Bali’s beauty is undeniable, and its real estate market continues to attract foreign investors with promises of paradise, rental returns, and lifestyle freedom. But beneath the surface lie legal nuances and cultural expectations that can quickly turn enthusiasm into regret.

Here are the five most common mistakes foreign buyers make in Bali,and how to avoid them.

1. Using a Nominee Structure

Perhaps the most widespread,and risky,mistake is using an Indonesian citizen as a “nominee” to hold a property on behalf of a foreigner. While common in the past, this approach is legally unenforceable and increasingly scrutinized.

• Risk: Total loss of property rights if the nominee refuses to comply
• Solution: Use legal structures such as Hak Sewa, Hak Pakai, or a PT PMA company for compliant ownership

2. Skipping Due Diligence

In Bali, titles can be disputed, zoning can be inconsistent, and not all land is eligible for development. Many buyers fall in love with a property before verifying the legal foundations.

• Risk: Ownership disputes, halted construction, or resale limitations
• Solution: Hire a reputable notary (PPAT) and conduct land title checks, zoning analysis, and IMB/PBG permit verification

3. Misunderstanding Leasehold Dynamics

Leasehold is legal for foreigners,but it’s time-bound and requires renewal terms to be negotiated clearly. Many buyers assume they can simply “extend later.”

• Risk: Reduced value over time and uncertain future control
• Solution: Negotiate extension clauses upfront and ensure they’re registered with the land office

4. Underestimating Cultural and Bureaucratic Realities

Things move differently in Bali. Expectations around timeframes, communication, and property handovers may differ from Western norms.

• Risk: Frustration, delays, or unmet expectations
• Solution: Work with a locally rooted advisor who understands the landscape, language, and etiquette

5. Buying for ROI, Not Lifestyle Fit

Not every villa is a smart rental property. And not every dream home delivers the experience you expect. Many buyers choose a property based on Instagram rather than insight.

• Risk: Overpaying for style without substance,or poor rental performance
• Solution: Clarify your intended use (residence, rental, hybrid) and choose accordingly. Location, layout, and legal clarity all matter more than trending aesthetics

Final Reflection

Bali can be one of the most rewarding places in the world to invest,but only when done with care, clarity, and local expertise. These five mistakes are avoidable with the right team beside you.

At IndoVillas, we support clients with end-to-end advisory,from legal reviews to property selection,ensuring your dream villa doesn’t come with hidden headaches.

Explore how we work at IndoVillas.