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Updated about 1 year ago, 11/18/2023
Buying villan on Bali for short term rental and resale
I am going to buy a villa in Bali. The house I have chosen is located on land leased for 30 years and will be completed in 6 months (already standing walls and work is going on intensively). Due to the fact that the villa is not finished, the price is lower than the finished price by about 20%. My market research has shown that it is realistic to get rental income in the range of 12-15% per annum, after deducting taxes and all running costs, ranging from salaries of employees to the commissions of bouking. Also studying the real estate market in Bali I noticed that most villas are sold with a 25 year land lease. And the cost per square meter is an average of $ 2000, as a lease for 25 years and 30 years. I do not know why there is no difference, but it is a fact. Given these circumstances, I developed a strategy: buying a villa and its rent daily for 4 years with an income of 48-60 percent and the subsequent sale with a profit on the purchase price of 30% (my 20% discount for buying at the construction stage + 10% increase in value over 4 years).
Total I plan to earn from 90 to 105% within 5 years (one year I take into account for the sale of the villa and during this time it will be rented).
Will you criticize my plan? It is interesting to hear the opinion of someone who has had a similar experience