Bali investment ROI: What It Really Delivers

There's a number you'll see everywhere when shopping for a Bali investment property. Sometimes it's 90% occupancy. Sometimes it's "15–25% net ROI." Often it's both, sitting side by side in a glossy brochure or a developer deck, radiating confidence.Here's what that number doesn't tell you.

Where the 80% comes from?

Let's be fair to developers first. That 80-90% occupancy figure isn't invented out of thin air. It's what a well-run villa in a strong location, managed by a top-tier management company, in peak market conditions, can realistically achieve.

To hit that number, you need the right property, in the right area, with excellent photography, a well-reviewed listing history, responsive management, and a guest experience that earns repeat bookings and strong ratings. Strip any one of those elements and the number slides.

What developers present is the ceiling, dressed up as the average. It's not malicious, they're selling a project and need to get eyeballs. But the buyer bears the cost of the gap between that ceiling and what actually happens.

The costs that don't make the brochure

This is where things get concrete. When you operate a short-term rental villa in Bali, your revenue gets cut  significantly  before a single dollar reaches your pocket.

Here's what you're actually paying:

• Management company fee: Typically 15–20% of gross revenue. This is for the company that handles bookings, guest communication, check-ins, and day-to-day operations. You need them. Don't plan around not having them.
• OTA fees (Airbnb, Booking.com, etc.): Around 10–15% depending on the platform and your listing structure.
• Utilities and maintenance: Pool chemicals, water, electricity, AC, routine repairs — budget around 10% of revenue, could be higher for older properties.
• Taxes: Indonesian income tax on rental income, plus regional "city tax" charged per occupied night. Together these typically run 10%+ depending on your structure.

Add those up and you're routinely looking at 45–50% of gross revenue disappearing before you count it as yours. 

How we run the numbers

When we take on a property for investment analysis, we don't start with what the developer says. We start with AirDNA, a market analytics platform connected directly to the major OTAs, and isolate the specific micro-area around the property. 

We filter to comparable properties (similar bedroom count, visual property type, amenities) and pull real averages for revenue, occupancy, and ADR (average daily rate), across high and low bands.

That data then goes into our own proprietary financial model, which accounts for:

• A first-year revenue penalty — new rentals don't hit the ground running. Reviews take time to build. Expect 5–15% lower performance in year one.
• Annual inflation applied to daily rates and expenses
• Occupancy fluctuation (±15%) to model realistic variability year to year
• Market growth dynamics using an S-curve model rather than a straight-line projection
• All operational costs itemized: management, utilities, OTA fees, taxes, notary/legal fees

The output is a scenario analysis: worst case, average case, best case, not a single optimistic number. You can read more about how this calculator works here. All this on top of our own perception and experience of the market which helps to discretionally validate or reject a projection.

Monthly and Yearly Rentals

Short-term rental isn't the only path, and for many investors it's not even the best one.

Monthly rentals in Bali come with far less operational overhead. No OTA fees, lower management costs, no city tax per night. 

Your net after expenses runs closer to 25–35% of gross disappearing rather than 50%. Yearly rentals are even leaner: 20–30% in costs, and almost no management headache.

The tradeoff is lower gross income. But depending on the property and your appetite for involvement, a monthly or yearly rental strategy can deliver comparable net yields with considerably less complexity. We explore this tradeoff in more detail in this article on long-term vs short-term rental strategy.

The Investor who didn't want honesty

Three years ago, we spent two months working with an investor: calls, viewings, analysis, the full process. We found him the right property and presented our projections. He wasn't happy with the numbers. In his view, they were too conservative. He wanted the 20%+ story, and we weren't telling it.

He walked. Went to another company that gave him what he wanted to hear.

This year, we ran into him at a café in Canggu (hence why I am writing this article). 

He wanted to know if we could help him sell the villa he'd bought. He is getting a 9% net yield. The property had the least ideal orientation, in a “meh” location the management company was underperforming, and the projections he'd been sold were built on assumptions that didn't survive contact with reality.

We're not telling this story to score points. We're telling it because it's the most common story in Bali real estate investment, and almost nobody in this market has any incentive to tell it out loud including us.

Why we say this

We work with fewer clients than most agencies. We close fewer deals. That's a deliberate choice.

The investor who understands what they're buying, who has seen both the upside and the downside modelled honestly, who asks hard questions and gets straight answers, that investor becomes a long-term partner. They come back. They send people.

The investor who bought a dream and got reality tends to disappear, sometimes after a painful few years and an urgent need to sell.

Bali real estate is a genuinely good investment when it's done right. 

The island's fundamentals, tourism growth, limited buildable land, rising demand remain strong. The market data supports a measured optimism. But "done right" means understanding what you're actually buying, not what a sales deck says you're buying.

The only guarantees in life, as someone once said, are death and taxes. Everything else is a projection. Make sure yours is an honest one.

Interested in seeing a real financial projection on a specific property? Explore our current listings or get in touch with our team — we run independent yield reports on every investment property we represent.