What are the risks of buying real estate in Bali?

When you know what the risks are and take them into account, a real estate investment in Bali can be a fantastic way to generate returns.

There are purchase consultants who assist with buying real estate in Bali. These parties charge a fee on the purchase, often 1.5%. However, this is not their only revenue model. When they refer clients to real estate agents or developers, they receive another 2.5% or even 5%. This is not communicated openly, and it may be that they primarily push projects that provide them with the highest commission. Even Dutch purchase consultants in Bali are guilty of this. Always think for yourself and use your own knowledge when making decisions.

In the Netherlands, this is seen as a interest/" title="conflict of interest">conflict of interest and is against the Wft law. In Indonesia, there are no laws regarding this.

Real estate agents in Bali are very helpful. Just keep in mind that they receive money from the purchase, often 5% of the purchase price. There is nothing inherently wrong with this. However, a real estate agent's main goal is to sell. Educate yourself on what is important when buying real estate in Bali, so that you can make the decision yourself. Don't rely solely on the sales pitch from the agent. Use your own judgment.

The zoning plan is the most important thing to check when purchasing real estate. If a villa or apartment is built on agricultural land, it may even be the case that the building must be torn down if the zoning plan cannot be changed. Projects are offered that are located on agricultural land. Even “large” developers are guilty of this. So, be alert and always do due diligence with your own notary or lawyer when making a purchase.

Unfortunately, there are cases of fraud. I would like to emphasize that this information is provided so you are aware of the risks and how you can protect yourself from them. A real estate investment in Bali is a fantastic way to generate returns.

Real Estate Agents Asking for a Deposit: There have been cases where real estate agents ask for a deposit without any contract in return. It is often said that this is to ensure the buyer is serious. Never do this! A deposit in itself is not a problem, but make sure to sign a reservation agreement and ensure that you have a copy of the identity card of the person you are transferring the money to. Make sure this person is the owner. Never transfer money directly to the agent. Agents can disappear and return to their own island. The police in Bali cannot help with fraud involving Indonesians from other islands, even if you have their identity card.