What rental yield and ROI does a Bali villa really make?

A Bali villa's rental yield is the most misquoted number in the market. Almost every figure you are shown is gross: a year of bookings divided by the price. It is not wrong arithmetic. It is just not a return.

Here is the real answer, every deduction between the advertised figure and your bank account, a worked example you can check line by line, and the two things that change the result more than any nightly rate: the lease and the licence.

The short answer

And on a leasehold, one more line: the yearly cost of the term. On a USD 300,000 villa with 25 years, that is about USD 12,000 a year before anything else.

Gross vs net yield: where the money goes

Everything between the booking and your account, in the order it leaves:

Platform commission. Airbnb's host-only fee sits around 15.5 percent, charged on top of management. Other channels take a similar cut.

PB1, the 10 percent regional accommodation tax. Collected from the guest and paid to the regency. Projections often show it as revenue. It was never yours.

Management: 12 to 25 percent depending on the tier, and up to 35 percent for full service with staff. Check whether it is charged on gross bookings or on what is left after commission. On a busy villa the difference is thousands a year.

Staff, utilities, pool and garden. A fixed monthly base that does not fall when the villa is empty.

Maintenance and replacements. Humidity, salt air and sun shorten the life of everything. Pumps, air conditioning, timber, fabric.

A capital reserve. Furniture, soft goods, paint, pool equipment and air conditioning need replacing on roughly a five-year cycle. Provision it every year, or take the whole hit in one year that looks like a loss.

Insurance. Building, contents and liability.

Income tax. For a resident individual, rental income is taxed at a 10 percent final rate. Check how your own home country taxes it too. See rental income tax.

The lease. Not a cash cost, an economic one, and on a short lease the largest item of all.

Put together, running costs take 40 to 50 percent of gross on a short-term rental villa before income tax. The full list is in the cost of owning a villa in Bali.

A worked example you can check

A two-bedroom villa bought for USD 300,000 on a 25-year lease, renting at USD 150 a night with 65 percent occupancy across the whole year:

Same villa, same bookings. Three very different numbers, and only the last one describes what happens to your money over the lease. That is why the extension clause and the remaining term matter more than the nightly rate.

What changes the result most

Net yield before the lease, on the same USD 300,000 villa, using the same costs:

Two lessons. First, rate and occupancy decide most of the outcome, and both depend on the villa, the street, the photos and the manager more than on the area. Second, ten points of occupancy you assumed but do not get takes about one point off your yield. Assume less than the seller does.

The lease: the cost nobody puts in the projection

Every title a foreigner can hold runs for a fixed term. When a lease ends, the land and the building generally go back to the landowner.

A guaranteed, priced extension reduces this a lot. A clause that only gives you a "priority" to extend at a price set later does not. See leasehold vs freehold in Bali for the difference.

The licence: whether the income can exist at all

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.

The listing rule. Under Permenpar No. 6/2025, every accommodation on Airbnb, Booking.com and the rest needed a verified business number (NIB) with the correct classification by 31 March 2026. The Ministry of Tourism has been auditing listings with Badung and Gianyar, and missing licences, environmental permits or land-use approvals get listings pulled.

There are two lawful ways to run a villa as a rental:

• The lease route. You lease the land in your own name. The plot needs its zoning approval (PKKPR), the building needs its PBG and SLF, and the homestay licence (Pondok Wisata) is held by the Indonesian landowner, not by you. A management company operates the rental and pays the income out. No company of your own is needed.
• The company route. A PT PMA holding HGB, with its own villa licence. Full control, more cost and compliance. On 22 July 2026 Bali closed the villa and homestay classifications to new foreign-owned companies. Existing licensed companies are not cancelled, but a new project on this route must be structured carefully. See the KBLI closure.

Enforcement is real. Satellite mapping is used to find planning violations, mostly in Canggu and Ubud, and properties with clean zoning, PBG and SLF now sell at a premium over ones without. A closed villa still has all its fixed costs and no income, which is the worst position this asset can be in.

How to price it: if the licence is missing or does not transfer, value the villa on land plus depreciated building, with the rental income at zero until a lawful path is verified and costed. Income you cannot lawfully earn is not income.

Guaranteed returns

Treat any "guaranteed 12 percent ROI" scheme as a claim that needs proof. The guarantee is only as good as the company behind it, those companies are usually thinly capitalised, and the guarantee period tends to end exactly when the building starts needing capital spending. Ask for audited occupancy on units that already exist. If the answer is a brochure, you have your answer.

How to read any projection

Ask four questions before you believe a number:

1. Is it gross or net? If they say net, ask which costs are included. Most "net" figures still leave out the reserve and the lease.

2. What occupancy does it assume, across the whole year? Peak-season occupancy applied to twelve months describes a year that does not exist.

3. Is the lease counted? If not, the figure cannot be compared with a freehold return anywhere else.

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

Then ask for the last twelve months of real statements from a genuinely similar villa: same area, same bedrooms, same age. Put them in the ROI calculator, add your own vacancy and every cost above, and decide on that number.

Most projections are not invented. They are real numbers arranged optimistically: the high-season rate across twelve months, the area's average occupancy instead of a new listing's, the headline management fee without the extras, and no reserve because the refurbishment is five years away and the projection covers three. Each choice is defensible. Stacked, they produce a number that has never happened.

Where yields are strongest

Nightly rates are highest on the Uluwatu clifftop and in Canggu. Occupancy is steadiest in Sanur and in the walkable parts of Canggu. Once vacancy, management and maintenance come off, the real yield is often closer between areas than the marketing suggests, and the property and its manager matter more. See the best areas to invest in Bali, occupancy and seasonality, how bedroom count changes income and break-even occupancy.

If nightly rental is not possible on a plot, long-term rental is the usual fallback, with lower income and much lower costs. See long-term vs short-term rental.

Questions to ask before you buy

• Is there a licence, and does it cover this building at this address?
• Is the NIB active on the government OSS system, not suspended or revoked?
• Does the registered activity honestly describe how the villa is run?
• Does the licence transfer with the sale, or does it belong to a company that is not part of the deal?
• Do PBG and SLF exist for the building the licence covers?
• What did the villa actually earn in the last twelve months, in statements, not projections?
• How many years are left on the lease, and is the extension guaranteed and priced?

For the wider picture, including structure, budget and exit, read the Bali property investment guide.