents in the area, and is often the way people stumble across the best deals - like new Bali Villas up for sale that have yet to be advertised.

Sound guidance is to spend at least one month enjoying and exploring the island, staying in different Villa rentals in different regions, before making your decision.

Buying a villa in Bali can be a stressful but also intoxicating process as you realise how far your money can stretch, but it's not without its challenges and pitfalls. Much of this can be avoided if you take sound advice and don't rush the process.

Despite the title, my focus in this short article is property in the south end of the island, where most of the tourist and expat activity is centered.

If you look on a map at the location of Ngurah Rai International Airport in Bali, you will see that it sits on a narrow strip of land, essentially where the island's east coast angles into its southwest coast. As you might expect, most of the tourism and tourist infrastructure exists fairly close to the airport, especially since the very pleasant beach that starts in Kuta and runs up through Legian, Seminyak and points beyond, begins just a mile or so north of the runway.

However since the island is very narrow in this area, development cannot expand to the east or the west because of the ocean, and so has tended to move almost reluctantly northward, while staying as close as possible to the coastline The simple tendency of people (westerners at least, apparently) to want to remain close to the beach while staying convenient to the airport as well, creates opportunities for you if you want to be a property owner in Bali. In a word, you are at an advantage if you can buy, say, within 10 km/6 miles of the airport and within half a km/500 yards from the beach. The point is that because of the shape of the island, the scarcity of land so close to the airport as well as a limited amount of livable coastline will work to your advantage, as an owner.

There is an additional constraint that is in your favor, and that is the building height limitation that exists in Bali. Originally the idea was that no building could be taller than a palm tree. That standard has certainly been 'de-emphasized', if recent property development is any indication, as five and six story buildings are not uncommon now on the island's south end, and more are being built in 2010. However, it seems unlikely that increasing the supply of hotel rooms and condos/apartments in the form of highrises à la Honolulu, Hong Kong or Singapore will be accomplished in Bali by building upwards from here, at least not anytime soon. Add this to the natural scarcity of beach land as well as the very limited amount of land within my arbitrary 10 km radius of the airport, and you have a recipe for some appreciation long-term.

All this is just one man's opinion, and (full disclosure) I have owned a small place since 2005, so I'm probably biased. Hey by the way, why not come and take a look for yourself?

Bali has had its fair share of travel horror stories, from tourist assaults, scams and road accidents to more extreme events such as drug busts and the traumatic bombings of 2002 and 2005.

As the stories mount up, it is understandable that tourists are a little apprehensive about visiting, what can be portrayed as a volatile region.

Yet beyond the media hype, Bali is a stunning country, when compared with many other countries is reasonably safe; the dangers faced are not dissimilar from the common dangers faced at home.

While common sense will get you a long way, here is the our guide on how to feel safe in Bali.


Where violent crime is uncommon in Bali, petty theft can occur, but can easily be avoided. Most high end properties are located in secure grounds with 24 hour security. However taking these necessary precautions can make all the difference.

Make sure to lock all outdoor doors and windows.

Keep valuables either on you or in the in-room safe.

When exploring the streets, carry copies of you passport and travel documents (leave the originals in a safe).


The Balinese roads are hectic and hazardous so care does need to be taken when travelling them.

Many luxury vacation villas either come with, or can arrange, drivers for you and your party. Using a driver is a sensible option, any stress that navigating the chaotic streets you may face is taken away because of their knowledge of the roads and traffic.

For those who seek the freedom hiring a scooter brings, these simple rules will hold you in good steed; always carry your international drivers license (including motorcycle license), always wear your helmet and be aware of your surroundings.

Pedestrians should always be aware of what is going on around them, never expect the traffic to stop for you, even when on a pedestrian crossing. There are no traffic rules, so always assume the vehicle has the right of way.

Scams, Hawkers and Touts

Like many tourist countries Bali is rife with hawkers, particularly in areas of tourist attractions. To avoid getting embroiled in a scam or buying something you don't want, the best advice is to simply ignore them. Not making eye contact, may seem rude, but is essential if you want to avoid hawkers.


Corruption is rife in Bali, so it pays to educate yourself and know your rights before going.

If you are pulled over by the police it is important to know that a legitimate fine can be paid at any police station or the Denpasar Court House. Many police pull unsuspecting tourists over and demand payment upfront or threaten a court proceeding - going to court is not necessary. Keeping the tourist police phone number programmed in your phone, presenting this can often act as a deterrent if the police are insisting instant payment.


Strict drug laws with harsh penalties including the death penalty should be enough to warn anyone off buying or taking drugs in Bali.

It is not uncommon for tourists to be offered a variety of cheap drugs while on the beach, in nightclubs and walking the streets, these can often be stings and even if not, it is best to just walk away.

Lonely Planet notes that clubbers can be hit with random urine tests. In other words, unless you're happy gambling with your life, stay away from illicit drugs when holidaying in Bali.


Ever since the 2002 and 2005 bombings, Bali has received bad press for its dangers including terrorism. It is important to note that while, terrorism is a serious threat throughout the world, Balinese have taken many precautions to avoid such events from happening again. Extra security measures are taken in shopping malls and clubs to maintain a certain level of safety.

Final Word

While travel to Bali does come with a certain amount of risk, following these guidelines mitigates the chances of being involved in your own horror story. Remember, last year 2.8 millions tourists visited Bali in 2013, the vast majority returning with incredible stories of a stunning tropical island paradise.


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