When venturing into property investment in Bali, understanding the nuances of location selection will significantly impact your property’s success.
Bali’s allure is undeniable. If your goal, when searching for property or a villa in Bali for sale, is to maximise investment returns through rental revenue, then it’s clear that high demand regions such as Canggu, Nusa Dua, and Uluwatu are the best options.
However, there are many more factors to consider which will have a significant impact of the viability of your investment. This article aims to delve deeper and explore key locations considerations for property investment in Bali, featuring insights into successful developments such SOMOSHOTELS and Kiara Beachfront, as examples.
The Importance of Location in Property Investment
Location is paramount in real estate investment, influencing not just the potential rental returns but also the property’s appreciation over time. In Bali, where the market is as diverse as its landscape, selecting the right location goes beyond identifying the most popular spots. It involves a strategic analysis of various factors that contribute to the property’s success.
1. Tourism Hotspots and their Impact:
Properties in popular tourist destinations will typically see higher demand. Areas frequented by tourists offer better rental opportunities and significantly higher ROI than regions even a short distance away.
The difference in Average Daily Rates & Occupancy levels between two properties a few hundred metres apart can be staggering – let’s explore some reasons why…
2. Proximity to Beaches:
Given Bali’s reputation for stunning beaches, proximity to the coastline can significantly enhance a property’s rental appeal and value. With both the view & access to the beach to be considered.
A premium is placed on true beachfront & cliff-front properties as they attract the best returns, and due to their rarity and the limitations of available coastline land in key touristic areas, these properties often appreciate at a higher rate than their land-locked counterparts.
A property can still command high returns without being directly at the beachfront, but being with within walking distance should be a benchmark.
3. The Significance of ‘Eat Streets’:
Locations near dining and entertainment hubs are highly sought after. Properties that offer easy access to Bali’s vibrant ‘eat streets’, with the best restaurants, cafes, and shops, commands higher rents and attract more short-term visitors, boosting occupancy rates.
In key regions, these ‘Eat Streets’ often originate as main thoroughfares providing access to the beach. The high foot traffic attracts new restaurants, cafes, and shops, which in turn increases the street’s popularity.
Examples of these are Jl. Batu Balong in Canggu, Jl Pantai Berawa or Jl Raya Semat in Berawa, Jl. Kayu Aya in Seminyak, & Jl Labuansait/Jl Pantai Padang-Padang in Uluwatu.
4. Infrastructure and Accessibility:
Good road access, proximity to essential services, and the airport enhance a property’s appeal to both renters and buyers. These simple factors are often overlooked, since many developments are placed within alleyways (known as ‘gangs’ in Bali) or within a maze of alleyways. However, good accessibility and proximity to services significantly contribute to the convenience and overall experience of living in or visiting Bali, thereby affecting both rental yields and property values.
5. Understanding Development Plans and Regulations:
Being aware of neighbouring development plans and zoning regulations is vital. Some areas might be slated for future commercial development, which could potentially increase property values. Conversely, the slated development may also eliminate previous advantages such as access or views. This could limit the growth of your investment.
6. Assessing Market Saturation:
Market saturation is often overlooked. It’s essential to evaluate the level of competition in your chosen location. An area with an excess of existing or upcoming rental properties, such as villas or villa complexes, may lead to lower occupancy rates and reduced rental yields in the future.
Identifying niches, unique selling points, or similar high-performing property types can help maximize your investment results. Being part of a hotel, or a serviced branded residence with hotel amenities like room service, concierge, restaurant, gym, and spa will differentiate your property from others in the market.
Hotels and Branded Services Residences are currently seeing a 30% increase in both Average Daily Rate (ADR) and Revenue per Available Room (RevPar) in 2023 compared to pre-pandemic 2019 levels, according to a recent report by Howarth HTL.
This incredible rebound speaks volumes about the buoyancy of hotel and serviced-residence properties.
SOMOSHOTELS, located on the bustling ‘eat street’ of Bingin in Uluwatu, exemplifies strategic location selection. The property occupies 12,000 sqm with 230 meters of commercial frontage on Jl. Labuansait, a main thoroughfare and popular dining destination in Uluwatu, frequented by some of the island’s top restaurants and cafes.
As the first city-style hotel in the region, SOMOSHOTELS boasts 250 rooms, 6 retail venues, 2 restaurants, a pool club, co-working space, a creative content studio, gym, spa, and event space, and offers entertainment options like bowling, karaoke, and mini-golf.
Each room in SOMOSHOTELS is offered as an investment property, providing a completely passive income for owners. The hotel features full amenities and professional operations, distinguishing it as a unique real estate investment opportunity in the market.
The area’s emerging status, combined with its vibrant dining scene & stunning natural beauty, positions SOMOSHOTELS to capitalize on increasing Average Daily Rates (ADR) and property values, appealing to a demographic seeking both relaxation and entertainment, and maximizing returns for owners.
Kiara Beachfront in Nusa Dua boasts a prime location directly on the beachfront, complete with a pool and restaurant by the sea, and positioned along the main road—a distinctive feature in the area.
This unique placement maximizes its potential for rental returns and future property value growth. As a serviced residence, Kiara Beachfront offers full resort-like services and amenities, including multiple restaurants, a gym, and two swimming pools, specifically catering to guests who value exclusivity and differentiating itself from other offerings in the area.
This property is an attractive option for investors seeking beachfront properties with high earning potential. It provides fully passive investment opportunities with professional rental management, and offers flexibility for residential or mixed-use based on the needs of the owners.
The region of Tanjung Benoa in Nusa Dua has experienced the second-highest growth in demand in 2023 compared to 2019, trailing only behind another region in Bali, according to a recent report by Howarth HTL.
The Art of Location Selection
Investing in Bali’s property market demands a nuanced understanding of location selection. By considering factors such as proximity to tourism hotspots, beaches, ‘eat streets,’ infrastructure, development plans, and market saturation, investors can make well-informed decisions that align with their investment goals.
Projects by Mirah Investment & Development, such as SOMOSHOTELS and Kiara Beachfront, exemplify the impact of strategic location selection on enhancing investment returns. For those eager to explore Bali’s property market, contact us today for expert insights and guidance to help you achieve your real estate investment goals.
About Mirah Investment & Development
As Bali’s leading property developer , Mirah Investment & Development are well established as the market leader with years of experience in bringing luxury developments to the most sought-after locations across the Indonesian archipelago. An extensive in-house team of locals and expatriates offer end-to-end services from architecture and design to professional property management as well as legal, taxation and immigration support.
