How to buy land in Bali, from location to contract

If you're thinking about buying land in Bali as an investment, there are a few things you should know first.

In this blog post, we'll broadly outline the step-by-step process of land investment in Bali so that you can make the most informed decision possible and get you started with the right foot.

 From finding the right property to defining the legal process and more, read on for everything you need to know about buying investing land in Bali.

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Finding the right land

Independently by the fact that your intent is to buy land with the sole purpose of flipping it with a quick trade or generate yield by creating your rental business and then subletting your contract to boost your ROI, or whatever other strategy you have in mind, it doesn’t matter.

Location is everything! Think about it, you can get a lot of discounted land in many areas around Bali, but how many of those are or will be in great demand in the future? 

Sure! It can happen that you “struck gold” with either a very smart move or a lucky one but it’s better to not let anything to be decided by chance or faith.

When it comes to buying land in Bali it is very important that you take your time to research, usually by physically getting there, the areas you are most interested in and investigate them properly.

You can start by asking yourself some simple questions like:

• How many developments are happening at the moment in that area?
• How far is it from the main roads? 
• What points of interest are to be found nearby?
• What are rent prices like? 

…And why not, sometimes, just a little bit of networking with fellow investors can be beneficial. They might drop some good or bad insight that you can always verify and use to your advantage.

Bali is a small island with many different areas, each with its own unique character and potential. 

Make sure you do your research before investing in any of it or get assistance from real estate professionals who can help you identify and plan your investment here in Bali.

Steps to buying  land in Bali

Assuming you have found your desired plot of land in Bali, these are the key steps and to-do’s in order to finalize the purchase:

1. On site visit and negotiation

It's always a good idea to directly go visit the land you are considering, meet the owner and build a relationship with him before going through the purchasing process. 

The on site visit is your occasion to negotiate the price and actually touch and feel the land as well as the surrounding area. Do not worry if Bahasa isn't your second language, your  real estate agent will make sure the conversation and the negotiations with the owner will be smooth.

2.Start the buying process and stay safe

Turns out, you like the land, the price is reasonable and the neighborhood fits your expectations. 

What happens next if you want to move forward in the buying process?

You have to reserve the land to make sure no one else can buy it before you!

This get settled in a notary office, not with the owner of the land, here's why:

To reserve your land you have to sign a pre-contract agreement managed by your agent and deposit 10% of the total value of the land. 

If you do so through a notary you can rest assured that if something is "off" from the seller side, example: the owner  does not fully own the land is trying to sell you for example (yes, it happens), during the due diligence process, you can get your money back and walk away from the deal with no loss.

3.Due diligence process

This is the most important step to you as an investor. During the due diligence process you will need to gather intelligence from reputable sources, such as the government or entities tied to it. This is done in order to verify that everything is in order so you as an investor can finish the purchase without any trouble. 

This process takes approximately between two weeks and up to one month.

This is in short what you, along with your agent will have to go through:

• Check the ownership certificate of the seller to make sure he's entitled to sell his land to you.
• Topographic measurements of the land to make sure you are getting sold the correct land size.
• Zoning check (ITR) to make sure you are buying a piece of land on which you can build upon.
  
  For reference the categorisation of the land in a nutshell is as follows:
  
  ☑️Green: agricultural land (cannot issue IMB and can only host only non-permanent structures such as bamboo houses or joglos),
  ☑️Yellow: Residential
  ☑️Orange: commercial & residential (you can can build, get IMB, can request pondok wisata (license to operate rental businesses)
  ☑️Red:  Commercial (can do pretty much anything from building houses, rentals and shops)
  ☑️Pink: accommodation (where you can build resorts and hotels. Pink zones are located near the beach)
  
  
• Request IMB, which is the building permit and you have to verify if the land you are considering can obtain this permit.

If everything checks out and is exactly as you would have expected, you are ready for the last and final step.

4. Sign the agreement and make the final payment

In this phase you will have to finalize your buying intent with the owner. This is done in the notary office where you will be signing your contract with the seller and he will receive the full payment of his land.

Conclusion

Now that you know the steps involved in land investment in Bali, Indonesia, it's time to take action. If you're interested in investing in land in Bali and develop your project, be sure to do your research first and possibly consult with a licensed real estate agent. 

Some investors like to do everything on their own, and that’s totally understandable since they can save on fees, but sometimes by trying to save a little money they end up wasting a lot of precious time, fail negotiation and in the worst possible case, get scammed.

With careful planning and execution, you can make a sound investment that will provide you with years of enjoyment. Thanks for reading, we hope this short article is helpful to you.