ROI stands for “Return on Investment.” It evaluates the profitability or performance of any investment, typically expressed as a percentage.
The formula for calculating ROI is:
ROI = (Net Profit / Cost of Investment) x 100
In this formula:
- “Net Profit” for Bali Real Estate market Bali refers to rental income minus all expenses, such as mortgage payments, property management fees, taxes, insurance, maintenance, and marketing costs.
- “Cost of Investment” represents the total amount of money invested in the project or asset, including the initial purchase price and any additional expenses such as maintenance or renovation costs.
According to statistics, Bali offers attractive ROI. The average property ROI in Bali is within the range of
12% to 20% per annum.
High demand drives sale prices upward, which is promising for investors
Analysts and experts project that the Bali property market will remain attractive and stable in 2023 and beyond, offering consistent growth and returns.
Real estate investments in Bali, like elsewhere, exhibits different ROI over time. Due diligence, market understanding, and professional advice are vital to make the best investment decisions.
Factors Impacting Bali Real Estate:
- Location: Bali’s diverse regions offer different investment potentials. Areas like Seminyak, Canggu, Ubud, and Uluwatu, popular among tourists, tend to yield higher rental returns and property appreciation.
- Property Type: Luxury villas typically command higher rental rates and offer better ROI potential. However, they also entail higher upfront and maintenance costs. Budget or mid-range villas cater to a different market segment, affecting rental income and ROI accordingly.
- Market Conditions: Economic and political stability can significantly impact the demand for rental properties and, subsequently, your ROI in Bali.
- Property Management: Effective property management is crucial for maximizing ROI, ensuring properties are well-maintained and marketed.
- Operational Expenses: Property-related costs, including taxes and maintenance, should be considered when calculating potential returns.
- Seasonality: Understanding peak and off-peak seasons is vital for estimating rental income and ROI accurately.
