|
Secret to Bali Real Estate Investments
Bali Sun Newspaper Reprint, Sept 5, 2003 The secret to successful real estate investments is the same as any successful investment "find out where the demand is, and fill it". A survey over the past few months of demand from renters and buyers of Bali real estate leads to several conclusions. First, there is definitely a demand for affordable single-family homes that rents for Rp. 30,000,000 to Rp. 50,000,000 per year. Single renters and couples without children are seeking 2-3 bedroom homes with 100 to 400 square meters of land in popular residential areas such as Sanur, Renon, Seminyak, and Canggu. There is still a large selection of these homes available.  Unfortunately,
from a real estate investment standpoint, these low cost rentals make little sense unless you are willing to wait 10 to 20 years for a good return.
To make a lot of money in the next 3 to 5 years it is best to focus on the fastest rising demand for  rental properties, private luxury villas. There has been a dramatic increase in demand for 2 to 3 bedroom villas and homes that feature private swimming pools, air-conditioned bedrooms, and 400 to 800 square meters of land.
A survey taken last week of many of Bali's most successful villa complexes that cater to real estate investors leads to some surprising conclusions. 
First, and most surprising is that although many hotels only have 40% to 50% occupancy rates several villa complexes which have been in operation for more than two years are enjoying average 70 % occupancy the last week if August. Even more surprising is the fact that they have not drastically reduced their rates to achieve this near normal occupancy. One of the largest villa complexes in Bali was 80 % full (according to their staff).
The average rental price was $350.00 per day for a 2-bedroom villa with private pool on approximately 400 m2 of land. This complex is not even close to the beach. Another similar complex on the popular Jalan Oberoi road close the beach and Bali’s most popular restaurants was 60 % occupied at $260 per day for only a one bedroom villa on 300 m2 of land . With these kind of occupancies and affordable purchase prices from $160,000 to $180,000 cash flow projections indicate that an average returns of 20 % to 40 % per year over the next ten years is conceivable, and believable.
Although Bali s tourist arrivals are lower than last year due to Bombings, SARS, and war, the Jakarta post revealed two days ago that the tourist arrival numbers for Indonesia were only down 10 % from July of last year prior to the bombing. The new luxury villa complexes that are still for sale are selling quickly with the buyers enjoying almost immediate appreciation. Examples of this are two large villas in Sanur where the owners were offered
23 % more within 60 days of completion.
 Return to Bali-News-10-03 |
