What a Bali Villa Actually Returns
Investing
4 minutes
August 18, 2026
Every villa sold in Bali comes with a yield number attached. Most of them are gross, most of them assume 80% occupancy, and most of them are calculated by the person selling the villa.
None of that makes them dishonest. Gross yield is a real figure. It is just not the figure that reaches you.
The gap between gross and net
The reliable rule across published 2026 analysis is that net sits five to eight percentage points below gross — or, put more bluntly, roughly half of it. One market study puts it plainly: advertised returns overstate actual returns by 30 to 50%.
A worked example that appears in the data: a villa bought for $250,000 generating $38,000 a year is a headline 15.2% gross. After management at 15%, platform commission, staff, utilities, maintenance, insurance and the 10% rental income tax, the same villa nets 7.9%.
That is still a good return. It is simply half the number on the brochure, and the half that pays your mortgage is the second one.
Where the money goes
On a professionally managed short-let villa, 45–58% of gross never becomes income:
Management commission, 15–22%
Platform commission, around 15% (Airbnb moves Indonesian hosts to a flat 15.5% host-only fee on 15 September 2026)
Cleaning and turnover, roughly 6%
Guest supplies, payment processing, channel management, around 7%
Maintenance reserve, around 5%
Two details worth knowing before you sign a management agreement. Maintenance is commonly rebilled at 15–20% over cost, cleaning at 10–15%, guest supplies at 20–30% over wholesale. And a fee that looks unusually low — under 13% — is usually recovering the difference somewhere in that list. Ask to see the markup policy in writing, not the headline percentage.
Tax, which is charged on gross
Rental income tax for an Indonesian tax resident is 10% final on gross rent. For a non-resident it is 20% withholding, often reduced by treaty.
The word doing the work is gross. The tax is calculated on rent received, not profit made. A villa can have a bad year, cover none of its costs, and still owe tax. Budget it as a cost of revenue, not a share of profit.
What returns look like by area
Published net-yield ranges for 2026, short-term let and professionally managed:
Area | Net (short-let) | Net (yearly let) |
|---|---|---|
Canggu / Berawa | 10–12% | 9–11% |
Uluwatu / Bingin | 10–12% | 8–10% |
Pererenan / Seseh | 9–12% | 8–10% |
Seminyak | 8–11% | 8–10% |
Ubud | 8–10% | 7–9% |
Read those as what a professionally managed, well-located villa achieves, not as an area average — the same source puts self-managed villas at 4–6% net, and the worked example above at 7.9%. The spread between those figures is management and location, not luck.
Notice how thin the premium is. One to two points for a business that requires a manager, a compliance file, a cleaning team and a calendar you watch. That premium is real, but it is not the four or five points most people assume they are buying.
And the management fee, incidentally, is not the cost of laziness. It is usually the whole distance between 8–15% net and 4–6%.
The distribution matters more than the average
Bali villa income does not follow a normal distribution. In Ubud, the median listing earns $762 a month and the top decile earns $4,168. In Canggu, average occupancy sits around 36–41% while the top ten percent of listings run above 80% and the bottom tier below 20%.
So the honest question is not “what does a Bali villa return.” It is “what does a villa like this one, in this location, run by this operator, return.” A market average is a useful reality check and a useless forecast.
Two guardrails when you read a projection:
Never accept market-average occupancy paired with top-decile nightly rates. They do not occur in the same building.
Ask what the villa did last year, not what it should do next year. For a completed villa, the operator has the figures. If they will not show them, that is the answer.
Payback, and a convention worth questioning
At a genuine 8–10% net on a well-run villa, capital comes back in ten to twelve years.
You will hear a different figure. The conventional leasehold strategy in Bali is described as recovering your investment within six to eight years, so the remaining lease years are profit. Do the arithmetic on that: six years requires a 16.7% net yield, eight years requires 12.5%. Both sit above the top of every published net range in this guide.
That does not make the convention useless. It describes what the best-performing villas in the best locations actually do, and it is the right target. But if you are buying a 25-year lease on the assumption that the standard eight-year payback applies to you, you are assuming top-decile performance as a baseline. Model ten to twelve years, and treat anything faster as the upside it is.
What we tell people
A villa that nets 8% honestly is a better asset than one that projects 15% and delivers 5%, because the first can be planned around. Build the model on 50% occupancy, current tax, real management fees and a maintenance reserve of 5–10% of rental revenue. If it still works, you have a business. If it only works at 80% occupancy, you have a hope.
Every villa sold in Bali comes with a yield number attached. Most of them are gross, most of them assume 80% occupancy, and most of them are calculated by the person selling the villa.
None of that makes them dishonest. Gross yield is a real figure. It is just not the figure that reaches you.
The gap between gross and net
The reliable rule across published 2026 analysis is that net sits five to eight percentage points below gross — or, put more bluntly, roughly half of it. One market study puts it plainly: advertised returns overstate actual returns by 30 to 50%.
A worked example that appears in the data: a villa bought for $250,000 generating $38,000 a year is a headline 15.2% gross. After management at 15%, platform commission, staff, utilities, maintenance, insurance and the 10% rental income tax, the same villa nets 7.9%.
That is still a good return. It is simply half the number on the brochure, and the half that pays your mortgage is the second one.
Where the money goes
On a professionally managed short-let villa, 45–58% of gross never becomes income:
Management commission, 15–22%
Platform commission, around 15% (Airbnb moves Indonesian hosts to a flat 15.5% host-only fee on 15 September 2026)
Cleaning and turnover, roughly 6%
Guest supplies, payment processing, channel management, around 7%
Maintenance reserve, around 5%
Two details worth knowing before you sign a management agreement. Maintenance is commonly rebilled at 15–20% over cost, cleaning at 10–15%, guest supplies at 20–30% over wholesale. And a fee that looks unusually low — under 13% — is usually recovering the difference somewhere in that list. Ask to see the markup policy in writing, not the headline percentage.
Tax, which is charged on gross
Rental income tax for an Indonesian tax resident is 10% final on gross rent. For a non-resident it is 20% withholding, often reduced by treaty.
The word doing the work is gross. The tax is calculated on rent received, not profit made. A villa can have a bad year, cover none of its costs, and still owe tax. Budget it as a cost of revenue, not a share of profit.
What returns look like by area
Published net-yield ranges for 2026, short-term let and professionally managed:
Area | Net (short-let) | Net (yearly let) |
|---|---|---|
Canggu / Berawa | 10–12% | 9–11% |
Uluwatu / Bingin | 10–12% | 8–10% |
Pererenan / Seseh | 9–12% | 8–10% |
Seminyak | 8–11% | 8–10% |
Ubud | 8–10% | 7–9% |
Read those as what a professionally managed, well-located villa achieves, not as an area average — the same source puts self-managed villas at 4–6% net, and the worked example above at 7.9%. The spread between those figures is management and location, not luck.
Notice how thin the premium is. One to two points for a business that requires a manager, a compliance file, a cleaning team and a calendar you watch. That premium is real, but it is not the four or five points most people assume they are buying.
And the management fee, incidentally, is not the cost of laziness. It is usually the whole distance between 8–15% net and 4–6%.
The distribution matters more than the average
Bali villa income does not follow a normal distribution. In Ubud, the median listing earns $762 a month and the top decile earns $4,168. In Canggu, average occupancy sits around 36–41% while the top ten percent of listings run above 80% and the bottom tier below 20%.
So the honest question is not “what does a Bali villa return.” It is “what does a villa like this one, in this location, run by this operator, return.” A market average is a useful reality check and a useless forecast.
Two guardrails when you read a projection:
Never accept market-average occupancy paired with top-decile nightly rates. They do not occur in the same building.
Ask what the villa did last year, not what it should do next year. For a completed villa, the operator has the figures. If they will not show them, that is the answer.
Payback, and a convention worth questioning
At a genuine 8–10% net on a well-run villa, capital comes back in ten to twelve years.
You will hear a different figure. The conventional leasehold strategy in Bali is described as recovering your investment within six to eight years, so the remaining lease years are profit. Do the arithmetic on that: six years requires a 16.7% net yield, eight years requires 12.5%. Both sit above the top of every published net range in this guide.
That does not make the convention useless. It describes what the best-performing villas in the best locations actually do, and it is the right target. But if you are buying a 25-year lease on the assumption that the standard eight-year payback applies to you, you are assuming top-decile performance as a baseline. Model ten to twelve years, and treat anything faster as the upside it is.
What we tell people
A villa that nets 8% honestly is a better asset than one that projects 15% and delivers 5%, because the first can be planned around. Build the model on 50% occupancy, current tax, real management fees and a maintenance reserve of 5–10% of rental revenue. If it still works, you have a business. If it only works at 80% occupancy, you have a hope.
Akura
Akura Villas
