Invest in Bali: All You Need to Know in 2025

With tourism consistently rising and favorable market conditions, 2025 presents a prime opportunity to invest in Bali’s real estate.

This post will guide you through the key aspects of investing in Bali’s property market, including market trends, legal requirements, potential returns, and the investment process.

Why Bali? Understanding the Investment Potential

Bali’s stunning natural landscapes, from its iconic beaches and lush rice terraces to its rich cultural heritage, make it an attractive destination for both short-term and long-term visitors. In 2025, several factors continue to drive the appeal of investing in Balinese real estate:

• Tourism Growth: Bali remains one of the top tourist destinations globally, attracting millions of visitors each year. This constant influx creates demand for accommodation, making property investments highly attractive.
• Expat and Digital Nomad Influx: With the rise of remote work, Bali has become a hub for digital nomads. This has spurred the demand for rental properties, particularly villas and long-term accommodations.
• Growing Property Market: Despite global economic fluctuations, Bali’s real estate market continues to show steady growth. Investors can expect a blend of personal enjoyment and financial returns by renting out properties to tourists or long-term tenants.

Types of Property Ownership in Bali

Investing in Bali’s real estate as a foreigner comes with specific legalities that need to be navigated. Understanding the different property ownership options is crucial:

1. Leasehold Ownership: This is one of the most common ways foreigners can invest in property. A leasehold contract grants the right to use the property for a specific period, typically between 20-30 years, with options for extension. Leasehold agreements are popular due to their flexibility and relatively lower upfront cost compared to freehold properties.
2. Freehold Ownership: While Indonesian law restricts foreigners from owning freehold property directly, they can do so indirectly through a legal entity known as a PT PMA (foreign investment company). Freehold properties are ideal for long-term investments, offering stability and control over the property for up to 90 years through a structured legal setup.

The Investment Process: Step-by-Step Guide

Investing in Bali’s real estate requires careful planning and understanding of the local processes. 

Below is a breakdown of the essential steps to help you navigate the investment journey smoothly:

1. Identify the Right Property: Bali offers a wide range of real estate options, from beachfront villas to jungle retreats. The type of property you choose will depend on your investment goals, whether it's short-term rentals through platforms like Airbnb or long-term leasing to expatriates and retirees.‍
2. Negotiate and Lock the Deal: After the legal checks are in place, you’ll enter the negotiation phase. Once an agreement is reached, a refundable deposit is typically made to secure the deal. A Memorandum of Understanding (MoU) will be drafted, outlining the terms of the purchase.‍
3. Due Diligence and Legal Checks: Once you’ve found a property, performing thorough due diligence is essential. This involves verifying the property’s legal status, ensuring that it complies with zoning regulations, and confirming ownership details. Engaging a notary and working with a trusted local real estate agency will help mitigate risks.‍
4. Finalizing Contracts and Payments: Upon successful due diligence, a formal contract is drawn up, followed by the payment process according to an agreed schedule. The entire acquisition process can take anywhere between 10 to 30 days, depending on various factors such as property type and legal complexities.

Market Trends in 2025: What to Expect

In 2025, Bali's real estate market continues to cater to a diverse range of investment strategies, from short-term villa rentals to long-term residential properties. Here are some key market trends to keep in mind:

• Villa Rentals: Villas remain a top choice for investors looking to capitalize on Bali's booming tourism industry. The daily villa rental model, particularly through platforms like Airbnb, offers high returns, especially in prime locations like Seminyak, Ubud, and Canggu. However, investors should be mindful of operational costs such as maintenance, utilities, and management fees, which can take up to 35-55% of rental income.
• Long-Term Rentals: For investors seeking stable cash flow with minimal management, long-term rentals offer a solid option. Renting to expats and digital nomads for monthly or yearly periods guarantees consistent income and reduces tenant turnover. Additionally, long-term rentals often achieve near 100% occupancy rates due to the rising demand for medium-term accommodation.
• Sustainable and Eco-friendly Properties: With increasing environmental awareness, eco-friendly villas and sustainable developments are gaining popularity. Properties designed with sustainability in mind, using renewable energy sources and sustainable building materials, attract a growing number of conscious travelers and expats, offering a unique selling point for investors.

Key Considerations for Investors

While Bali offers numerous investment opportunities, there are critical factors to consider to ensure a successful venture:

• Local Regulations: Navigating Indonesia’s legal framework for property investment requires a solid understanding of the regulations that apply to foreigners. For example, the minimum requirements include having a valid passport and financial documentation to proceed with property purchases or setting up a business.
• Cost of Management and Maintenance: Operational costs, especially for rental properties, can significantly impact profitability. Consider the cost breakdown, which includes taxes (10%), maintenance (5-10%), and management fees (10-25%). Properly balancing these costs is essential to maximizing your returns. Use our ROI calculator.
• Company Setup for Business Rentals: If you plan to operate a rental business in Bali, you’ll need to establish a PT PMA, which allows you to manage property rentals legally in Indonesia. This setup ensures compliance with local tax laws and offers a more streamlined business operation.

Expected Returns: What Investors Can Expect

Bali’s real estate market offers a wide range of potential returns, depending on the type of property and rental model you choose. Villas targeting the short-term rental market typically yield the highest returns, with net yields of 15-20% annually.

Meanwhile, long-term rental properties tend to generate more stable, albeit slightly lower, returns of around 8-10%.

Additionally, property values in Bali have shown consistent appreciation over the years, making it a valuable long-term investment. In popular areas like Uluwatu, Ubud, and Canggu, property prices continue to rise as demand outstrips supply, driven by both tourism and expatriate communities.

‍

Conclusion: Why Invest in Bali in 2025?

Investing in Bali offers the perfect combination of lifestyle and financial rewards. With its booming tourism industry, growing expatriate population, and steady real estate market, Bali continues to be a hotspot for savvy investors looking to diversify their portfolios. Whether you're looking for a tropical getaway that pays for itself or a high-yield investment, Bali's property market in 2025 is ripe with opportunities.

At Kitn Estates, we specialize in helping foreign investors navigate the complexities of Bali’s real estate market. 

With a proven track record of success, we are committed to providing personalized services that ensure a smooth and profitable investment experience. Reach out to us today to explore your options and take the first step toward owning a piece of paradise!