How to Invest in Bali Property Market in 2026

Bali closed 2025 with a record breaking milestone: 7 million international arrivals. If you are considering Bali property in 2026, you are looking at a market that has proven resilience, consistent tourism demand, and clear regulatory pathways for foreign investments. 

The opportunity exists, but the details matter. Understanding how the deals are structured where to invest, and what returns to expect separates profitable investments from expensive mistakes. 

At thebalihomes.com, we work with foreign buyers and investors who need clarity on the process from start to finish, and this article breaks down exactly what you need to know before committing capital to Bali real estate in 2026.

Why Bali remains a compelling investment in 2026

The fundamentals driving Bali's property market have not changed, but they have strengthened.

Tourism growth continues to outpace supply in key rental markets. The digital nomad economy has matured into a stable renter demographic that fills mid term vacancies. 

Infrastructure development in areas like Pererenan, Seseh, and Cemagi is creating new pockets of investment opportunity where land is still priced below Canggu and Seminyak levels but accessibility is improving rapidly.

• Tourism momentum: 7 million arrivals in 2025 signals that Bali has not only recovered from pandemic disruptions but exceeded pre pandemic volumes. This translates directly into rental demand for short stay villas, particularly in coastal zones where proximity to beaches, surf breaks, and lifestyle amenities drives occupancy.
• Expat and remote worker demand: Long term rentals targeting expats, retirees, and remote professionals are seeing near full occupancy in established neighborhoods. Monthly rental income from this segment is lower per unit than short term rentals, but operational complexity drops significantly and tenant turnover is minimal
• Capital appreciation potential: Property values in areas like Uluwatu, Canggu, and the emerging northwest coast continue to climb as land availability decreases and development accelerates. Investors who bought in Canggu five years ago are seeing appreciation rates that outperform many traditional markets, and the same trajectory is now visible in Pererenan, Seseh, and Cemagi as infrastructure catches up with demand.

For a deeper look at the structural reasons behind Bali's investment appeal, see why investing in Bali makes sense 

Hottest investment locations in 2026

Location determines both rental performance and capital appreciation potential. Bali's property market is not uniform. 

Different regions attract different tenant demographics, offer different rental yields, and present different risk profiles.

• ‍Canggu: Still the anchor location for short term rental investment. Good occupancy, strong nightly rates, and established demand from surf tourism and digital nomad communities. Competition is intense and land prices have climbed significantly, but Canggu remains the benchmark for liquidity.‍
• Uluwatu: Premium rental market with higher average daily rates and a clientele willing to pay for ocean views, clifftop settings, and proximity to world class surf breaks. Development is more controlled than Canggu, and land availability is limited, which supports capital appreciation but also increases entry costs.‍
• Pererenan: The next frontier west of Canggu. Infrastructure improvements, new villa developments, and growing retail and dining options are pulling demand into Pererenan. Land prices are slightly lower than Canggu but rising fast as investors recognize the proximity advantage and lifestyle appeal.
• ‍Seseh and Cemagi: Emerging zones further northwest where land remains semi-affordable and development is accelerating. These areas appeal to investors targeting capital appreciation over immediate rental yield. Infrastructure is improving, but these locations are not yet plug and play for short term rental operations. They suit buyers willing to hold for medium term appreciation or develop unique properties that differentiate from the saturated Canggu market.

See also How capital appreciation happens in Bali with leasehold villas

Expected returns: what the data shows for 2026

Return projections depend on rental model, property type, and operational efficiency. The two dominant models are short term villa rentals and long term residential leases, and each produces different financial outcomes.

Read also: Investment strategies in Bali

Short term rental yields

Villas marketed through Airbnb, Booking.com, and direct channels remain the choice for investors seeking maximum revenue, though they require significant operational involvement.

• Net Rental Yields: 10% to 15% annually after operational costs.
• Operational Expenses: Typically consume 35% to 55% of gross revenue.
• Cost Breakdown: Property management fees (15% to 25%), maintenance fund and utilities (5% to 10%), taxes (+-10%)
• Occupancy: Peaks of 80% to 90% in high season, averaging 65% to 75% annually.

Long term rental yields

Monthly and yearly rentals to expats, remote workers, and retirees offer a more stable approach. While the gross income is generally lower than short-term lets, the consistency of income is higher.

• Net Rental Yields: 8% to 11% annually.
• Operational Expenses: Costs generally range between 15% to 25%.
• Occupancy: High consistency, ranging from 80% to 99%.
• Stability: Tenant turnover is low and vacancy risk is minimal in desirable neighborhoods, suiting investors who prefer stable cash flow over maximum yield.

Capital appreciation

Property values in high-demand areas continue to show robust growth.

• Growth Rate: 3% to 5% annual appreciation over the past five years.
• High Demand: Land scarcity in Canggu and Uluwatu supports continued price increases.
• Emerging Areas: Locations like Seseh and Cemagi offer higher appreciation potential but come with higher risk due to less proven demand.

Property ownership structures for foreign investors

Indonesian law restricts direct freehold ownership by foreigners, but two legal structures allow foreign investors to control property: leasehold agreements and PT PMA entities.

Understanding the difference is critical because each structure affects liquidity, tax treatment, and long term control.

• Leasehold ownership: A leasehold contract grants the right to use a property for a defined period, typically 25 to 30 years with renewal options. Leasehold is the most common structure for foreign villa buyers because it requires lower upfront capital, involves simpler legal processes, and allows faster deal execution. The lease itself is a registered asset that can be sold and subleased.
• Freehold through PT PMA: Foreigners can acquire freehold property by establishing a PT PMA, a foreign investment company registered under Indonesian law. The PT PMA owns the land under an HGB title, which provides up to 80 years of ownership (best solution for large scale developers, hotels or for long term investment horizons)

Both structures are legally sound when executed correctly. The choice depends on investment timeline, capital availability, and operational preferences.

Read also: Leasehold vs freehold in Bali

The investment process: what to expect step by step

Buying property in Bali follows a defined process, but the timeline and requirements differ depending on whether you are purchasing leasehold rights or structuring a freehold acquisition through a PT PMA.

• Step one: identify the property to get the deal started: Once you have identified a property you like to acquire, after negotiating price and terms you will be asked to sign a memorandum of understanding (MOU), the document will outline the general terms and conditions of the deal. Upon signature you will place a deposit (generally around 10% of total purchase value). The deposit is refundable in case an irregularity is found in the property documentation during due diligence (step 2).
• Step two: due diligence: During due diligence all property documentation will be reviewed, from land zoning, land certificate, tax history, construction permits and so on. In case of missing or invalid documentation your deposit will be sent back to you and the deal canceled. In case due diligence is successful you can move to the next phase. 
• Step three: execute contracts and arrange payment: Contracts are prepared by a notary and signed by all parties. Once the contract is signed you and the seller will follow the terms and conditions outlined in it (payment terms, delivery time, various terms and conditions)

Read also: Learn the process to purchase leasehold properties in Bali

Payments

Here is where practical transaction mechanics become important. Indonesian property contracts report prices in IDR, so foreign buyers need to convert and transfer funds. It is important to note that unless you already have funds in IDR you are most likely to encounter fees for converting between currencies.

You have at least three options for moving money into Indonesia: 

• Open a local bank account and transfer funds directly in your currency and convert them, 
• Your bank's international wire service and accept their conversion rates,
• Online money transfer service like Wise which typically offers better exchange rates and lower fees than traditional banks (in our experience the most straightforward and reliable solution). 

Final considerations before committing capital

Bali offers measurable returns, proven demand, and clear legal pathways for foreign ownership, but success depends on execution. 

Investors who understand zoning, structure deals correctly, choose locations based on data rather than marketing hype, and budget realistically for operational costs consistently outperform those who skip due diligence or chase yield without understanding the mechanics.

The market in 2026 favors informed buyers. 

Record tourism numbers confirm demand. Infrastructure development is opening new locations. Legal structures are well established. What separates profitable investments from underperforming assets is the discipline to verify land titles, calculate true net yields after all expenses, and align property type with your investment goals.

If you are exploring Bali real estate and want a team that handles the details from start to finish, reach out to us at thebalihomes.com

Read also: Cheklist for choosing a real estate agency to work with in Bali