December 2025-
When most people start looking at real estate in Bali, their first instinct is: “I want Freehold.”
It makes sense. In Europe, Australia, or the US, owning the land forever is the gold standard. Why would you “rent” land for 25 or 30 years when you could own it outright?
But here is the truth that many new investors miss: In Bali, “Forever” is expensive.
While you can buy Freehold (Hak Milik) in Bali—usually through a PT PMA company—it comes with a massive premium. And if your goal is pure Return on Investment (ROI), that premium can actually be a trap.
Here is why the smartest money in Bali is often flowing into Leasehold.
1. The ROI Math (Lower Entry, Higher Yield)
The math is simple. A Freehold property in a prime area like Pererenan might cost you double or triple the price of a Leasehold property on the exact same street.
However, the rental income you generate is precisely the same. A tourist on Airbnb doesn’t care if you own the land forever or for 25 years; they pay the same nightly rate.
- Scenario A (Freehold): You pay $500k. You net $40k/year. ROI = 8%.
- Scenario B (Leasehold): You pay $200k. You net $40k/year. ROI = 20%.
By insisting on Freehold, you are often killing your cash flow efficiency. Leasehold allows you to enter the market with less capital and recoup your initial investment much faster—often in 3 to 5 years.
2. The “Moving Target” Market
The landscape of Bali changes fast. It is booming, and the “hot spots” shift rapidly.
Ten years ago, nobody was investing in Canggu. Five years ago, nobody was looking at Seseh. High-yield areas right now might not be the “place to be” in 10 or 15 years.
Freehold marries you to a location forever. Leasehold gives you agility. The strategy for many savvy investors is to enter a high-growth area, ride the wave of popularity for 5-7 years, and then exit. You aren’t tied down to a location that might lose its “cool factor” in a decade.
3. The “Bali Weather” Reality
This is the point nobody talks about until they live here.
Bali has a brutal climate for buildings. The combination of intense tropical sun, high humidity, salt air, and heavy monsoon rains means that buildings degrade much faster here than in the West.
A villa in Bali generally requires a massive makeover—or even a rebuild—every 15 to 20 years.
So, ask yourself: Why are you paying a premium to own the land forever when the asset sitting on it (the villa) will need to be gutted in 15 years?
4. The “Flip and Roll” Strategy
Because demand in Bali is growing each year, the “Buy and Flip” method remains one of the best strategies available.
The play works like this:
- Buy a Leasehold off-plan at a reasonable price.
- Enjoy 15-20% ROI for 3-5 years.
- Enjoy capital appreciation as land values in the area spike.
- Sell the remaining lease.
Even with fewer years left on the lease, the rise in daily land prices often means you can sell for a profit. You then take that capital and roll it into the next emerging area (like Kedungu or the West).
The Verdict
Freehold has its place—usually for people who want a forever home to retire in.
But if you are an investor looking to maximise your capital, don’t get hung up on “owning it forever.” In a market as dynamic and tropical as Bali, Leasehold isn’t a compromise; it’s a financial tool that often outperforms the alternative.
Ready to run the numbers?
We can show you side-by-side comparisons of Freehold vs. Leasehold opportunities available right now, so you can see precisely how the ROI differs.
If you are interested and ready to invest, talk to us.