What yield does a Bali villa actually produce?

The advertised number and the real one

Island-wide, occupancy averages around 64–66% with an ADR near USD 90–95. A typical two-bedroom villa grosses roughly USD 20,000–22,700 a year.

Prime, well-managed villas reach 70–85% occupancy. Generic Canggu stock tracks 38–55%, and supply grew around 29% in 2025, which is compressing rates.

Operating costs consume 40–50% of gross on a short-term rental villa.

Where the gross goes

• Management: 12–25% of revenue depending on tier. Full-service including staff can reach 35%.
• OTA commission: Airbnb's host-only fee sits around 15.5% since October 2025. Charged separately, on top of management.
• Staff: villa staff, pool, garden. Continuous, not seasonal.
• Utilities, maintenance, replacements, and a sinking fund you will need whether or not you budgeted one.
• Tax: 10% final for a resident individual, plus 10% PB1 regional accommodation tax.

Run that through and 8–15% gross becomes 4–6% net on average stock, 8–13% on genuinely prime and well-run.

Leasehold amortisation

The number almost nobody subtracts. If you paid USD 300,000 for a 25-year lease, you are consuming USD 12,000 of capital every year. A "7% net yield" on that villa is not 7%.

Freehold-equivalent structures appreciate. A lease runs down. Both can be good investments, but only one of them can be modelled as if the asset still exists at the end.

Licensing, which is now the binding constraint

To rent legally you need an NIB, a villa licence under KBLI 55193 via a PT PMA, plus PBG and SLF.

Pondok Wisata (KBLI 55130) is restricted to Indonesian citizens. It is not available to you, whatever an agent says.

Under UU 18/2025, every short-term rental listed on a booking platform must be licensed by 31 March 2026 or face delisting.

Guaranteed returns

Treat any "guaranteed 15% ROI" villa scheme as a claim requiring proof. The guarantee is only as good as the company behind it, those companies are typically thinly capitalised, and the guarantee period usually expires precisely when the building starts needing capital expenditure.

Ask for audited occupancy on existing units, not projections. If the answer is a brochure, you have your answer.

Underwrite on net, after tax, after management, after amortisation, at realistic occupancy rather than peak. If it still works, it is a real investment.

Licensing is a valuation input, not paperwork

A villa that can lawfully sell nights and a villa that cannot are different assets, and the gap between them is most of the price.

Yet rental licensing is routinely presented as an administrative step to be handled after purchase. It is not. It determines whether the income in the projection can legally exist.

What has changed

On 22 July 2026 Bali closed 18 low-risk business classifications to new PT PMA registration. Four of them were the codes this market was built on: villa, homestay, real estate and management consultancy.

The closure does not cancel existing licensed companies and it does not stop a foreigner holding land. It stops a new foreign-owned company registering those activities, which changes how any new project must be structured on the operating side.

The questions to ask before you buy

• Is there a licence, and does it cover this building at this address?
• Is the NIB active on OSS, not suspended or revoked?
• Have the codes migrated to KBLI 2025?
• Does the registered activity honestly describe how the property is actually run?
• Does the licence transfer with the sale, or does it belong to an entity that is not part of the deal?
• Do PBG and SLF exist for the building the licence supposedly covers?

That last pair matters more than buyers expect. An operating licence rests on a building that is lawfully approved and certified. Without PBG and SLF, the licence is exposed regardless of what the certificate says.

The enforcement position

Regional authorities can issue warnings, suspend operations and close premises directly. The financial damage is not the penalty, it is a property sitting closed while its fixed costs continue.

An owner in that position has a villa with a full cost base and no revenue, which is the worst configuration this asset can be in.

How to price it

If the licence is absent or non-transferable, the villa should be valued on land plus depreciated building, with the rental income treated as zero until the path to a lawful licence is verified and costed.

Sellers will argue the point. The argument to hold is simple: income you cannot lawfully earn is not income, and you are being asked to pay for it today.