Is It Worth Buying a Villa in Bali? What to Check Before You Buy

By Feeels Development · Updated 11 November 2026 · 9 min read

Yes, a villa in Bali can be a good investment. Most of the problems we see on the island come from paperwork, zoning and the choice of developer. Below are the seven things we would check ourselves before signing. We build villas in Uluwatu and have made a few of these mistakes on the way.

1. What you actually own: a leasehold

Foreigners cannot hold freehold land in Indonesia. Most buyers take a leasehold: the right to use the land and the villa for a fixed term, signed in front of a notary. Typical terms are 20 to 30 years.

We tell every client the same thing: in Indonesia you can count only on the term you have already paid for. An “option to extend” is a promise, and its price is often left open. When the lease ends, the villa returns to the landowner unless an extension has been agreed.

• Ask for the extension terms in writing: how many years, at what price or by what formula, and when you have to confirm.
• If the landowner agrees, pay for the extension at the start. It usually costs less now than in 20 years, and the extension becomes part of your contract.
• Check who signs the lease. It should be the person named on the land certificate, or someone with a notarised power of attorney from them.
• Avoid “nominee” deals, where an Indonesian holds freehold title on your behalf. Indonesian law does not recognise these arrangements, so you would be relying on trust alone.

Buying through your own foreign-owned company (PT PMA) used to be the standard alternative. In 2026 Bali restricted new PT PMA registrations in several low-risk business categories, so check what is available today with a licensed consultant before you build a plan around it.

2. The land and its zoning

A villa can have perfect paperwork and still be illegal to rent if it stands on the wrong land. Bali’s spatial plan divides land into zones. Tourism accommodation is allowed only in some of them.

• Ask for the land certificate (usually SHM) and have a notary check it at the land office (BPN).
• Ask for the zoning confirmation for the plot (KKPR). It shows whether a villa for rent is allowed there.
• Be careful with rice fields and “green zone” land. In September 2025, after deadly floods, the Governor of Bali ordered regencies to stop issuing permits for tourism buildings on productive farmland.

3. Permits

Three documents matter for a villa you plan to rent out:

• PBG, the building approval. It replaced the old IMB.
• SLF, the certificate that the finished building is fit for use. Without it, a rental licence is not issued.
• A tourism accommodation licence registered in the government OSS system, plus a local tax number.

Since 2025 Bali has been checking villas for these permits and closing those without them. At the same time, the rules keep changing and approvals take months. A developer may honestly still be in the middle of the process, so ask:

• Which permits are already issued, and can you see them?
• Which are in progress, at what stage, and in whose name is the application?
• What does the contract say if a permit is delayed or refused?

If the reply is “don’t worry, everyone builds like this”, keep asking.

4. Buying off-plan: what the contract must cover

Most villas in Bali are sold before they are built. Indonesia has no standard escrow for these sales, so your money is protected only by the contract and by the developer’s track record.

• Pay by construction stages: foundation, frame, roof, finishing. Avoid paying most of the price before the frame is up.
• Look for a clear schedule and a clause on delays: what you receive if the villa is late.
• Visit finished projects by the same developer, and talk to their owners, not only to the sales team.
• Ask for a monthly construction report with photos. A good developer sends one without being asked.

5. Rental income: recalculate it yourself

Advertised returns are usually gross: the money the villa earns before anyone takes a share. What you receive is smaller.

• A management company typically takes 18 to 35 percent of revenue.
• Booking platforms charge commission, depending on how the villa is sold.
• Each booking pays the local tourism tax, and your earnings pay income tax.
• Humidity, salt air and heavy rain mean painting, pool care and repairs every year.
• A new villa has empty nights while it collects reviews, and the rainy season is quieter.

Ask the developer or manager for a net figure after all of this, and for the real statements of a villa already in operation. A promise of 15 to 20 percent net a year deserves a hard look.

6. How the villa is built

Most complaints after the first rainy season are about leaks, mould and cracks.

• What carries the building: a reinforced concrete frame, brick, timber or steel? How was it calculated for earthquakes? Bali is a seismic zone; see how we calculate our frame for intensity 9.
• How are the roof and wet areas waterproofed, and is there a warranty on it?
• Are the large windows and sliding doors tempered glass with proper seals and drainage?
• Is the frame protected from corrosion?

More on the materials we use: Feeels construction technology.

7. Power, water and the road

• How much electrical capacity from PLN, the state grid, is connected? Air conditioning in every room needs a lot.
• Where does the water come from: mains, a well, deliveries? Is there a filtration system?
• Is there a paved road to the gate that stays usable in the rainy season?
• Where does wastewater go?

Seven red flags

1. Net returns of 15 to 20 percent a year “guaranteed”.
2. Most of the price is due before construction starts.
3. No contract clause about delays.
4. The lease is signed by someone who is not on the land certificate.
5. Vague answers about zoning and permits.
6. No finished projects you can visit.
7. An extension “that will surely be easy” but is not in writing.

FAQ

Read next: Is Bali safe from earthquakes? How our frame is calculated