First Investment: Buying a Land or a Finished Property? If you want to invest in Bali but haven’t decided between buying land or a ready-built villa, both approaches offer unique advantages and cater to different objectives. Find out about all the advantages and disadvantages in the text.
Owning land in Bali offers freedom and significant long-term potential. Land values continue to rise in high-demand areas such as Canggu, Ubud, and Seminyak. Purchasing in a development-approved zone provides a strong foundation for future returns, whether for rental income or personal use.
One of the greatest advantages is plasticity – you control the design, timeline, and budget. It’s ideal for those looking to build a custom home or a commercial project, and even gives you the option to develop in phases.
However, there are complexities. Foreign nationals are prohibited from directly owning freehold property (Hak Milik). Instead, options include leasehold titles, or ownership through a local company (PT PMA) with rights such as Hak Pakai or HGB. It’s essential to work with qualified attorneys and licensed agents. Construction carries risks – from permit issues and untrustworthy contractors to dealing with complex local rules. There’s also the danger of scams involving fake land certificates.
If your goal is obtaining passive income, ready-built villas or apartments are a strong option. In Bali’s, rental yields can range from 8% to 15% annually, with property values typically increasing by 7%–12% per year. This offers stable income with minimal effort – no need to manage construction or deal with builders.
Off-plan and pre-sale properties are also worth considering. These allow you to purchase at a discounted price during development and potentially gain capital appreciation by the time the project is completed. However, this strategy depends heavily on the reliability of the developer.
The trade-off with ready properties is reduced flexibility. You get a fixed layout, and customization options are limited.
It all depends on your goals. If you want a tailor-made property and are focused on long-term capital growth, land may be the better route. If you're looking for a hassle-free investment with faster returns, a ready-built villa or apartment might be the best fit.
The legal structure is also important. Foreigners can typically acquire leasehold rights or ownership through a PT PMA, which grants HGB. Legal due diligence is essential – including checking zoning regulations, obtaining the right permits, and working with certified legal professionals.
Zoning regulations are especially critical. Green zones often cannot be developed. Always ensure the land aligns with your investment objectives. So, if you want to buy property, you can always contact DDA Real Estate. Buy an apartment in Bali with us.
