Brochures often promise 12, 15 or even 20% yields. Market data tells a more nuanced story: average occupancy around 40%, high management fees, taxes and, above all, a lease that loses value every year. Here is how to calculate what a villa really earns.
Quick answer
- AirROI data (October 2025 - September 2026): average occupancy of about 38% in Canggu and Ubud, 51% in Uluwatu.
- Full management often costs 28 to 38% of revenue, platform commissions included (according to a local operator).
- Add the local accommodation tax (around 10%) and income tax on rental income.
- In leasehold, deduct each year the loss of value of the lease: that is what separates the advertised yield from the real one.
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Ask my question on WhatsApp1. What market data says
The analytics platform AirROI publishes averages by area for active listings over the twelve months from October 2025 to September 2026:
| Area | Active listings | Occupancy rate | Average nightly rate | Average annual revenue per listing |
|---|---|---|---|---|
| Canggu | 3,827 | 38.1% | ≈ IDR 3.62M | ≈ IDR 395M |
| Ubud | 2,861 | 38.7% | ≈ IDR 1.91M | ≈ IDR 224M |
| Uluwatu | 99 | 50.6% | ≈ IDR 4.17M | ≈ IDR 573M |
As a guide, at IDR 16,200 to USD 1, IDR 395 million is about USD 24,400. These figures are averages across all listings: a recent, well-managed and well-rated villa does better, a poorly located or poorly managed one does worse. The Uluwatu sample, limited to 99 listings in AirROI's definition, should be read with caution.
The main lesson: competition is strong in the best-known areas. Year-round occupancy of 75%, often found in brochures, is not a prudent assumption.
2. Management and distribution costs
Most non-resident investors hand their villa to a manager. According to the fee schedules published by the operator Cabo Bali:
- management commission: about 15 to 20% of gross revenue, or 12 to 14% plus a monthly fixed fee;
- platform commissions: around 15% on Booking.com, 14 to 17% on Airbnb;
- total management cost: 28 to 38% of revenue;
- amount left to the owner before tax: about 50 to 60% of revenue according to the same operator.
On top of this come electricity, water, internet, pool and garden maintenance, staff, repairs and furniture replacement, which the management contract may or may not include.
3. Taxes
- Regional accommodation tax: around 10% of the room rate.
- Income tax on rental income: its rate and collection method depend on the structure (lessor, operator, PT PMA) and your status. For rent paid to a non-resident with no permanent establishment in Indonesia, an analysis published by Ortax applies a 20% withholding on the gross amount, a point debated against the 10% final rate applicable to residents.
- Annual land and building tax and, where applicable, taxes in your country of residence under the tax treaty.
Have the tax set-up validated by an Indonesian adviser before buying: this is often where the gap between brochure and reality is largest. The licensing framework is detailed in renting your villa on Airbnb in Bali.
4. The big omission: leasehold depreciation
With a 25-year lease, your right mechanically loses value each year, down to zero at expiry (unless extended). A yield calculated without this erosion is a yield before capital consumption, not a net yield.
The simplest correction is to deduct each year the purchase price divided by the lease length: USD 250,000 over 25 years = USD 10,000 per year.
5. A worked example
Purely illustrative assumptions, to be replaced with the data of the villa under study:
| Item | Annual amount (USD) |
|---|---|
| Villa price (25-year leasehold, costs included) | 250,000 |
| Room revenue | 40,000 |
| Management and commissions (33%) | - 13,200 |
| Accommodation tax (10%) | - 4,000 |
| Running costs and maintenance | - 5,000 |
| Income before income tax | 17,800 (7.1% of price) |
| Lease depreciation (250,000 ÷ 25) | - 10,000 |
| Economic return before income tax | 7,800 (3.1% of price) |
In this example, a villa "at 16% gross" (40,000 / 250,000) becomes an investment returning about 3% once all costs and lease erosion are included, before income tax. That is not necessarily a bad investment — personal use, diversification or a favourable lease extension can matter — but it is the honest basis for comparison.
6. How to improve the result
- Buy at the right price per year of lease, and negotiate a priced extension option. See Bali prices per m².
- Choose the location for demand, not for the brochure: the area guide.
- Insist on a transparent manager: monthly reports, access to bookings, written fee schedule.
- Test a prudent scenario: occupancy 10 points lower, nightly rate down 15%.
Still hesitating between two markets? Our comparison Dubai or Bali sets the two logics side by side.
Figures to demand before buying
- Actual occupancy and nightly-rate history of comparable villas
- Management contract with a complete fee schedule
- Validated tax set-up (accommodation tax, income tax)
- Remaining lease length and extension terms
- Net calculation after lease depreciation
Frequently asked questions
What is the average occupancy rate of a villa in Bali?
According to AirROI, from October 2025 to September 2026, average occupancy of active listings was about 38% in Canggu and Ubud and 51% in Uluwatu. The best villas do much better, poorly managed ones much worse.
What return can you expect from a villa in Bali?
There is no universal figure. After management, commissions, taxes and costs, net income is often far below brochure gross yields, and lease depreciation and income tax must still be deducted. Always calculate on data from comparable villas.
How much does villa management cost in Bali?
According to a local operator, the management commission is often 15 to 20% of revenue, and total management and distribution costs 28 to 38%.
Why should leasehold be depreciated?
Because when the lease ends, the property returns to the landowner. The price paid therefore erodes every year. Ignoring it greatly overstates the real return.
Sources (accessed 28 October 2026)
Mago Kitaev, real estate investment consultant in Dubai, based in Business Bay. A former project manager in banking and IT, he has been advising French-speaking investors since 2024. See his background
This article is for information purposes and was published on 28 October 2026. It does not constitute legal, tax or financial advice. Indonesian regulations change frequently: have every project checked by an independent PPAT notary and an independent lawyer.