Purchaser's Check List for Buying a Villa in Bali

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Bali is fast becoming the premier destination in Asia for investing in a vacation Villas. But before you buy.we suggest you go through our check list.

Bali is fast becoming the premier destination in Asia for investing in a vacation Villas. Purchasing a new Villa in Bali can be an excellent investment as well as the perfect holiday escape. But before you buy we suggest you go through our check list

Does the developer have the requisite license to develop and operate a villa complex or hotel? In the main area of Bali (Badung Regency) there has been a moratorium since 2001, on the issuing of new licenses for hotel & Villa developments. Although you may apply to build a single family dwelling, for personal use, many developers are advertising their projects as “managed hotel or villa developments operating as 5 star resorts with high rental return potential .“ However, once built they may not be able to operate at all.

There is a push by Bali’s major hotel groups to have the government close unlicensed villa developments, since so many licensed hotels are seeing their profits being eroded by customers simply preferring to stay in private Villas, rather then a standard 5 star hotel room.

This is what is making Villa purchases such a good investment, provided you choose the right development.

Make sure the developer has applied for the following approval:

? PMA – Direct investment approval for foreign investment

? Ijin Lokasi – project location permits

? Ijin Princip – project approval

? AMDAL – environmental

? IMB – building Permit

If developer does not have these permits they are probably building under the guise of single family dwelling, which means they will not be able to legally operate the development as vacation rental, hotel or multi villa complexe and purchasers may find that once their villa has been built, it cannot be rented or used for generating income.

Unless developers were already in business prior to 2001 it is unlikely that they will have the requisite licenses and permits.

Editors Choice: Club 151 - Pt. Hanno Bali http://www.club151.net

Location, Location, Location

? Location – if your Villa is centrally located, near the beach and close to popular restaurants and night spots, it will be easiest to rent. You may initially pay more for a prime location, but with growing competition in the market this may make all the difference in the future. Check the standard and occupancy and nightly rates of nearby hotels, this may give a good indication of future rental potential.

Editors Recommendation: Oberoi Area of Seminyak.

Quality

? Quality – Don’t settle for second best, buying the best you can now will provide easy resale and a long life for your investment.

Amenities to look for

? Full Size Swimming Pool – don’t settle for a plunge pool

? Air Conditioned Living Areas – Bali gets hot and humid. Open air concepts are charming at first glance, but for maximizing rental income choose a Villa design that has living spaces which can be closed up and Air Conditioned.

? Restaurants – choose a villa located within walking distance or short drive

? Parking – Make sure there is ample parking

? Green Areas & Buildings - Single storey Villas have the greatest appeal. Two storey projects often lack green areas, privacy and the sun is not able to warm swimming pools.

? Number of Bedrooms - Choose a 2 or 3 Bedroom Villa as they are the most popular rentals. (Avoid 1 bedroom Villas)

Services to look for

? Management Service

? 24 hour Security

? Maintenance Service

? Maid Service

? Chauffeur Service

? Spa Services

Construction Check List

? Ground Termite Treatment before the slab is poured

? Deep Rock Foundations

? Steel reinforced Concrete to avoid future cracking and shifting

? Steel sprayed with anti-corrosion primer

? Floor Protected Rising Damp – Avoid concrete or Terrazzo floors. They age quickly and tend to crack. This makes for a considerable expense in the future.

? Insulated Wiring set in concrete to avoid fire

? Double thick Galvanized Water Pipes

? Double thick PVC Water Piping

? Back up Electric Generator

? Water Treatment - Water in Bali contains high levels of Calcium and Sulfur, without proper treatment your water will smell and your pipes will quickly clog.

? Sewage Treatment – Bali is starting to regulate sewage systems, to avoid future problems and expenses choose a development that has a proper sewage treatment plant. Septic tanks used in unlicensed developments tend to overflow during the rainy season and discharge directly into the surrounding areas.

? Bug & Rodent in Roofing - (grass roofs look great at first but quickly become home for insects and rodents and are a fire hazard – choose a conventional roofing system or if you must have a grass roof (alang alang) put on top a conventional roof and have a sprinkler system installed.

? Contractor – Make sure that the Developer is using a reputable contractor or better that they also own the construction company. Contractors make profits on the difference between what they bid for a project and what the project actually costs. With competitive bidding sometimes the only way contractors can make a profit is by cutting corners or shorting items like cement and steel reinforcing – which will affect the life of your investment.

Ownership

The law does not allow foreigners to own property in Bali. However, foreigners may legally lease property in their own name. Although there are ways to circumvent the law on owning freehold, our recommendation is to buy a leasehold villa in your own name. We suggest you choose a villa located in a prime area with high rental returns potential. If your Villa generates good income lease extensions become a non-issue and you will have avoided the pitfalls and complications of trying to own freehold outside of the law.

Leasehold Villas in prime areas pay for themselves in as little as 5 years.

Editors Recommendations:

Developer:

C-151

Pt. Hanno Bali

151 Jalan Oberoi

Seminyak, Bali

Tel: 62361 730306

Direct

Fax 62361730312

Email: info@club151.net

http://www.club151.net
http://www.hannobali.com

Estate Agent:

Colliers International

Suite 5701 Central Plaza

18 Harbour Road

Wanchai, Hong Kong

Tel        852 2828 9888

Fax     852 2918 1022

http://www.colliers.com/hongkong
http://www.colliersresidential.com

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