You have a number of choices and option has its own pros and cons. The following sections outlines recommendations and suggestions you might consider before making your purchase decision.

Existing Standalone villa

The major advantage of buying an existing villa is that you see what you get. You can evaluate the existing house against your needs and expectations. From its liveability, aesthetic and design qualities, to its potential rental returns; you can make an informed choice on what is already in place or what may need to be upgraded. If it has already been successful on the rental market, you will enjoy almost immediate rental demand and return on your investment.

A villa with a rental history is simpler to evaluate for costs and actual earning potential than and a new villa. A newly built villa can take several years of careful management and marketing stewardship before it starts to achieve true return potential.

Prospective purchasers need to review a property's rental characteristics and history carefully. Staffing is a signficant consideration. For example, if the property was only occupied occasionally by the previous owners, or offered for rental once in a while, you may find that the staff's service standards have fallen to an unacceptably low level.

At any given time there are distinctive and really attractive villas and houses on the market.  At the same time, there are also a large number that have failed to meet NelBali's high standards. We believe many older villas fall below a minimum standard of construction or design; or require more renovationsthan what they are worth purchasing for. 

Construction materials and techniques have significantly improved in Bali. Many villas built five years or more ago do not compare with those built more recently. We do not reject an older villa out-of hand; however, we urge a prospective customer to commission a comprehensive construction survey before committing to purchase an older style villa.

Finally, don't be misled into thinking the only properties available for sale are those you see listed on the internet or featured in real estate company's display windows. There are always a number of extremely desirable, top-end villas that are discretely offered for sale by personal introduction only. NelBali has a number of such properties and encourages our clients to ask us about them. 

Buy within an estate, existing or off-plan

Many villas are part of estate developments, rather than stand-alone properties. This means they are one of a number of other villas which share certain facilities and services. Services might include room service, restaurants, car parking, security, housekeeping, maintenance, and recreational amenities such as tennis courts, spas, and beach clubs.

Established estates are popular with many purchasers. Their operational management companies are experienced and service and financial histories are well-established. In addition, operational costs that are paid for by the purchaser on a periodic basis, are lower because of the economies of scale afforded by shared services. This helps to increase a given villa's rental yield.

An experienced, effective management company can add significantly to the purchaser's return on investment (ROI) through proven marketing structure to attract paying guests to the estate. On the other hand, if the estate management company is not effective, you are restricting your rental potential. Even if you have the freedom to rent out on your own or with other management companies, rental agents generally do not want to market only one villa within an estate, as they lose repeat business by guests booking through the estate directly.

A buyer can also purchaase 'off-the-plan'. This means buying a property from the architect's plans, artist's impressions, or by viewing a 'show villa.' There are a number of advantages to buying off-the-plan. These include being able to take advantage of lower prices which developers quote in the early stages of a development, and that your payments can be spread over the period of construction.

However there are some potential pitfalls you should be aware of and guard yourself against. You need to be satisfied that the developer is reputable and experienced, and has a history of successful completion of similar projects in Bali. You also need to determine who owns the land and what security you have. Reputable developers will own the land themselves and your deposit and subsequent payments will be secured against the land.

Payments will be tied to certain stages of construction so you must ensure an independent, third party project manager confirms each stage of construction has actually been completed satisfactorily before you make progress payments.

Buy land and build your own villa

It is always worth considering buying land and building your own villa. However, this choice comes with costs not found in other options. The main advantage of building yourself is that you get more flexibility in location and design. By finding your ideal piece of land – cliff-top, beachfront, on the edge of a dramatic gorge, or overlooking rice fields – your dream home will have the setting you desire.

Buying land in Bali can be a relatively straightforward process if you deal with a reputable real estate agent and legal advisor. The most important thing is to obtain unbiased, professional third-party advice from a notary who is not connected to the vendor. The notary will check title, building regulations and other matters to ensure the property is as represented by the vendor. When the time comes to draft a purchase agreement, you will also need to engage an independent legal/financial advisor to ensure your interests are fully protected.

Building yourself gives you a very high degree of design freedom, allowing you to create the environment you want to live in and enjoy. You're not buying someone else's idea of the perfect villa. While there is some bureaucracy in relation to obtaining building permits, just like everywhere in the world, once zoning is clear, building by-laws in Bali confine themselves mainly to limitations on height.

Designing and constructing a villa, even with the best specialists in their fields can be a laborious process. It is our experience the average three-bedroom villa takes 18 – 24 months from initial surveys through to completion. Unless you are on the island for the duration of the construction, you will find the pace of building slowed by a succession of small decisions which the contractors will expect you to make. If you are absent, work may grind to a halt, or worse, expensive mistakes may be made. To avoid this problem, you will need a competent project manager.

When you build and construct your own villa you will need to hire the following specialists – architect, structural engineer, electrical engineer, and a contractor. For larger villas you may also need a quantity surveyor, landscape architect, interior decorator, among many others. Just remember, each one of these comes at a cost.

Buy land purely for investment purposes

Owning and trading in undeveloped land in Bali is attractive for many reasons. Land values, in a historically cash market have never suffered from the housing bubbles witnessed in more economically advanced countries. Also, annual land taxes are generally very low compared to other countries. Taxes on transactions are also very reasonable.

Purchasing vacant land requires a keen understanding of the importance of location, development trends, and local conditions. Beachfront and cliff-top land are always winners, as are high-demand districts such as Canggu and Berawa. The coastal side of the main roads running from the south along both the east and west coasts is always more valuable than the other side. However, finding desirable freehold property is becoming increasingly difficult close to the tourist nexus of the south.

Buying land has its own considerations that require the assistance and guidance of an experienced and transparent advisor. For example, there are swathes of Green Belt or 'prohibited development land' which can be sold but not built on; individual communities have certain customary rules about building near temples; family-held land might have multiple titles; some family members might want to sell while others might not.

NELbali Property urges you to make use of professional and reliable legal advisors and notaries who can help you through any prepurchase due diligence process.