Bali · Returns · 4 min
Bali: Why Advertised Yields Don't Match Independent Estimates
Global Property Guide's independent estimate puts gross yields for villas in Bali at 2.93-5.47%, averaging 4.24%. Double-digit figures in advertisements are almost always based on a nightly-rental scenario before expenses, and do not account for the long-term lease losing value over time.
Key figures
What the independent estimate says
In its Q3 2026 data (updated August 2026), Global Property Guide estimates gross yields for villas in Bali based on asking prices and long-term rental rates (Global Property Guide):
- 1 bedroom: $159,800 and $440 per month - 3.30%;
- 2 bedrooms: $184,400 and $840 - 5.47%;
- 3 bedrooms: $240,300 and $1,050 - 5.24%;
- 4+ bedrooms: $497,300 and $1,215 - 2.93%;
- average - 4.24%. According to the same source, net yields are typically 1.5-2 percentage points lower.
Where the double-digit figures come from
An advertised calculation is usually built on nightly rentals: the average nightly rate multiplied by occupancy. Each of these numbers is an assumption, not a fact. Seasonality, competition from new villas in the same area and ratings on booking platforms can change the result a lot.
The second reason is gross figures. The management company, booking platform fees, cleaning, utilities, repairs and furniture replacement take a noticeable share of revenue. If a calculation has no line for expenses, it is a revenue estimate, not a yield.
The third reason is the base. Yield is often calculated on the price without furniture, purchase taxes, the notary and legal due diligence. The real investment is larger, so the same revenue gives a lower percentage. Finally, forecasts for the first years are based on the best properties in the area, while a new villa has no reviews or rating yet.
Long-term lease: yield versus term
Most villas for foreigners are sold as a long-term lease of the land and the property for 25-30 years or more. At the end of the term the property returns to the landowner unless the lease is extended. This means part of the annual income is a return of the money invested, not profit.
A simple rule of thumb: with a 25-year term, about 4% of the price a year (1/25) is needed just to get the capital back. If the gross yield is 5% and the net yield is 3-3.5%, the investment may not pay off by the end of the lease without higher prices for an extension or resale.
So for a leasehold villa the key question is not the percentage in the brochure but how many years are left on the lease, what an extension will cost and whether the right can be sold before it expires. The shorter the remaining term, the faster the resale price falls.
Taxes change the picture
Income from renting out land and buildings in Indonesia is subject to a final tax of 10% of the gross amount; expenses do not reduce it (DJP). Serviced accommodation (nightly rentals run as a hotel business) is excluded from this regime and taxed under other rules, so the structure has to be chosen before the purchase. When buying from a developer, if VAT is not included in the price, it is added to the calculation: the rate is 12%, effectively 11% (the base is 11/12 of the price) (PwC).
For comparison, the same Global Property Guide estimate gives an average of 12% for apartments in Jakarta and 7.57% in Surabaya (Global Property Guide). Bali is expensive relative to long-term rents: buyers pay for the lifestyle and tourist demand, not for a high base yield. That is not bad, but it should be reflected honestly in the calculation.
The practical takeaway: if a villa appeals to you as a place to live and to rent out while you are away, use a conservative long-term rental scenario and treat nightly income as a possible extra on top. If the purchase only makes sense under a nightly scenario with high occupancy, its safety margin is small.
How to check someone else's calculation
This material is general information, not legal or tax advice: the terms are checked for the specific property before a deal.
- ask for the actual 12-month revenue of similar properties, not a forecast;
- check whether management, platform fees, taxes and repairs are included;
- recalculate the yield taking the land lease term into account;
- compare it with the independent estimate - 4.24% on average according to Global Property Guide;
- allow for low-season months and time to launch: in the first months a new property usually has lower occupancy than the area average.
What this means for buyers
- The benchmark from the independent estimate is about 4% gross yield, not the double-digit figures from ads.
- An advertised ROI is a nightly rental scenario; it needs to be recalculated with expenses.
- With a long-term lease, part of the income is a return of capital: subtract 1/lease term per year.
- The 10% tax is charged on gross rental income.
- VAT on a purchase from a developer: 12% rate, effectively 11%, if it is not included in the price.
Current as of . This is general information, not legal or tax advice.
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