Wednesday, April 1, 2009

Real Estate Inspection

Today I am inspecting a small boutique hotel that's for sale for IDR 1,500,000,000 or less than AUS$200,000. It has an owner's residence and four guest villas. I've done some preliminary sums and figured out that it could show a 3% return on the guest villas while still giving us a free residence in Bali.

If you are thinking of buying real estate in Bali, be careful! There are almost as many house, land property and business share scams in Bali as there are money scams. Non-Indonesians can not own land or property in Bali. It must be held in the name of a local and that leaves the foreigner at the mercy of lawyers and courts. Not a bright prospect in this country. Land can be leased but the longest period (and very rare) is 50 years. At the end of the lease you own neither the land nor any improvements you have put on it, eg a house. Similarly your position is risky if you want to buy shares in a Bali business (which might or might not involve property). It can be very difficult to find out if the person offering you a share is really the owner, and great faith can not be put in any official-looking documents you might be shown.

At least get the services of a recommended notary and/or lawyer as noted above, but be sure that they are recommended as an INDEPENDENT person in the possible transaction, certainly not one recommended by the seller. A particular level of notary, known as a ‘PPAT’ must be used for property matters. Kurnia at the Bali Immigration and Advisory Service in Jl Batu Belig in Seminyak is a notary. There are many with street-front shops who are reliable but for overseas travellers finding one with your language skills might be a problem. One who has been recommended strongly and who has good English skills and an honest reputation, is Made Puryatama, home ph (0361) 422 948, office ph (+) 226 782, fax (+) 232 620.

A useful contact in Bali if you're thinking of business opportunities is 'Dadvet' at He says he has learnt of all the pitfalls the hard way and is willing to share his experiences. For a fee, no doubt, in order to recover all the money he's lost trying to do business in Bali!