How much should you actually pay for a Bali villa?

Work backwards from the return you need. The price that makes a deal work is often well below the asking price.

Most buyers start from the asking price and ask whether the yield is acceptable. Reverse it: start from the return you require and calculate what price delivers it.

That number is your ceiling. Everything above it is someone else's margin.

The method

1. Establish realistic revenue. Achievable nightly rate at honest full-year occupancy. Not the seller's figure, the area's.

2. Subtract every cost. Platform commission, the 10% regional tax, management, staff and running costs, refurbishment reserve, income tax.

3. Decide the return you need. For an illiquid foreign asset with legal and currency risk, wanting 8–10% net is not greedy. It is priced for the risk you are taking.

4. Divide. Net profit ÷ required return = the maximum total capital that works.

5. Subtract everything that is not the purchase price. Transaction costs around 7%, furniture and setup, any build or renovation. What remains is the most you can pay.

The calculator does steps 1 to 4, adjust the price until the net yield reaches your number.

On a lease, add the step everyone skips

A leasehold consumes its premium. To compare it honestly against a freehold, either:

Require a higher net yield to compensate for the asset ending, or
Use the return after amortisation as your decision figure

A 20-year lease and a 40-year lease at the same price are not the same purchase. The shorter one needs roughly double the annual return to stand level.

What justifies paying more

Genuinely scarce zoning where supply is constrained
A long remaining term or a strong, priced extension right
Full permits already in place, PBG and SLF issued, not pending
An operator classification that lawfully covers nightly rental
Land in a corridor with a concrete infrastructure catalyst

What justifies paying less, or walking

Missing PBG or SLF, where legalisation takes 8–12 months and may not be possible
Short remaining lease term
Zoning that does not permit the intended use
Any structure relying on a nominee arrangement
A projection that only works above 70% occupancy

The negotiating position this gives you

"Your asking price implies a 2% net return once amortisation is included. I need 8%. Here is the working." That is a specific, checkable argument.

Sellers discount for a reason, not for a feeling. Bring arithmetic and you will find out quickly whether there is room.