Real World Assets is the next trend

Bali may look like paradise in glossy brochures or from the comfort of a five-star resort, but once you step into the world of business and real estate investments, you’ll find it’s far from a carefree fairy tale. Don’t get me wrong; it’s no worse than anywhere else when it comes to challenges—just that the idea of effortless profits here is largely mythical. Especially in real estate, easy money is the exception, not the rule.

Now, I’m not talking about the basics of Indonesian property law, which every serious investor either already knows or quickly learns. Foreign ownership limitations are well-known, and if you’re looking to buy property here, you’re already playing by those rules (check out this article if not). What throws investors off in Bali are subtler pitfalls—the kind of mistakes that aren’t spelled out in any regulation. So, let’s dive into the common traps that catch people off guard—the ones you might not see coming.

Diving In Without a Game Plan

Going into an investment without an investment thesis is like jumping into a card game without knowing the rules. You might try, and sure, there’s a sliver of a chance you’ll win if luck is on your side, but more likely, you’ll lose. And in real estate, that loss can be serious. An investment thesis is your answer to “How exactly am I going to profit?” The more specific it is, the better. Without that answer, you're basically wandering in the dark, hoping for a win while risking a real loss.

A strong thesis doesn’t have to be universal; in fact, the more tailored to your situation, the better. Say you’re looking into Bali real estate. Maybe a local friend tips you off that an undeveloped area will get a new road and utilities next year. That’s valuable insight, and right now, property there is likely cheap. Or, possibly, you’ve noticed remote workers flocking to certain neighborhoods, creating demand for work-friendly spaces. You could invest in a stylish café where they can hang out and work, capturing a slice of that market. Or, even take it further by adding rentable meeting rooms or quiet zones. Each of these ideas gives your investment a purpose and a clear profit angle, which is essential if you’re serious about success.

Overhyping Bali’s Market Potential

Bali’s real estate market may look like a goldmine, outperforming many other markets with impressive returns. But it’s important to stay grounded—this isn’t a first-world real estate market where trends are steady and predictable. In Bali, the rules are different, and the landscape can shift quickly. Take the COVID-19 lockdowns as an example: practically overnight, the Indonesian government shut down Bali, and the market came to a standstill. Profits evaporated, and properties that once seemed like smart investments were suddenly empty liabilities. The longer the market stays hot, the closer it edges toward risk, and with it, the need to temper expectations.

To navigate this reality, focus on short-term, flexible strategies. Look at properties that can adapt easily—like those suited for short-term and long-term vacation rentals. You get the option to pivot when needed. Another strategy? Stick with universal properties that can attract diverse renters. Think centrally located apartments that work for digital nomads, vacationers, or even locals if the market shifts. These types of properties give you a buffer against sudden market swings and keep your investment resilient, no matter the trend.

Ignoring Bali’s Seasonal Business Cycles

Bali’s year-round tropical weather might suggest steady business and give 70-90% occupancy rates annually, but tourist flows still have a rhythm here. High season (July-August and December-January) sees a boom in visitors, but when low season hits, from February to April, things can quiet down. Occupancy rates might dip, and if you’re not prepared, so will your rental income. 

To keep rentals profitable during the off-season, consider a few tweaks. Discounts can draw budget travelers or long-stay nomads looking for a good deal. Add a bit of value—a free breakfast, guided island tours, or reduced rates on extended stays. Target travelers who prefer the calm of off-peak seasons through social media. Partner with local businesses to create package deals, maybe a fitness subscription or a yoga retreat, that give visitors a richer experience and keep your property in demand year-round.

Overlooking Bali’s Maintenance Realities

Bali’s tropical beauty comes with a catch: the climate is rough on buildings. High humidity, salt in the air, and intense sunlight accelerate wear and tear. Wood can rot quickly, metal rusts faster, and the salty breeze takes a toll on paint and surfaces. Regular maintenance and high-quality, climate-resistant materials make a difference here. Without them, you’ll face frequent repairs and a property that ages faster than you’d expect. Budget for ongoing maintenance and use materials designed to withstand Bali’s unique conditions—your property (and future guests) will thank you with positive reviews and longer lifespans.

To protect your investment in Bali’s challenging environment, focus on properties built with materials and designs capable of resisting the island’s intense climate. Make sure the building has robust waterproofing and drainage systems—key defenses against heavy rains and high groundwater that can compromise foundations. Consult an expert on materials; for instance, autoclaved aerated concrete (AAC) blocks handle moisture far better than standard concrete. Certain types of treated bamboo can also offer longer-lasting durability. For a deeper dive into these construction and maintenance strategies, check out our article on ensuring quality when building in Bali—you’ll learn how to choose a high-quality property or even build one to last.

Underestimating Tenant Challenges

Finding the right tenants is crucial for keeping your rental income steady. If tenants come and go too often, it disrupts cash flow and pushes costs up. And the worst-case scenario? A tenant stops paying rent and drags you into a lengthy, costly eviction battle. We've all heard these kinds of stories from the US and Spain, and without careful screening, they can become a reality in Bali as well.

A solid tenant screening process is your best defense. Check their credit, run background checks, and talk to previous landlords—don’t just take someone’s word for it. Confirm they have a stable income and a track record to match. A clear, legally sound lease agreement is essential too; it sets the standard for payments and property care. Once they’re in, keep good tenants around by being responsive and addressing concerns quickly. Tenants who feel valued are more likely to stay, saving you both time and money in the long run.

No Clear Online Presence

In a digital world, you either go online or get left behind. You might have the best property in Bali, but if no one knows it exists, what’s the point? Poor marketing and bland ads won’t make your property stand out. To catch potential tenants’ eyes, you need a strong online presence that tells people why they should pick your place over the rest.

Start with quality visuals. Share stunning photos and viral short videos on Instagram, using hashtags to reach a wider audience. Encourage guests to leave positive reviews, and make sure to engage with them—respond to comments and messages to show you care. And don’t overlook local Facebook groups; they’re a goldmine for travelers looking for Bali rentals. The more visible and approachable your property is online, the better your chances of keeping it occupied and profitable.

Skip the Headaches—Invest with Binaryx

If managing all these details sounds exhausting, Binaryx offers a simpler route. Our platform brings together international real estate opportunities in one place, making it easy to invest without the usual hassle. Whether it’s a rental villa in Bali, new construction in Montenegro, or apartments in Turkey, Binaryx allows you to explore high-growth projects, all powered by blockchain technology for transparency and security.

Here’s how it works: we tokenize each property, splitting it into digital shares you can own for as little as $50 per unit. Take, for example, a $195,000 villa in Bali. Our team assesses its market value, sets up a limited liability company (LLC) to hold the title, and creates digital tokens representing ownership shares in that LLC. Smart contracts automate income distribution, so you’ll receive rental payments without lifting a finger. And if you ever want to sell your share, the secondary market gives you a quick exit, unlike traditional real estate.

With Binaryx, you don’t just invest—you become a part-owner of real estate, gaining the benefits without the headaches of hands-on management. It’s real estate investing, simplified and accessible, all within one platform.

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