Expenses To Be Prepared For When Renting In Bali

So, congratulations, you have decided to start a villa rental in Bali or even already own one! At MRE Bali, we are here to help you understand the most common expenses associated with villa rentals in Bali to help you prepare and manage a budget. Let's get started!

Up-Keeping 

Keeping your villa in Bali in top form will necessitate periodic upkeep. This might include fixes, makeovers, landscaping, swimming pool upkeep, and pest management. Allocating a budget for maintenance is essential for preserving the quality and appeal of your villa. It is necessary to set aside the income generated from the Bali villa rental for maintenance purposes.

For villa owners who lease out their property, the most common approach is to put aside a portion of their rental revenue in a sinking fund for upkeep. We suggest allocating a budget between 2-4% of the total annual rental revenue for regular maintenance.

Staff & Workers

The individuals taking part in a company's operations are known as employees. For villa rentals in Bali, employing staff is a regular occurrence. This expenditure is used to pay the salaries of housekeeping, gardening, security, etc. At MRE Bali, we recommend treating staff fairly and with respect by paying them generously for the work they do and above the minimum wage, so they can adequately support their families.

At present, the Regional Minimum Wage in Badung Regency is 3.3 million IDR per month. This covers popular tourist areas such as Kuta, Seminyak, Canggu, Pererenan, and the Bukit Peninsula. 
In addition to paying your staff, you need to ensure that your employees have insurance coverage. This is mandatory to pay through the BPJS government program. This payment is in addition to the Regional Minimum Wage. We suggest adding your staff’s insurance payments to their monthly/yearly salary package.

Electricity 

Electricity is an important source of energy that has changed the way we live and do things. It has enabled us to power our homes, businesses, and cities. It has become an integral part of our lives and its power is undeniable.In Bali, electricity is provided by PLN (Perusahaan Listrik Negara), and homes and businesses typically have prepaid meters that can be easily topped up or recharged with tokens via mobile apps or at Alfamart/Indomaret stores.

Electricity bills can get pricey, particularly if your residence has a big power source and provides amenities such as air conditioning, heating, or a smart home setup. The pool pump can be a significant cost as well. Be prepared for electricity bills to fluctuate, with an average of 1-3 million IDR per month. Putting in energy-saving measures and being aware of electricity usage can assist in cutting down this cost.

Internet

In this modern day, having a quick and dependable internet connection has become a necessity for most people, particularly with the growing number of nomads. Therefore, if you are not planning to use your villa as a place to live in solitary, you should take into account the expense of internet services when calculating your general expenditures. In this day and age, having an internet connection in a villa is a must!

Villas and hotels in Bali often choose Global Xtreme & CBN as their internet service provider. Internet costs typically range from 300,000 - 700,000 IDR per month depending on the bandwidth speed. 

The Banjar

The Banjar represents the local community enforcing traditional laws, with each region in Bali having its own Banjar overseen by representative chiefs (klian adat) from the families residing in that area.

In Bali, it is customary to contribute to the Banjar (community association). This fee not only increases the area’s security (Pecalang) but also provides funding for local events and ceremonies, which is an integral part of Bali’s culture.

If you own a villa that operates as a rental accommodation, you will be required to pay a monthly fee to the local Banjar, typically ranging from 50,000 IDR to 250,000 IDR. The cost of paying a Banjar is not the same in all neighborhoods, as the rules and regulations can differ, so always discuss with your Banjar to ensure you are paying the correct amount for their services. 

Waste/Garbage Collection

 The process of collecting bins or other receptacles containing waste materials and sending them to the appropriate destination for disposal is known as garbage collection.

In Bali, a common way to get rid of trash is to use dump trucks that drive around at certain times to collect the garbage from the villa's front. It is key to be conscious that garbage pick-up may be suspended during significant Hindu religious ceremonies like Galungan or Nyepi, as the service providers take part in these rituals. Garbage collection fees vary between areas, but typically, you will be expected to pay 100,000 - 200,000 IDR per month. 

When it comes to disposing of your villa’s waste, we encourage clients to opt for an eco-friendly way of waste management and support this beautiful island. EcoBali Recycling (@ecobalirecycle) is bringing innovative Responsible Waste Management Solutions to keep our beloved island. Their services cost around 800,000 IDR for 6 months. 

Revenue & Property Taxes 

Income and land taxes are two distinct types of taxes that individuals and businesses are expected to pay. Income taxes are based on earnings, while land taxes are based on the value of a property. Both taxes can have a significant impact on the finances of taxpayers and should be taken into consideration when budgeting.

As a villa owner, you are obligated to pay taxes on the income brought in by rental bookings. We have a great contact for tax advisors - contact us today to learn more, and we will put you in touch with our high-end tax consultant. 

Total expenses for running a villa rental in Bali can amount to around 20% of the monthly/yearly rental income, excluding villa management fees. For total management including cleaning, pool maintenance, marketing, etc., villa management companies typically charge 15-20% of the rental revenue.

We hope that this has helped you understand what to expect when renting your villa in Bali! Please let us know if we can help you further by contacting us today. 

This article is intended to provide information only and should not be used as a means for making any legal, financial, or investment decisions. It is highly recommended that readers seek advice from experts or professionals before taking any action based on the content found in this article. Neither the author nor the publisher can be held accountable for any negative consequences that may result from utilising this information.