A headline return sounds impressive, but as an investor you want to know what remains at the bottom line. In this article we work through the full cost ladder, from rental income to the rental return after costs and the total return including value increase.
Start with the rental income
A well-positioned 2-bedroom villa in Canggu or Uluwatu typically generates between 30,000 and 50,000 dollars of rental income per year in 2025. At an occupancy rate of 70 to 90 percent, that is a solid starting point. But rental income is not a return: what counts is what remains after costs, and that depends entirely on how the property is managed.
What comes off
If you arrange everything yourself, the costs add up: property management, platform commissions for OTA channels such as Airbnb or Booking, maintenance, utilities, insurance and the local banjar contribution. In our own projects it works differently. Bali Estate Group charges one all-in management fee of 32 percent of the rental income, covering management and operations, utilities, insurance, staff, major maintenance and trend renovation. There are no separate property management costs on top of it. Only booking costs from platforms such as Booking or Airbnb are passed on separately and transparently at cost. Alongside the fee you pay an owners association contribution of 175 euros per month.
What remains
After the 32 percent fee and the owners association contribution, the rental return after costs in our projects lands between 9 and 13 percent of your investment, depending on occupancy. Together with the expected value increase of 3 percent per year, that brings the expected total return to 12 to 17 percent. The Indonesian PB1 tax of 10 percent on hospitality revenue is already deducted in the nightly rates we calculate with, so it does not come off again. One cost falls outside the fee: leasehold extension, at 6,000 euros for an apartment or the Golf View Private Pool (each extension 5 percent higher), 7,200 euros for a studio and 14,400 euros for a suite or two-bedroom apartment, every five years and only from year 5 through year 50. The payback period, calculated on the rental income and not on the value increase, sits between 8 and 10 years, against usually more than 20 years for a rented home in the Netherlands.
How we make this transparent
We record the expected position within our 12 to 17 percent range in writing per project before you commit. We then report each quarter what the rental income actually leaves after costs, and what the value increase adds on top. No surprises, but verifiable figures. For your own tax situation, always consult an adviser.
