Why is the Bali yield you were quoted wrong?

An advertised Bali yield is almost always gross: annual revenue divided by purchase price. It is not wrong arithmetic. It is just not a return.

Here is the full distance between that number and what you keep.

The deductions, in order

Platform commission: 15–20%. Airbnb, Booking.com and the rest take theirs before anything reaches you.

PB1: 10%. The regional accommodation tax, collected from the guest and remitted by the operator. Frequently presented as revenue in projections. It has never been yours.

Management: 15–25%. Charged on gross or on net after commission, depending on the contract. The difference is thousands a year.

Running costs. Staff, utilities, pool, garden, maintenance, supplies. A fixed monthly base that does not fall when the villa is empty.

Refurbishment reserve: around 5%. A rental villa needs refitting every few years. If it is not in the projection, it is coming out of your pocket instead.

Income tax. On whatever profit survives the above.

Lease amortisation. On a time-limited right, the premium divided by the years remaining. Not a cash cost, an economic one, and the largest single item on a short lease.

What that does to a headline

On a USD 300,000 leasehold villa at USD 180 a night and 65% occupancy:

Same property. Same revenue. Three very different numbers, and only one of them describes what happens to your money.

How to read any projection

Ask four questions:

1. Is this gross or net? If they say net, ask which deductions are included, most "net" figures still omit refurbishment and amortisation.

2. What occupancy does it assume, across the full year?

3. Is the lease amortised? On a leasehold, if the answer is no, the figure is not comparable to a freehold return anywhere else in the world.

4. Is nightly rental legally permitted on this plot, by this operator? If not, the projection describes a business that cannot run.

Then put the seller's own numbers into the calculator and compare.

A projection is a marketing document. It is not a forecast, and it carries no obligation on anyone.

The gap, line by line

Take a villa marketed at a gross yield. Here is what stands between that number and your bank account.

Gross yield counts none of these. It divides revenue by price and stops. That is not a return, it is a starting point.

Where projections mislead without lying

Most Bali yield projections are not fabricated. They are constructed from real numbers arranged optimistically.

The peak-season nightly rate applied across twelve months. Occupancy quoted as the platform average for the area rather than for a new listing with no reviews. Management fee stated as the headline percentage with the separately billed items omitted. No sinking fund at all, because the refurbishment is five years away and the projection covers three.

Each assumption is defensible on its own. Stacked, they produce a number that has never happened.

Rebuild it yourself

Ask for the last twelve months of actual statements from a genuinely comparable property: same area, same bedroom count, same age. Not a projection, not an average, actual statements.

Then apply your own vacancy assumption, add every cost above, and provision the sinking fund. The number you get is the one to make a decision on.

Why the sinking fund matters most

Tropical humidity, salt air and intense sun shorten the life of everything. Furniture, soft goods, paint, pool equipment and air conditioning all need replacing on roughly a five-year cycle if the property is to keep competing.

Owners who did not provision for it take the hit in a single year, and that year looks like a loss. Owners who did simply have a slightly lower yield every year and no surprises. The second version is the honest number.