Building property in Bali offers significant investment potential, but deciding whether to buy an existing property or build from scratch can be challenging. I’m Utami, a business journalist at Bukit Vista, and in this article, we aim to provide you with the critical information needed to make the best decision for your investment goals. We’ve gathered some of the most pressing questions from our clients seeking strategic investment advice and asked our CEO, Jing, who brings over 15 years of experience in Bali’s real estate market, to share his insights and answers.
So, what are the essential factors to consider? Let’s explore them in detail.
1. Cost and Time
When deciding between building or buying property in Bali, cost and time are crucial factors. For example, leasing 500 sqm of land in Canggu at $1,295 per 100 sqm per year would cost $6,475 for a 25-year lease. Construction for a property in the $100-200/night category costs around $340 per square meter, leading to a total construction cost of $170,000. Therefore, the total cost of land and buildings in this simplified scenario would be approximately $176,475.
Building property in Bali may not be the ideal choice for investors who have significant family and work obligations, as the process can be time-consuming and requires a substantial commitment. Additionally, those who are not patient enough to navigate the complexities of Indonesian bureaucracy may find the experience frustrating. On the other hand, investors with a DIY mindset, ample free time, and a taste for adventure are more likely to thrive in this environment. These individuals will appreciate the opportunity to manage the quality and customization of their future home, making the building process a rewarding endeavor for those who are willing to take on the challenges involved.
2. Quality Control
When building a property, you have complete control over the materials and construction process. This level of control as shown in this YouTube blog is crucial, especially in Bali, where the tropical climate can cause issues such as water leaks or mold if the construction is not done to high standards. Investors who prioritize quality often prefer building because it allows them to ensure that the construction meets their exact specifications. This approach reduces the risk of hidden problems that are commonly found in pre-built properties, such as improper plumbing, poor WiFi access coverage, and insufficient waterproofing, which can lead to bad smells, slow internet, and mold, respectively.
As property managers, Bukit Vista offers services to pre-inspect properties before construction is finished to ensure that your vacation rental is set up for success from the start.
3. Contractor Reliability
One of the common concerns for investors building property in Bali is the reliability of contractors. In the past, stories of contractors failing to deliver on their promises were widespread. However, the rise of social media and online reviews has made it easier to vet contractors before hiring them. Today, contractors are more accountable, with a wealth of online reviews and ratings providing insight into their reliability.
Rather than relying on a single recommended vendor, it’s important to find the best contractors for your project. Researching a variety of vendors, reading through both positive and negative Google Reviews, and comparing their services can help you make an informed decision. At Bukit Vista, we encourage our clients to thoroughly vet multiple contractors to ensure they find the best fit for their specific needs. This approach mitigates risk and allows for a more personalized choice.
We’ve also gathered a collage of Google Reviews from both highly rated vendors and those with poor feedback, offering you a balanced view of the contractor landscape in Bali. Taking the time to review this information will help you navigate the selection process more effectively.
4. Customization
Building a property offers unparalleled opportunities for customization, allowing investors to design their property to meet their exact needs, preferences, and visions. Whether it’s a modern villa equipped with state-of-the-art amenities or a traditional Balinese-style home, building enables you to create a unique property that truly stands out in the market.
This level of customization is particularly beneficial for those targeting specific market niches, such as luxury vacation rentals or eco-friendly retreats. It provides the flexibility to incorporate unique features that appeal to these segments. Conversely, buying a pre-built property means settling for what’s available or investing additional funds in renovations and upgrades to meet your specific needs. To explore more about property design options and customization, visit our page.
5. Investment Return
Return on investment (ROI) is a crucial factor for any property investor. While some pre-built properties in Bali may offer decent returns, building your own can often yield higher profits. The lower initial costs associated with building can lead to a more favorable ROI once the property is sold or rented out.
However, accurately calculating potential returns is essential. Factors such as location, property type, and current market trends must be carefully evaluated. For investors willing to take on the additional work and risk of building, the rewards can be substantial. To ensure your investment is optimized for maximum returns, consider utilizing Bukit Vista’s property valuation services to measure and enhance your ROI effectively.
Conclusion: Making the Right Choice Building Property or Buying Property in Bali
Deciding between buying and building a property in Bali depends on your individual investment goals, timeline, and willingness to engage in the construction process. Building offers cost savings, customization, and potentially higher returns, but it also requires time and involvement. Buying, on the other hand, provides immediate access to the property market but may come with higher upfront costs and less control over quality.
By carefully considering the factors discussed in this article—cost, time, quality control, contractor reliability, customization, and investment return—you can make an informed decision that aligns with your investment strategy in Bali’s dynamic property market.
If you’re looking to dive deeper into Bali’s property market, whether you’re interested in building property or buying property, our team at Bukit Vista is here to help. Consult with us for property management in Bali or explore your investment options today to ensure your investment in Bali is a success.