What is the return on investment for real estate in Bali? The honest answer for 2026: A realistic net return (ROI) for a well-managed villa lies between 8% and 12%, and sometimes even higher—up to 20%—for exceptional projects. This makes Bali one of the most attractive locations worldwide for real estate investment.
Although returns of 20% or more are often touted, these are not always achievable in today’s mature market. Nevertheless, the real estate market continues to offer highly lucrative opportunities for foreign investors, partly due to the lower tax rates. In this article, we break down the numbers: from gross rental income to what actually remains on the bottom line after all expenses.
The Numbers: Gross vs. Net ROI on Bali real estate
To accurately calculate your returns, it is crucial to understand the difference between the gross and net ROI of Bali real estate. When renting out a holiday home, several operational costs must be deducted from your revenue. Are you looking to buy a house in Bali? Then having a clear understanding of all associated costs is essential before making an investment.
Below is a realistic calculation for a €250,000 villa in a high-demand area (such as Pererenan or Bingin), based on 2026 market data:
ROI Calculation (2026 Example)
| Item | Amount | Notes |
|---|---|---|
| Initial Investment | € 250,000 | Purchase Price Turnkey Villa |
| Gross Rental Income | € 45,600 | At € 200/night and approx. 62% occupancy (228 nights). |
| Less: Marketing & Platforms | – € 6,840 (15%) | Airbnb/Booking.com fees. |
| Less: Management Fee | – € 6,840 (15%) | Full management (cleaning, check-in). |
| Less: Operational Costs | – € 4,500 | Electricity, Wi-Fi, pool maintenance, staff. |
| Less: Indonesian Taxes | – € 2,280 (approx. 0.5-1%) | PBB (Property Tax) & Profit Tax.* |
| Net Profit (Before tax in country of residence) | € 25,140 | Based on the initial investment |
| Net Return (ROI) | 10.1% | Realistic scenario 2026 |
*Note: The 10% PB1 (Tourist Tax) is often passed on to the guest and does not directly affect your margin.
** This example is for illustration purposes only; actual costs and returns vary per project. Please ask for a customized calculation.
What locations on Bali have the best ROI?
At BPA, we analyze market data using advanced tools that track rental occupancy rates. Looking at nightly rates and occupancy levels, several locations currently stand out. Here are a few key examples:
Emerging Areas (Seseh, Cemagi, East Bali): These areas are prime targets for capital growth. Direct rental yields have been rising steadily, and the appreciation of land value (capital appreciation) is often substantial. For instance, take a look at our Amare Candidasa project.
Canggu & Berawa: This market has grown rapidly in recent years. With over 84,000 active listings across Bali, competition is fierce. Occupancy rates in Canggu sometimes dip to 60-65%, which puts pressure on yields. Differentiation and unique projects are absolutely essential here. (Source: AirDNA overview)
Uluwatu & Bingin: In 2026, returns are generally higher in this region (10-14%), driven by strong occupancy and premium nightly rates. The demand for luxury villas outweighs the supply, and the stunning cliffside locations create a unique rental product that justifies higher pricing.
Property Ownership on Bali
In Bali, investments are typically structured through Leasehold or Freehold arrangements. Leasehold allows foreigners to legally lease land long-term, including the rights to build and use the property. For ultimate security and ownership rights, many foreign investors establish a foreign-owned limited liability company, known as a PT PMA. Read more about Leasehold vs. Freehold here.
How to increase your Bali investment ROI
Looking to position your property at the top end of the rental market (12%+ ROI)? Focus on these three core pillars:
Quality Property Management: A professional management company makes all the difference. Choose a reliable partner with a proven track record. Paying slightly higher fees for a premium management company is almost always worth the investment, as it allows for a truly hands-off, worry-free experience.
Differentiation: A “standard” villa no longer cuts it. Incorporate unique features like an ice bath, a home cinema, or unobstructed rice paddy views. This directly boosts your occupancy rates.
Airbnb Superhost Status: The Airbnb algorithm dictates your visibility and success. Responding within 5 minutes and consistently securing 5-star reviews can significantly increase your bookings.
Conclusion: Is Investing in Bali Still Smart in 2026?
Yes, absolutely. But the explosive, unregulated growth seen between 2021 and 2025 has leveled off. The market has matured. Investors who enter the market in 2026 with a strict focus on quality, legal security (PT PMA), and proper location/zoning can build a highly stable return that far exceeds the average ROI found in European real estate.
Want to invest safely and profitably in Bali?
Download ‘The Bali Real Estate Guide 2026’ for free and discover how you can enter the market securely as an international investor.
- The exact steps to secure 100% ownership via a PMA.
- How to smartly navigate local and international property taxes.
- The 5 most common legal mistakes made by foreign investors.
