This risk lies in the fact that there are much more offers for rent in your area (city, country) than there are people who want to rent a house.
In such a situation, it will not be possible to reach the expected profitability. The reverse case, when the demand exceeds the placement options, is beneficial for the investor.
Bali is very popular with tourists, and the occupancy rate of real estate is always high. There is a developed infrastructure for living and recreation: from top entertainment venues to medical centers. As well as picturesque nature, untouched by civilization: beaches with blue water and snow-white sand, jungles, rice terraces, volcanoes, waterfalls. A comfortable climate and a temperature of 26-29 degrees allow you to relax in Bali all year round.
In 2022, TripAdvisor included Bali in the top 5 most popular tourist destinations in the world.
While the island was closed for the duration of the pandemic, many new establishments appeared. The authorities also announced the construction of facilities that will attract even more tourists:
- international airport;
- ports for cruise liners;
- Paramount Pictures Theme Park;
- Formula 1 tracks.
These facts suggest that the demand for real estate in Bali will grow, and the supply will remain almost at the same level.
Thousands of people from all over the world have been waiting for the opening of borders for two years to relax here. Since March 7, 2022, business visas and quarantine have been canceled on the island, and more than four thousand tourists have arrived in two weeks.
The demand for rental housing has increased, and the occupancy rate of hotels has increased by 2 times.
According to AirDNA, the cost of renting housing in 2022 has increased markedly compared to the same period in 2021 and will continue to grow.
The authorities expect that Bali will experience a tourist boom in 2022, and in the next 2-5 years, the number of vacationers on the island and the demand for rental housing will grow rapidly. Therefore, you should not worry about the high risk of demand.