Long-Term vs Short-Term Rental in Bali: The Real Numbers

Nightly rate is the number everyone quotes. It is also the least useful one. A villa in Canggu asking $214 a night and a villa on a yearly lease at IDR 20 million a month are not really competing on price — they are competing on how many nights get paid for, who pays the electricity, and how much of the gross survives the trip to your account.

Here is what each actually looks like once you follow the money to the bottom.

The occupancy problem

Short-term letting only works if the calendar fills. Across the twelve months to July 2026, platform data for Canggu put average occupancy at 36.2% on an average daily rate of $214 — a RevPAR of about $77. Ubud sat at 36.6%. Indonesia’s own statistics office puts non-star accommodation occupancy across Bali at 37.20% for May 2026, arrived at by an entirely different method.

Agencies will show you 65% to 78%. Both sets of figures are honest. The platform average counts every listing on the island, including part-time hosts and owner-blocked nights. The agency figures describe well-located, well-run, well-photographed villas.

The important thing is what sits underneath the average. In Ubud, the median listing earns $762 a month while the top ten percent clear $4,168. This is not a market with a comfortable middle. It is a market where the top third does very well and the rest quietly subsidise the story.

What short-term letting costs to run

On a professionally managed standalone villa, expect 45% to 58% of gross to disappear before tax:

• Management: 15–22% of gross

• Platform commission: around 15%

• Cleaning and turnover: ~6%

• Guest supplies, payment processing, channel tools: ~7%

• Maintenance reserve: ~5%

One change worth noting now: from 15 September 2026, Airbnb moves Indonesian hosts to a single host-only service fee of 15.5%. The guest-side fee disappears at the same time, so nightly rates need to move up by about 15% to hold your net constant. Anyone still modelling a 3% host fee is modelling last year.

What a yearly tenant looks like

A solid two- or three-bedroom pool villa in Canggu or Pererenan lets on a yearly basis at roughly IDR 20–35 million a month, and Pererenan tends to sit 15–25% under Canggu on rent for equivalent stock. The gross is obviously smaller.

Three things then happen that no yield table shows.

The tenant pays utilities, pool service and garden. On a short-let villa those are yours, and guests run air conditioning as if it were free, because to them it is.

The rent arrives upfront. Bali custom is twelve months paid in full before move-in. No receivables, no void nights, no seasonality, no low-season February. A two-year commitment usually buys the tenant a further 15–20% discount, which is worth taking or refusing on cash-flow grounds rather than reflex.

And the wear slows down. A short-let villa turns over roughly every five nights. Repainting comes round every two to three years, bathrooms and kitchens every five to seven, and outdoor and pool-adjacent items harder still. One household living in the same villa for two years does a fraction of that damage.

The comparison, in plain numbers

A two-bedroom Canggu villa, run both ways. Short-let gross of IDR 500 million corresponds to roughly 60% occupancy at prevailing rates; the yearly figure is the bottom of the range above.

The short-let villa grosses more than twice as much and takes home less. The running-cost line is the reason: on a yearly lease the tenant pays the electricity, the pool and the garden, which on this villa is IDR 50 million a year of difference before anyone touches a commission.

First-year compliance and setup adds to the gap — IDR 59–161 million short-term against IDR 9–22.5 million long-term.

On this model the two strategies cross at a gross of about IDR 525 million, or roughly 63% occupancy. Published modelling puts the break-even at 65–70%, which is close enough to be the same finding.

Set that against a measured island average near 37%, and the conclusion is not that short-letting is a bad business. It is that short-letting is a business, with a threshold, and the villas that clear it are run by people who treat it as one.

How to choose

Choose short-term if the villa is genuinely in the top tier — location, design, photography, a manager with a direct-booking channel — and you want the upside and can absorb the variance. Push the same villa to 75% occupancy and better rates, and the gross moves toward IDR 750 million — on the stack above, a net near IDR 165 million, three times the yearly tenant. That is the prize, and it is real.

Choose long-term if you want a year’s income on day one, a villa that ages slowly, and a business that does not need managing. It is the strategy that looks worse in the brochure and better in the accounts, right up until you clear 65% occupancy.

Most owners we build for end up doing one for a few years and the other later. The mistake is not picking wrong. It is picking short-term, hitting 40%, and calling it a market problem.