Home » News » Buying Property in Bali and Lombok? Avoid These 7 Mistakes with The Agency Bali

Buying Property in Bali and Lombok? Avoid These 7 Mistakes with The Agency Bali

in News

For investors seeking villas in Bali and Lombok, navigating the market for the first time can be challenging. From unlicensed projects to inflated prices and misleading ROI promises, it’s essential to take each step carefully with reliable information.

Projects Lacking Proper Permits (PBG/SLF)

Some projects in Bali lack essential permits, and one of the most significant mistakes is purchasing a villa without the necessary licenses. Every property in Indonesia needs a building permit (PBG) before construction, yet some agents may lead clients to believe an SLF application is enough. This can lead to delays and complications later on.

Simplify Your Investment Process in Indonesia with The Agency Bali

Beautiful walkway to the amazing pool between rice fields

The Agency Bali’s expert team can save you time and money, guiding you through villa purchasing in Indonesia. We handle legal checks, title transfers, notary services, and building permits.

Unlicensed Properties

Owning a villa in Bali does not automatically allow daily rentals on platforms like Airbnb or Booking.com. Daily rentals are permitted only in designated areas, like the Pink Zone and certain conditions in the Yellow Zone, and require specific licenses along with a Business Identification Number (NIB).

Incorrect Location and Unexpected ROI

A common mistake is purchasing in a location unsuited for optimal ROI. Limited infrastructure in Bali can make properties appear close to the beach on a map, though they may be far in reality, reducing appeal and affecting occupancy rates.

Unqualified Agents and Developers

Bali and Lombok have a number of agents and developers without proper qualifications, which can pose a risk to investors. Agents without certifications often give inaccurate information to accelerate sales, potentially impacting taxes and property quality.

Weak Contracts and Lease Extensions

Have an Asian female real estate agent hold a house and key and explain a business contract, lease, purchase, mortgage, loan, or insurance to the woman who buys it.

Whether Freehold (HGB) or Leasehold (Hak Sewa), it’s essential to secure a strong contract. Some agents may offer weak contracts to speed transactions, which sellers may exploit by increasing extension fees or refusing renewals unless construction costs are paid again.

Property Management in Bali and Lombok

Selecting the right property management company is crucial for maximizing ROI on your villa. High management fees can impact profits, so it’s best to choose experienced, transparent management.

Investing Under a Personal Name

It’s advisable not to invest in property under your personal name, especially if you plan to generate income from it. Only licensed companies are permitted to earn revenue from properties. Additionally, corporate tax rates are generally more favorable than personal tax rates.

To make your villa investment in Bali and Lombok secure and profitable, consult The Agency Bali’s team of experts.