are you a property owner considering to put your property into long-term rentals are you looking at exploring the option of getting a single large sum of money at the beginning of the year and then being able to kick back and relax while your tenant pays you throughout the year i might have some shocking news for you here in 2025 that might be worth considering stay tuned and listen to more secrets about how you can make better investment decisions here at the Bali Business Review with me on Market Insights [Music] all right so my name is
Jing and I'm the CEO of Bukit Vista and just to be upfront I probably do have of course a stated interest in getting more short-term rentals that is the business of our business at Bukit Vista however I'm speaking plainly in my efforts to create a more sustainable and economically beneficial marketplace for all investors in Bali so I'm doing this long-term not just for the benefit of my own business and my own company so why am I uniquely qualified to speak about long-term rentals how about this i founded my business based on an enormous influx of
long-term rentals that emerged around 2010 i'll tell you the story of how that happened so one day I was working at Ammon and my wife calls me she tells me that "Hey Honey Bunny that's her nickname for me i've got a car load of guests who want to lease a property for about 3 months so having worked as a real estate agent before I took out my phone this was a Nokia phone at the time and I went down the contact list and I said "Call these owners ask to then get permission from their helpers
and housekeepers who are always living on site they'll open up the doors for you your guest will be able to inspect the property and if they like it ask them to submit an offer and the owner might consider instead of selling the property to rent the property out long term so she said "Okay." And then she went about and showed these passengers in a car this sequence of properties in our portfolio now I didn't think much of it at the time but that moment would be pivotal to the founding of our company why because just
in about 3 hours later they made an offer they made an offer that was almost double what the market rate was and I was astounded i said "Who are these people?" And she told me that they were Norwegian students and I thought "What that makes no sense i've never seen that demographic before what are Norwegian students doing renting out luxurious villas for three months of the year?" Turns out and here's a great story the next day another batch came but this time in three cars and then the next day after six cars next day after
12 cars so an entire school of Norwegian students in Jimbron were making an exodus out of the I guess school provided accommodations at their hotel on Jimbron Beach and they were looking for an alternative and so the budget that they carried with them was the same budget but when they pulled together they had a lot of money so one by one we rented out up to about 15 to 20 villas even a few hotels and that got Book Vista started so I am very appreciative of how long-term rentals can be very desirable and also very
what would the right word be profitable but the sad story is that within 2 years this entire market got so competitive got so unregulated that broke to the point where the school itself was regulated and asked to remove themselves from Bali because the Norwegian government hadn't been funding the students to stay in Bali and they didn't think it was very appropriate for the students to spend government money on villa housing and partying in couta and jumping off from roofs into swimming pools so anyhow that market ended rather or quickly due to a lack of correct
management all right so now brings us to 2025 where I'll talk about some of the factors that everybody has been watching and why a long-term rental might not be such a great idea so here's where it begins when we look at long-term rentals we need to examine who our customers are going to be and so for the majority the customers fall into a few categories the first and this is a broad term of the customer is called the digital nomad when you unpack that word digital nomad you start seeing that there are subtribes in that
large tribe so within the space of digital nomad what you're speaking about is a person who can earn a high income without having to work in a industrial city they can work in Bali or on the internet and they can do so while maintaining let's say a high income source that will be able to pay for a luxury property or pay your rent that you're hoping to gain from their tenency so let's break down this digital nomad into different categories and you can see more clearly what is happening i would say the first category and
the most entry point category is not is not going to be the type of person that will spend a lot of money for an accommodation this is what I call the solo remote entrepreneur okay so I have friends like this i've been this job before to myself so I'll give a little bit more insight on what the solo remote entrepreneur is so the solo remote entrepreneur is usually a one or max twoperson company what do they do they offer a service or a I don't know if it's called service but they're a oneperson business one
or twoerson business and this is how they go about it so one of the common occupations of a solo entrepreneur is to do digital marketing online or dropshipping or some other business that they can manage by stitching together a bunch of services on the internet and also connecting their clients on the internet so I'll give you an example a very good example of a guest who was a solo remote entrepreneur this was a couple and they were fairly wealthy and they stayed almost a month in one of our resorts in Balanga back in 200 this
is before co so this is about 2019 okay so it was an Italian couple and what they had done was brilliant they had found a way to manufacture sunglasses without having to start an office go through the process of hiring employees and then building a factory so this is how they started the process they went on to a platform website to look for an artist that could design the actual sunglasses and then once the design had been published they used some clever photo editing and video editing skills to go on Kickstarter to get funding for
their new project after they had secured the funding then they released the design drawings to a contract manufacturer which they again found in China and they ranked and looked through the platform found a contract manufacturer paid the funds that they had raised on the Kickstarter to this Chinese mag manufacturer the Chinese manufacturer produced and palletized the shipment which they then gave to a logistics manager it was called Flexport that then brought the entire pallets of sunglasses to the Amazon FBA fulfillment by Amazon and Amazon received six pallets of these sunglasses putting them into their warehouses
and started distributing them all across the US North America and the world so this person was able to make around 8 to 10,000 a month at least from selling sunglasses that they had made without having to go and hire a team build a factory pay for logistics and set up their own distribution they were stitching together service after service that they had coordinated on the internet to become a solo entrepreneur they were successful and of course they need to keep on inventing new and new styles new brands and one of their primary responsibilities was to
go on social media advertise create content and Bali was a great location for them to exercise this type of background to gain attractiveness to their lifestyle brand so that's one example of a solo entrepreneur so this person at different levels has different budgets if they're just getting started out they're probably not going to pay a lot for their accommodation they're going to pay much more into their business of course they're just getting started once this solo entrepreneur is let's say a little bit more established a little bit more successful then they might splurge a little
bit and spend a bit more on their accommodations and then become a good customer but this type of category of entrepreneur is increasingly more and more competitive and the main reason is because of things like YouTube youtube is spilling out the secrets of how to do this such as myself and more people are embarking on this process which increases the competition lowers the margins and also then makes the disposable income that somebody would have to engage in renting expensive properties a little bit less likely they're going to be spending more now on competing on marketing
they're going to be spending more on competing on getting let's say also with tariffs and global trade being so tumultuous these days it's not so simple to organize a logistics coordination like the way I described back in 2019 so this type of trunch is probably going to be shrinking over time so you're not going to be getting as many solo entrepreneurs with large amounts of disposable income to spend on accommodations so this category is probably a declining trend Let's go to the next category the next category of digital nomad was never a digital nomad but
they like the sexy title because they were remote workers what is a remote worker a remote worker has a job at an established technology company or any company that allows for remote work they might not be an entrepreneur they are probably doing something like systems admin or computer security or they're a software developer or they're a project manager they're in Zoom calls all day they're on Trello boards they're on Slack channels they're using Discord and they are coordinating and managing teams but remotely they're paid a salary and yes these people would tend to have one
of the most stable most generous budgets that they could afford to spend on a long-term lease and during the 2020s right after co up until about 2024 this was a very large segment of some of the lease takers in the bully rental marketplace so that part was fairly good and fairly stable okay so this marketplace as you can imagine this trunch of customers is only seeing decline over the next few years as more companies are asking all their workers to not work remotely but return back to the office you can see this policy being rolled
out everywhere across the world remote work as a category has not done very well in terms of good business culture so people goofing off at work or not even working at all keeping their cameras off so this type of remote worker is also seeing a decline in the total amount that they would be going to Bali and perhaps spending on accommodations as well so you're seeing a decline in this market as well all right let's go into our last category our last category is not a digital nomad at all this person I would call is
just the regular executive so this is a person who has a upper level managerial position in either their own business or a large enough business where their presence and their whereabouts are not critical for let's say they're at work these are decision makers these are the shot callers these are the big bosses so this type of category is not tied to any location for doing their business they can be in Bali they can be in Tahiti they can be the Maldives they can be in Switzerland this type of person travels everywhere year has a global
footprint in the 80s they would be using a cell phone in the 90s they would be using an iPhone and now in 2020 they are probably using a Zoom call or even AI to get their job done this category expanded massively during the 2020s after the Ukraine Russian invasion we saw a lot of money and a lot of residents pour out from Russia and accumulate in Bali and for the most part partially digital refugees I could call them but these were generally executives and people from upper management positions and they could command financial capital they
could work globally and not have let's say a geography impact their lifestyle or way of doing business but this category also is seeing decline of course now the situation in Russia is much more deterministic and so a lot of Russians have left Bali in search of once again greener pastures in Thailand or simply gone back home because the outcome of the war is much more certain now other factors that we're seeing more and more of these what do you call it let's say executives choose different locations throughout the year they're not going to commit to
a long-term rental just in Bully when there's a great ski season in the winter in Aspen or there's a party in carnival that they want to attend in Brazil or some other season of the year where they want to make choices about where their location is going to be so this type of traveler is also not going to stay put so by analyzing each major trunch of potential long-term guest I'm forced to ask the conclusion or reach a conclusion of whether or not there is a strong marketplace for long-term leases now this is where I
need to reach out and ask the community whether or not they see anything that I haven't seen so if you watch my video and you have found a new trunch of customer that I haven't mentioned or you're able to successfully still lease out your properties to people are willing to pay 6 months or 12 months up front please let me know but otherwise I'm going to stay committed to this idea that the decline the long-term rental guest is inevitable and it probably will not pick up and if you're looking to gain investment value out of
your property you should consider other options all right signing off again this is Jing with Market Insights here on the Bali Business Review reporting as once again here in California goodbye [Music]
