Rental Property Bali
The property is entered through a teak door, which leads to a wide pathway. The buildings are surrounded by gardens with traditional Indonesian figurines, and there is a large barbecue pedestal near a rectangular swimming pool, which separates the two joglos.
The main building features a large open living area, a dining area with a table for eight, two bedrooms and a Western-style kitchen with modern appliances. The floors are teak; the hardwood furniture is included in the price. Each bedroom has its own bathroom with a stone bathtub and separate shower. and a stone sink. There is air-conditioning in the bedrooms, but the living areas have only fans, which is common for modern villas on Bali.
The second building serves as the master bedroom suite, with floor-to-ceiling windows facing the pool. The king-size bed is on a platform in the center, surrounded by a sitting area, an office, a walk-in closet and a bathroom.
A third structure on the property can serve as staff quarters, including a kitchen and laundry room. The property also has a license to operate as a bed-and-breakfast, Mr. Collins says.
Luxury home prices on Bali rose by 15 percent in 2014, making it the third-fastest growing upscale second-home market in the world, behind New York and Aspen, Colo., and tied with Istanbul, according to data tracked by the real estate firm Knight Frank. International interest is driving the market, spurred by the relatively low prices and widespread media attention, including exposure from the book “Eat, Pray, Love” and the 2010 movie version, property agents say.
In Ubud, foreigners account for as much as 50 percent of transactions, said Terje H. Nilsen, a principal in the Ray White Paradise Property Group, a Bali-based real estate company. “It’s really taking off, ” he said.
With no multiple listing service and little shared sales data, it is difficult to track real values, agents say. Prices for choice parcels near the center of Ubud have increased from 300 percent to 400 percent in five years, with some properties fetching as much as $1, 500 a square meter, or about $140 a square foot, Mr. Collins said.
“The market is without a doubt overheated, ” he said. “Prices are changing every three months.” Despite a construction boom, there is still a limited supply of homes that meet the standards of Western buyers, agents say.
Joglos have been particularly popular with international buyers. “They are still comparatively cheap to acquire and build out, as opposed to permanent concrete structures, ” Mr. Collins said.
But prices for joglos have skyrocketed in recent years, and the Java government has also moved to limit the export of the structures.
“Prices are high, because many have already been bought and brought to Bali, ” said Alejandra Cisneros, a designer based in Bali who has helped restore joglos. “And the Javanese are now not as willing to part with those joglos that are left.”
WHO BUYS IN UBUD
Far removed from the Bali beach-party scene, Ubud is famous as a haven for hippies, spiritualists and healers, who flock to the city seeking a healthy lifestyle as well as enlightenment. The streets are lined with meditation centers, yoga centers and organic restaurants.
Buyers typically range from bargain-hunting backpackers to the very wealthy, who seek the large villas that dot the hills and valleys around the city, Mr. Nilsen said. Australians are among the most active buyers, but Chinese and Korean buyers are becoming increasingly common, he said, and Indonesians have also become more active in recent years.
Traditionally, international buyers have bought homes in Ubud to start a new life on the island or as a second home. But in recent years, many of the foreign buyers have been focused on properties that can be used as short-term rentals for tourists.
“I probably meet a new person every other day who tells me he or she is moving to Bali and would like to build a little something with perhaps a rental property attached, ” Ms. Cisneros said.
Foreigners cannot directly own freehold land on Bali. For many years, international buyers commonly purchased land through “nominees, ” putting the title in the name of an Indonesian citizen or company. But recent comments by a government official signaled a move to crack down on the nominee deals, which have never been endorsed by law.
Nominee deals “are not allowed, ” said Devy Susanti, who works as a private Bali land deal officer, assisting buyers and sellers. She strongly urges international buyers to avoid the nominee process.
But there are alternatives. Property experts advise foreigners to use one of two systems for buying control of a property. Through one process, the land is transferred to government control and the buyer is given what is known as Hak Pakai, the right to use the property for up to 70 years. Another method is to arrange a long-term lease directly with the owner of the property.
“Long-term leasing is the best and safest way for foreigners to invest here in Bali at this time, ” Mr. Collins said.
Whatever the course, experts warn the process can be complex, with many potential hazards. A lawyer and notary can research the land certificate and other official documentation for the property.
“The land certificate is key, ” Ms. Susanti said.
It is also essential to research the ownership of the property, amid the complicated lineage of Balinese families. “You need to make sure you are dealing with the right owner, ” Ms. Susanti said. “Sometimes you are dealing with a member of the family who doesn’t have the right to lease it.”
LANGUAGES AND CURRENCIES
Indonesian and Balinese, but English is common; Indonesian Rupiah (Rp) (1 Rupiah = $0.000077)
TAXES AND FEES
Indonesia typically charges a 10 percent tax on freehold land transactions, based on the value of the land, which is usually split between the buyer and the seller. A foreigner acquiring this property through a long-term lease would likely pay a 5 percent buyer’s tax and a 1 percent notary fee, Mr. Collins said.