The vacation lettings market in Bali is growing. If you own villas in Bali, you could be tempted to get into the sector. Perhaps you want to buy a villa to rent out as a vacation rental. Setting up a vacation rental business in Bali for the first time is an exciting adventure. With the demand for Bali vacations increasing year after year, there is a great chance for you to start your own vacation rental business. However, there are tons of things you should consider before jumping into the business and avoid mistakes that can lead to financial mess.
Area and Location of Villas in Bali You Want to Buy
The location is crucial when buying a home, as it is with any other purchase. If you want your vacation home to be busy all year, it’s a good idea to pick a popular destination with a thriving tourism industry. The type of guests you will cater to will be determined by the area and location of your vacation rental. Families will enjoy seaside areas, whereas couples will prefer tiny apartments in the heart of a vibrant city. A house in the countryside may appeal to a specific type of guest who enjoys outdoor activities or who travels with their dogs. It’s natural to want to see what else is out there and see if there is a gap in the market that isn’t being filled in your area.
Furnishing and Decorating the Property
With the self-catering holiday cottage industry growing increasingly competitive, customers are becoming significantly more picky about where they stay. Furnishings and décor are crucial in making your villas Bali appealing to visitors. It is recommended that you equip and furnish your vacation cottage to the best possible standard. Investing in high-quality products that increase comfort and enhance the guest experience pays off.
Extra Features You Should Include in the Property
Adding extra features to your Bali holiday villas can help you increase your booking rate dramatically. Adding a few extra conveniences could result in a significant rise in sales. Gardens, wifi, off-road parking, a dishwasher, and a high chair are the top five most requested home characteristics, according to our research. Some of the most popular property in Bali are luxury, pet-friendly, three-bedroom home which suits for families. Also, sdding a hot tub to your vacation rental might boost occupancy by up to 14%. So, definitely plan out your your extra features if you want to attract more holiday makers.
Calculating Tax for the Villas Bali
The first step is to familiarize yourself with the legalities and determine which form of vacation rental business you qualify for. A 10% tax must be paid to the government when purchasing or selling a property in Bali. This tax is usually split 50/50, leaving the buyer and seller with a 5% tax apiece. Unless you are an Indonesian citizen, do not have an Indonesian tax identity, or have not been in Indonesia for more than 180 days, you must pay income tax on all bookings/transactions when you rent out your home.
Planning Permission for the Business
Foreigners are prohibited from owning land in Indonesia under Indonesian law. The law wants to make sure that only Indonesian citizen can have the right to own a villa. If you are a foreigner that want to buy a private villa in Bali and rent it out, you need some workaround. One of of the most popular method is sign a leasehold agreement. This give you the right to lease the property (land + private villa) for a long length of time (20-30 years) with the opportunity to extend the lease. This typically includes foreign purchasers who want to live and rent in Bali.
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Setting Up the Pricing
In order to maximize profit and maintain acceptable occupancy levels throughout the year, you’ll need to devise a pricing strategy for your holiday rental. Having an inflated price will certainly discourage people from reserving, but charging too little will hurt your profits. A variety of contributing elements will have an impact on your ability to charge. Pricing is determined by the value, size, and location of your vacation home, as well as the number of visitors you can accommodate. It’s crucial to think about the present demand in your area, as well as what comparable houses are charging. Offering special low-season rates, last-minute bookings, and short breaks will all help you book more rooms and make more money.
