Are you a non-Indonesian? Are you looking to invest in a property here for your tourism business? Then, nothing can be a better location than Bali. It is an earthy paradise with the breathtaking beauty of nature, including mountains, white sand beaches with palm trees, great locations for surfing, and much more. No wonder it is known as ‘The Island of the Gods’.
Should a Foreign Investor Go for a Leasehold Land or Rental Property?
For many years, Bali has been one of the excellent tourism hubs in Indonesia for its stunning and mesmerising landscapes and travel offerings. So, being a foreign investor, while thinking of investing in a top-choice tourism property for your business, this location is perfect.
But when it comes to decision-making regarding options- rental or leasehold land, you should take the following facts into account:
Leasehold property
According to Indonesian laws, there are two different kinds of ownership in Bali- Leasehold and freehold. But non-Indonesians or foreigners can own freehold properties if creating a PT. PMA company (100% foreign company). But there are special requirements to open a PT. PMA company.
Otherwise, they can go for leasehold lands, which are also of high quality. However, a leasehold property in Bali comes with a long-term agreement, but the ownership refers to the original landowner, not the foreigner investing in it.
But the advantage of investing in a leasehold land for foreign investors is that they can lease the property for 25 years first, and if required, they can extend the lease for up to 70 years with the Right to Lease (Hak Sewa). Also, if you are a foreign investor, you can sub-lease the land to other people as well to make your investment profitable with guaranteed ROI.
In fact, using your leasehold land as Bali property ownership by renting it for business can allow you a boost in your passive income. Plus, you can sell it at any time and earn the maximum ROI.
All you need is to sign a leasehold agreement with the owner with the help of third-party legal assistance and renew the contract from time to time.
Long-term rental property
For foreigners, there are options to rent properties in Bali. Here, you need to sign the rental agreement with the property owner in the presence of a legal assistant as a witness. In fact, the sign of the legal assistant is also required. Its advantages include:
- No contract renewal
- Less maintenance
- Management assistance
- Privacy
Yet, it’s perfect for extended vacations, relocation or business trips for groups or families and even commercial activities, like cafes, restaurants, shops etc, not intending to purchase the land.
However, though long-term rental property comes with fewer maintenance costs than leasehold land, the latter is a better alternative if seeking properties for sale for tourism businesses because the longer-term rental period lasts between only 1 to 5 years (with extension options).
Bottom Line
No matter which option you prefer for investing in properties in Bali- Bali leasehold land for sale or rental properties, never overlook the importance of legal assistance, especially when having no idea of Indonesian laws and property management rules and whom you are dealing with.
So, whether looking for beachfront land for sale in Bali for a lease or seeking legal assistance to lease or have rental accommodation for villas here, count on us. At Prestige Property Bali, we can help you identify your favourite locations available for sale with details while assisting you with property legalization as well. We are the leading real estate and rental marketplace in Bali.
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