Bali Villa Rental Yields: What Lies Behind Promises of 10–15% a Year

New estimates of villa rental yields in Bali are significantly more modest than the figures promised by developers and property sellers. Instead of the advertised 10–15% per year, the median projected yield is 7–8% even in the island's most profitable areas, according to Brixfox. At the same time, analytics platforms differ sharply in their estimates of tourist accommodation occupancy, raising questions about the reliability of investment forecasts.

What the Brixfox Estimates Show

In October 2026, The Bali Times published a ranking of villa rental yields in Bali compiled by Brixfox. The study covered 6,212 property-for-sale listings in Bali and Lombok. It assessed potential returns, not verified earnings reported by property owners.

Villa Rental Yields and Occupancy in Bali

Note: Brixfox data come from a study published in October 2026; AirROI figures cover the 12 months through September 2026. The methodologies and samples differ.

Bingin had the highest median estimated net yield, at 7.7% a year. The asking price of a villa was $259,000, with projected occupancy of 71%.

In Uluwatu, the estimated yield was 7.3%, with a villa priced at $272,000 and projected occupancy of 71%. AirROI, however, recorded occupancy of 50.6% of available nights over the 12 months through September 2026. Its sample comprised 99 active listings.

In Canggu, the median villa price was $300,000, with an estimated yield of 6% and projected occupancy of 68%. AirROI put booked nights at 38.1% across 3,827 listings over the same 12-month period. Average annual revenue per property fell by 15.6% compared with the previous annual period. AirROI's figures cover different types of tourist accommodation.

Differences in sample composition help explain the discrepancy. Brixfox estimates potential income from villas offered for sale using data on comparable properties, while AirROI analyzes active Airbnb listings in different categories. The Brixfox model accounts for seasonality, property upkeep, management fees and local taxes, but excludes borrowing costs and the investor's tax obligations outside Indonesia. Advertised returns of 10–15% a year may be quoted before expenses, whereas the study estimates net yields. Comparing these figures does not establish whether owners' actual profits have changed.

Villa Rentals in Bali: Competition and Costs

Growth in supply also affects the rental business. According to AirDNA figures cited in International Investment's Bali real estate market review, the number of short-term rental properties rose by 27% between the first quarter of 2023 and the first quarter of 2024, while bookings increased by 12%. By mid-2024, there were more than 33,000 active listings, up 24.6% from a year earlier. These figures describe an earlier period, not the whole of 2026.

In autumn 2026, the Indonesian Hotel and Restaurant Association (PHRI) drew attention to numerous hotels and villas being offered for sale. Industry representatives cited low occupancy at some properties and management difficulties among the possible reasons. The listings do not prove widespread losses across the market, but they point to problems facing some owners.

Rental revenue is reduced by booking-platform commissions, staff salaries, cleaning, pool maintenance, utility bills and repairs. A property management company is another expense. According to International Investment, its services may cost 15–20% of gross rental revenue—the money received from guests before expenses. Brixfox already includes management fees in its calculations, so the published yield should not be reduced by another 15–20%.

At an unchanged nightly rate, a decline in occupancy from 70% to 60% cuts revenue by roughly 14.3%. Profit may fall more sharply because maintenance costs and some wages must be paid regardless of the number of guests. A financial forecast should account for months of weak demand and unexpected repairs rather than relying solely on peak-season results.

Tax liabilities depend on how the villa is rented out. In Indonesia, a 10% levy on gross payments applies to land and building rentals, but not to tourist accommodation services. Certain payments to non-residents are subject to a standard 20% withholding rate, which may be modified by tax treaties. There is no single income-tax rate applicable to every villa owner.

Leasehold in Bali: How the Term Affects Returns

According to Brixfox, 72–95% of villas offered for sale in the ten areas with the highest projected yields are marketed on a leasehold basis. Investors obtain the right to use a property for a contractual term, typically around 25 years, rather than permanent ownership of the land. Indonesian land-ownership restrictions prevent foreign nationals from acquiring land under Hak Milik, a form of freehold title reserved for Indonesian citizens.

In its study of Bali leasehold terms, DOMA examined 2,502 listings in September 2026. The median lease term was 26 years, while 49% of offers provided for no more than 25 years. If someone acquires a 25-year lease and sells it ten years later, the next buyer will have just 15 years remaining. That affects the pool of potential buyers and the resale price.

Offers advertised as '25 + 25 years' also require scrutiny. The additional term often indicates an option to extend, not an obligation for the landowner to renew the lease on the same conditions. The agreement should specify the price or pricing formula, the lease commencement date and the right to transfer it to another party.

A limited term also changes the financial arithmetic. Suppose an investor pays $250,000 and receives $19,250 a year in net operating cash flow. Annual receipts equal 7.7% of the purchase price. If the right expires after 25 years without compensation and annual cash flow remains unchanged, the time-adjusted return is approximately 5.8% a year. This is an illustrative calculation that excludes inflation, financing and additional investment.

The Bali Times notes that the Brixfox ranking does not account for the declining value of a leasehold as its term runs down. The platform itself says that its forecasts limit projected cash flows to the years remaining on a lease. These are not equivalent: an annual operating yield should not be mistaken for the total investment return, including recovery of the initial capital.

Illegal Villas in Bali: Bingin and PARQ Ubud

In July 2025, Badung Regency authorities reported the demolition of 48 unauthorized structures near Bingin Beach, including villas and other tourist properties. The administration said the buildings stood on state-owned land and violated land-use rules. The decision did not apply to every property in the area, but it shows why attractive yield projections do not guarantee legal security for investors.

Another case was the closure of PARQ Ubud in January 2025. Gianyar Regency authorities shut down the complex for violating local regulations. During the investigation involving PARQ Ubud, police named a company executive as a suspect in a case concerning the unlawful use of agricultural land. The reports did not establish investors' eventual financial losses, but a closed property cannot generate the expected income from guest accommodation.

The scale of the issue is reflected in figures on unlicensed tourist accommodation in Bali reported by International Investment in June 2026. The Tourism Ministry identified around 1,600 listings without the required permits on online platforms. Owners were given until August 1 to regularize their documents and warned that non-compliant listings could be removed. The published information did not specify how many properties were ultimately taken off booking platforms.

What to Check Before Buying a Villa in Bali

Buying a property under construction adds another risk: its rental yield is entirely projected. Delays in completion postpone rental income, while the leasehold term may begin before the building is finished. In that case, part of the paid lease period expires before the first booking.

For a completed villa, a full year of documented rental receipts, records of expenses and tax payments, and the terms of the management agreement matter more than an advertised percentage. Buyers should also verify permitted land use, construction documents, licensing for tourist accommodation, the lease expiry date and the renewal procedure.

International Investment analysts note that a ranking of locations is no substitute for assessing a specific property. High projected returns matter only when rental income can be verified, the property is legally operated and the terms of an eventual sale are clear. Without these safeguards, an asset that looks profitable on paper may prove difficult to rent out or resell.

Frequently Asked Questions About Bali Villa Rental Yields

What annual returns can villas in Bali generate?

According to Brixfox's October 2026 estimates, median projected net yields are 7.7% in Bingin, 7.3% in Uluwatu and 6% in Canggu. These are estimates, not guaranteed profits for owners.

Why do occupancy estimates for Bali villas vary?

Analytics services use different samples and methods. Brixfox models occupancy for villas offered for sale, while AirROI analyzes active Airbnb listings. Results also depend on location, property category and the period under review.

What expenses reduce rental yields on Bali villas?

Booking-platform commissions, property management, staffing, cleaning, utility bills and repairs. Professional management may cost 15–20% of gross revenue. When comparing forecasts, check whether these expenses have already been included.

What does leasehold mean when buying a villa in Bali?

Leasehold gives the buyer the right to use a property for a specified term, often around 25 years. Extension options, renewal costs and resale conditions depend on the contract. Expiry without renewal can reduce the overall investment return.

Can foreign nationals buy villas in Bali?

Foreign nationals cannot hold Hak Milik freehold title to land. Other legally recognized arrangements are available, including long-term leases. Buyers should verify the land's legal status and the rights they will receive.

Which documents should be checked before investing in a Bali villa?

Land rights, construction and tourist-rental permits, the lease agreement, management terms, and documented income and expenses. For a property under construction, the completion schedule and lease commencement date are also important.