Airbnb Villas Bali: How Foreigners Can Legally Rent Them Out

How Foreigners Can Legally Rent Out an Airbnb Villas in Bali

  • InCorp Editorial Team
  • 27 June 2024
  • 6 minutes reading time

Airbnb Villas Bali has seen a significant rise, driven by the island’s thriving tourism industry over the past decade.

Before the global pandemic in 2019, Bali welcomed over 6 million foreign visitors, and it remained resilient, with over 5 million foreign visitors in 2023 despite recent challenges.

This shift in tourist preferences reflects a growing desire among travelers for immersive and authentic local experiences. Traditional hotels and guesthouses now face increasing competition from spacious and private Airbnb Villas Bali.

Is Bali Airbnb A Profitable Business?

Bali’s tourism industry thrives year-round, attracting millions of visitors seeking paradise. This robust sector fuels a stable real estate market, with properties experiencing consistent growth between 1-4% from 2014 to 2019.

This stability creates a compelling opportunity for investors considering Airbnb rentals in Bali. You can generate a rental income by leveraging the island’s popularity while benefiting from potential property value appreciation.

With a well-maintained and strategically marketed Airbnb villa, you can capitalize on Bali’s flourishing tourism scene and establish a profitable business venture in this captivating destination.

How Much is It to Rent A Villa in Bali?

The price of renting a villa in Bali varies significantly depending on several factors. Airbnb Bali private pool villas with luxurious escapes and oceanfront views can cost upwards of IDR 70,000,000 (approximately USD 5,000) per night. Charming one-bedroom options can start around IDR 3,500,000 (approximately USD 250) per night.

Location, amenities, and season all impact rental prices. Factors such as desired features, travel dates, and budget also affect estimates.

Why Should You Invest in Bali Villas?

Bali beckons tourists and savvy investors seeking a slice of its thriving tourism pie. Investing in luxury villas Bali presents a compelling opportunity and unlock many potential benefits. Here’s why:

  • High Demand: Millions of visitors visit Bali annually, fueling a strong rental market for unique villas.
  • Appreciating Assets: Bali’s property history shows consistent growth, offering potential long-term returns.
  • Premium Experiences: Spacious villas with private amenities attract high-paying tourists.
  • Year-Round Appeal: Bali’s consistent climate ensures reliable income throughout the year.

Yes, Airbnb is legal in Bali, but hosts and guests must understand and adhere to local laws governing short-term rentals.

Regulations can vary significantly across different areas of Bali, so acquiring the necessary licenses and complying with specific requirements is crucial to ensuring a smooth and lawful Airbnb experience on the island.

Can Foreigners Rent Out Airbnb Villas?

Though renting out an Airbnb villa in Bali seems to be one of the most common business activities among foreigners, you must be clear that villa rental in Bali is not included in the Indonesian Positive Investment List (PIL).

How Foreigners Can Legally Rent Out an Airbnb Villas in Bali

The growth of Airbnb Bali villas is a no-brainer: Bali has been experiencing a rapid economic transformation due to the tourism boom over the past decade.

While most visitors stay in regular hotels and guesthouses, many have gradually opted for private Airbnb Villas Bali, which promise a more authentic local experience and a serene environment.

Moreover, because Airbnb Villas Bali has ample space, many foreigners use them as venues for other activities such as weddings, birthday parties, or simply as holiday accommodations for more prominent family and friends.

Therefore, managing Airbnb Villa Bali is something that you need to consider for your business venture.

What Licenses Do You Need to Rent Out Airbnb Villas?

When you consider starting a villa business in Bali, you will need two important licenses/permits: an accommodation license and a building license (Izin Mendirikan Bangunan—IMB).

Accommodation License

There are two types of accommodation licenses, depending on the type of housing and the number of rooms: homestay licenses and hotel licenses.

If you have an Airbnb Villa Bali with 3 to 5 rooms, you will need a homestay or Pondok Wisata license. If you have a property with more than five rooms, you will need a full hotel license, known as a Melati license.

It is worth noting that obtaining a hotel license is challenging due to the stringent requirements set out by the Indonesian government.

Building License

In addition to the accommodation license, a building license or IMB is necessary. Holding an IMB means that you are permitted to build a property for your Airbnb Villa Bali rental.

Read more: Top Picks Of Leasehold And Freehold In Bali Properties

How Do You Manage Your Airbnb in Bali?

Managing an Airbnb villa in Bali involves a series of essential tasks that villa owners must handle to ensure smooth operations and profitability. These tasks typically include:

Listing and Overseeing Your Property

With the rise of Airbnb management in Bali, listing and overseeing properties have become more streamlined. Many property owners in popular areas like Seminyak, Uluwatu, Canggu, and Ubud are turning to Airbnb as a lucrative long-term investment.

Understanding Local Regulations

Familiarizing yourself with the local laws and regulations governing Airbnb in Bali is crucial. For example, areas like Canggu may favor long-term rentals and restrict short-term ones, whereas Seminyak and Uluwatu are more accommodating to shorter stays.

Obtaining the Necessary Licenses

Depending on the type of accommodation, acquiring specific licenses such as Pondok Wisata is essential. These licenses vary from operational licenses for small accommodations like homestays to principal licenses for larger establishments.

Maintaining Cleanliness

Regular cleaning of the property is necessary before new guests arrive. Find a reliable cleaning service or maid who can also handle necessary repairs.

Guest Communication

Prompt and effective communication with both potential and current guests is crucial. Responding to inquiries and promptly addressing guest concerns can significantly enhance the guest experience and overall satisfaction.

Read more: 4 Tips For Maximizing ROI For Your Bali Property

Should You Outsource Airbnb Management in Bali?

Using a company for Airbnb management in Bali brings several advantages, such as:

Expertise in local laws and regulations

Experts in navigating local laws and regulations, ensuring full compliance for your property.

Operational Efficiency

Property management firms also provide efficient services such as guest communication, bookings, maintenance, and staff training.

This comprehensive approach ensures high occupancy rates and positive guest reviews and relieves property owners from day-to-day operational burdens.

Enhanced Market Presence

Furthermore, Airbnb management companies possess extensive market knowledge and can optimize property listings to attract potential guests and achieve high search result rankings.

Outsourcing these responsibilities provides property owners with a hassle-free rental experience, allowing them to reap the rewards of their investment without being overwhelmed by operational details.

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InCorp Can Help You with Your Airbnb Business in Bali

The rise of Airbnb villas presents a thrilling opportunity to generate a healthy income stream. The consistent demand from tourists and Bali’s stable real estate market makes investing in a villa a strategic move with potential for long-term returns.

However, navigating the legalities and intricacies of establishing an Airbnb business in Indonesia can be daunting. That’s where InCorp Indonesia steps in. Here’s how we can help:

Focus on maximizing your income and enjoying Bali. Let InCorp handle the rest. Fill out the form below to unlock your Bali Airbnb success story.

David Susandi

Branch Manager – Bali Office at InCorp Indonesia

Holding 11 years of experience in various roles, including project manager, operational manager, and corporate strategist, David Susandi is a prominent figure for many entrepreneurial organizations expanding in Indonesia.

Get in touch with us.

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Frequent Asked Questions

When a foreigner or their heir move to another country and have not stayed in Indonesia within one year, they must relinquish or transfer ownership rights to someone that meets Indonesian land or property ownership requirements in Indonesia.

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.