Due to the deterioration and loss of marketable housing, you may lose part of your income, because the demand for old real estate is low, and you need to invest money in repairs.
This risk is more related to secondary real estate, so give preference to new buildings. And also, when buying, pay attention to the following points.
Date of construction: the older the object, the higher the risk.
Construction quality: walls, floors, ceilings, windows and doors, sound insulation, electrics, water supply.
Practicality of the materials used: natural materials in an open space quickly become unusable.
The condition of the property: whether additional investments are needed.
Hidden defects: water leaks, mold, etc.
Choose a property in Bali where high-quality modern materials are used: stone, glass, metal. They keep their presentable appearance longer, despite the hot and humid climate.
Inflation
This phenomenon can slow down the growth of capital or even devalue it. To calculate this risk, you need to understand the economic situation of the region and understand the future: there will be growth or decline.
For example, if the profitability of real estate is 5%, and inflation has risen to 8.7%, as in Russia in 2021, then the value of capital becomes 3.2% lower than the starting one.
In Indonesia, the inflation rate has been declining over the past 5 years, as can be seen in the graph below. In 2021, it was equal to 1.87%.