Usually not as advertised. A quoted 12% is normally a gross yield — the rent divided by the price, before any costs. After platforms, staff, utilities, tax and management, an illustrative example lands nearer 6%, and on a leasehold part of each payment is simply the buyer’s own money coming back before the land reverts. Illustrative — not financial advice.
What does the same villa look like, measured three ways?
| Measure | Illustrative example |
|---|---|
| Advertised gross yield (rent ÷ price) | 12.1% |
| Net after real operating costs | ~5.8% |
| Lease remaining | 28 years, counting down |
Per USD 100,000 of purchase price, a 12.1% gross yield means about USD 12,100 of rental income a year; about 5.8% net means roughly USD 5,800 actually reaches the owner. Illustrative — not financial advice.
Why is gross so different from net?
Because gross ignores the cost of running the villa. Take off booking platforms, on-site staff, utilities and upkeep, hospitality tax, and a management fee if someone runs it for you, and the headline roughly halves. See where villa income goes.
Why does a leasehold make it worse?
Because a lease runs out. Most foreign-held Bali villas are leasehold, and when the lease ends the land and building go back to the landowner. On a 28-year lease, part of every payment is the buyer’s own money returning — accountants call this amortisation — not profit.
To get USD 100,000 back over 28 years, about USD 3,600 a year (100,000 ÷ 28) has to be set against that capital. In the example above, that is most of the USD 5,800 net. See leasehold versus freehold. Illustrative — not financial advice.
What about the “guaranteed” returns some sellers offer?
Read them carefully: a fixed return for the first few years is often paid out of the sale price itself. See how to read a guaranteed return.
Is Bali a bad market, then?
No. The visitors and the long-term tenants are real. It is the reason a project should be built and delivered on real equity and properly structured capital, and judged on its net numbers — not sold on a headline one. See long-term rental demand.
Sources: Horwath HTL / C9 Hotelworks 2026 and area price guides; Ascendure illustrative worked example. General information about the Indonesian market, not legal, tax or financial advice.
The full method: The Financiable Project
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