Selamat pagi! That means good morning here in Indonesia, although I'm in California. Welcome to part three of my series on the proliferation of short-term rentals and its effects on investment strategy.
Today, let's go a little bit deeper about plans of how we can alleviate the situation that we're facing in the Bali property market right now. Yes, there is an abundance of short-term rentals. We've already explored in past videos how that abundance came to be.
We see that the breaks are currently off and this proliferation of short-term rentals is likely to continue. We know that there are many construction projects due to finish in the next three to six months that will probably create more supply onto the Bali marketplace. But what can you as an owner do?
What can you as a person looking to enter or exit the property rental market or the short-term industry do? We're going to go over a few tips of how to evaluate different options. We're going to look all across the board on different strategies that seem to be working and strategies that don't seem to be working so that you as an investor have the clearest insights on how the property market is doing again.
Once again, this is Jing with Market Insights exclusively for the Bali Business Review. Let's go on into the start of it. Which probably indicates to me that there is no international flights to Lombok.
By the way, I need to shout out to the commentator on this video. I was incorrect so I'm correcting my own mistake before it goes viral that I don't know what I'm talking about. So there is actually up to three international flights that go to Lombok coming from KL and Singapore.
Wait, let me just double check that to make sure I know what I'm talking about again. Okay, so if we look at FlightsAware, I'll show you how we actually track that and make sure that we have the right stuff. So we go to the Lombok International Airport over here.
Lombok International Airport and what I forgot to do was this. I forgot to zoom in and check the tab for international. As you can see here, there's two tabs.
One for domestic flights to Lombok. That's this one over here and then another one for international. I didn't detect that last time so now with this correction, it's been corrected.
So there is one, two, three, four flights coming into Lombok. One from Malindo Air Asia, Tiger Air and Air Asia again and they are of course coming from KL and Singapore. So there are some direct flights but the critical thing to realize is this that even though KL and Singapore are once again major international destinations, this is probably still a transfer on its way to Lombok.
So you're not getting those direct flights let's say from Tokyo or major cities but this is actually okay there. Now having had this information, I'll revise my particular assessment. This is probably how most people connect to Bali too as well.
So people will connect to Bali through intermediate stops like Singapore or KL. So a good sign for Lombok. Okay, so four flights coming into Lombok International.
The capacity of each of these flights, I'm guessing. Let's go ahead and take a look. Let's see what kind of capacity is on each particular flight.
Okay, so the Boeing 737 seats typically 162 passengers in a two-class configuration or one -class configuration. You can bet that most budget airlines will probably do the one-class configuration. So that's 189 per flight.
If we want to be thorough, we can go and do some more research on each of the flights to find out the equipment that each flight route is carried on. That will give us a rough estimate of how many passengers a day will be arriving to Lombok. That gives us a way to size the opportunities for accommodations and for daily spend.
So just without looking too much into it, you can probably guess that there's about a capacity of 800 passengers a day into Lombok given that it's approximately 200 capacity on each of these flights. Once again, I probably need to do a little bit more in-depth research, but just with a cursory examination using some simple Google keyword terms, you can already see the estimate for what this would be like. Okay, all right, thank you for the correction.
Let's go into the deep dive now of how as a property investor you can get in the most benefit in this particular turbulent season in Bali. The first thing I think is to really realize how to enter the marketplace and how you enter the marketplace given that you're going to be making a fairly sizable commitment and investment matters about 80 percent of what's going to happen next. Okay, so this is how we deconstruct the process of actually how to enter into the marketplace at the correct value because once again your denominator in an ROI is the most important thing if you want to get the highest ROI.
If you want to get the highest return on investment, then you need to make sure that when you come into the market you get the best and fairest and lowest price possible. Otherwise, you'll never be able to get your stated return on investment. So, that's the key.
All right, so if you're looking to get the strongest best return on investment and enter the market with the best price, what are some tips that you can go through to identify what are opportunities? The first thing you should do is you should qualify your source of information. Now, what do I mean by this?
So many people when they make an investment decision they become lazy. I understand I live in Bali, it's hot weather and you're in a holiday mode, but you shouldn't be lazy if you want to essentially be not panicking and not be anxious when you go back home. You should do a little bit of research and qualify your sources of information.
Here's how you qualify a source of information and do a little introspecting yourself. Do you trust somebody who has a conflict of interest to your financial game? Now, what do I mean by that?
As spoken about in the previous videos that we've talked about, developers and sellers of property are not looking to actually give you the best return on investment by very nature of their position in the marketplace. It doesn't mean that they're dishonest, it doesn't mean that they want to scam you, but it is simply put that if they do offer you that value as far as your return on investment, that's less value that they're taking for themselves in terms of cash flow or in terms of their exit price from the property that they've been building for two years. Now, you just need to understand a little bit deeper about the psychology of a developer.
So, having seen thousands of developers over the past 20 years in Bali, I can tell you one thing. Developing is no business for those who do not like high risk. Developing is very risky.
There's all stages of risk from the very initial part of buying the property to permitting, getting the legal authorization, contractual risk, and then product user fit when you finally bring the property to market. So, all throughout these entire different stages of risk, developer is anxious and hoping that this massive drain on their cash reserves, hopefully, when built, when launched, when sold, will rise their fortunes relatively quickly. And then, of course, they start a new cycle of what to do with all this excess cash too as well, which begins another quandary and dilemma for a developer.
This particular situation then makes it such that the developer is in no, let's say, position of charity to actually help a buyer gain the highest return on investment when they themselves are in such a large deficit at the time before launch. It's just natural. If you look at the cash reserves and cash flows of any developer, they will go through a very similar cycle.
It is a very high risk, high tension experience to be a developer. So, therefore, if you look on the development platforms brochures and they promise these staggering returns on investment, yes, okay, maybe there's one in a hundred developers that are willing to sell their particular product to you with a normal financial return, but it is much, much better that you can use some strong analysis to verify whether or not what they're talking about simply makes some sense. Here's one particular tip that I can offer.
When a developer tells you that they plan to reach an international market, or maybe sometimes it begins with the wrong buying perspective, with the wrong buyer expectation, I'll give you one of these examples right here. Buyers often ask developers, where do you get your guests from? What is your average daily rate?
These two questions are some of the worst questions I think to ask in 2025, and I'll explain to you exactly why. It doesn't really matter anymore how you actually target an audience. Nobody is anymore in 2025 targeting a specific type of audience from a specific type of geography.
That just is some sort of carryover from the traditional travel agency days when each particular travel agency had domination over a geographic region. You would go to a German travel agent to get German travelers, you go to a French travel agent to get French travelers, and you go to all these different travel agencies to lock into different segments of the world. That simply just doesn't work the same way in 2025, because guess what?
Everybody is using internet platforms to reach a global audience, just like Spotify, just like YouTube, just like Instagram. As soon as your listing goes live on any international booking platform, it will be seen by people from all over the world. In fact, most of these platforms, having worked at Airbnb, will automatically localize your content and your particular offering to fit in each of these diverse locations.
That is actually another reason why I always suggest to go and book and transact through platforms. Platforms do a ton of follow-up work to optimize your content and its performance to each localized region that you could never hope to gain on doing a private website. It just doesn't have the same scale or the same feature-rich capability that platforms are trying to do.
So that's tip number one. Tip number two is when you ask a developer what's the average daily rate? What can I get for this property?
They don't know. And if they tell you what the number is, they probably are not giving a factual response. The reason we know as property managers is that we've been looking across 10, 15, 20 years of data all throughout the Bali marketplace, and we know that there is a different price on a different day for each unique property, for each unique region.
It really depends on the marketplace. It really depends on the specific highs and lows, the seasonality. So when you're asking a particular question to a developer of what's the average daily rate I can get this particular property, you're asking what I think is a false question.
A much, much stronger and better question is to zoom out and to think of it holistically. A much better question would be to ask how much can I expect to gain from this per year? Now you have essentially a benefit factor from what you are essentially buying the property in terms of what is your purchase price divided by the number of years that the purchase is good for.
Let's say it's $250,000 divided by 25 years. So you're paying on average $10,000 per year, which of course is amortized as you get towards the end of your contract. So $10,000 in let's say 20, what, 50 dollars is probably going to be a lot less than the same amount in this time.
So then what you want to do is you want to step up and actually calculate how much revenue you can get per year and what that cash flow is likely to look like throughout the rest of the 24 year time. Asking a average daily rate is such a, I just think it's such a misleading question. It goes up, it goes down, it can go up and down by up to 5x.
So why ask that particular question? It just is so hard to actually track. If you do want to track, yearly performance is far more stable.
The highs outweigh the lows or they balance out somewhere in the middle. And so that's how you essentially you're asking a strong question instead of a false question to your developer. Next is to actually go about and just go outside the developer realm and think about who else are you getting this information from?
Are you getting information from a driver? Are you getting information from a family friend? Are you getting information from somebody you met in Bali at a bar and became good friends with?
Then ask yourself, how do they know? How do they actually know any of their particular knowledge about the marketplace? Did they get it from essentially facts or are they hearing anecdotes?
One of the most common problems that we see in the Bali investment community is that most people, and this is even, I encountered this so many times when we do deals with different B2B partners. People get together at meetings and they make decisions and there is no data, there's no slides, there's nothing based on fact. It is just a bunch of rendering after rendering showing everything beautiful, showing everything luscious and then some gobbledygook fourth grader mathematics thrown in at the end, assuming peak prices and peak occupancy and people just gloss over that.
Sometimes not even that, sometimes just based on an anecdotal story of someone wound up becoming a huge millionaire because they bought a property a few years ago and then they exit it at a huge amount. So when we see that we go, that is probably not a correct way to make a strong investment decision. A much better way would be to do what?
Friendly viewer, this is why we're creating this channel too because to be honest, there is not a lot of objective tabulated data out there available to speak about what is actually happening in the Bali property market. So if you're used to the way business is done in the United States and other countries, you'll see that there is this thing called the MLS. The MLS is essentially the idea of a multiple listing service and it will record down the transactional values of different properties.
We unfortunately just don't have that in Bali in Indonesia in general, but what you can do is you can go through and look for source information. Source information, I swear to God, will save you so much time, will save you so much headache rather than getting essentially a interpretation of another interpretation. What do I mean by this?
When you hear news about the government, when you hear news that, oh, the government is planning to do this or the government's planning to do that. So what you can simply do is you can probably just do this on ChatGPT. You can ask ChatGPT to do some research for you and find you source articles on what the government is actually planning to do instead of listening to hearsay or whatever's trending on social media.
Because as we know on social media, sometimes the false information trends faster because it's more sensational, because it's more ad catchy, because somebody's learned how to tune the algorithm better. So what you can do to essentially reduce your risk of falling for the wrong type of anecdotal information is to go check on ChatGPT. Ask ChatGPT about the particular source of this particular news and trust what the government writes.
Don't trust what the media or everybody else writes. Government always releases press releases. You can find these press releases online.
They're going to be written in Bahasa Indonesia, but hey, look, all you have to do is do a screen share, put it in Google Translate, and you can read it for yourself direct from the source of what is actually happening in the local politics so that you have a much, much tighter sense of straight from the government's mouth of what's going on. Now, one of the other red flags that I've seen is this idea of buffering. What is a buffer?
A buffer is somebody who you talk to that essentially is controlling the access to source information from you. This buffer can sometimes be a notary. This buffer can sometimes be the person you're transacting with.
So what they will do is they might or might not even have access to source information, but they will interpret the source information in a guided way such that you will get essentially the picture that they are trying to paint for you. So once again, it's this concept of don't ask the barber if you need a haircut. If you do need a haircut, then you should be your own decider whether or not that makes good sense.
Okay, follow these tips, and I think you'll find it far more easier to actually get to the source information. I'll give a demo, in fact, and you can see how this works, okay? So what I'd like to do is I'm just going to open ChatGP over here, and I'll start with a fresh screen, and I'll record it so you guys can take a look and see what I'm doing here.
All right, so if I go to ChatGPT, and I want to, let's say, go historically and find out what is essentially the truth about moratoriums, right? So we've heard about the moratorium in Bali. We've heard about how the government is putting a limit on the number of hotels and villas that can be built.
Let's go try to find out what the truth is to that, right? So let's take a look. What is the source information about the moratorium to hospitality construction in Bali, and could you help me find the official government source, okay?
Okay, all right, so we're letting ChatGPT do the research for us, and it's going to, okay, here we go. We find that there are some articles on Hotel Investment Today, BaliExpat. com, and some other sources.
We're not interested in these particular sources that are, let's say, news and media. We want to go right to the source. There's SCIF, Global Construction Review, Bali Expat, okay, Jakarta Post.
Okay, so these are all major websites and news, but let's go even deeper, right? Let's go and see if we can find a government source, okay? Is there a government website that speaks more authoritatively about this in Indonesian?
Because remember, Indonesians do not publish official documents in English. Why would they? Makes no sense.
So let's see what we can find. Okay, all right, so we're finding some, okay, unfortunately, ChatGPT thought I meant to actually give the result in Indonesian, but what I actually meant was to, okay, here we go. Okay, now we're finding it.
We're finding, essentially, the official sources from the government. You see, these are go. id, those are official government sources, disparta, official government sources.
Okay, good, good. So what we're going to do is this, right? Because we can't read Indonesian, I think, for the majority of our audience, or actually, I don't know, maybe the majority of our audience can't read Bahasa Indonesia, but let's say we'll assume, since I'm speaking English, that you expect this to be in English.
So now I'm going to say, now translate this to English, and can you help me to translate those websites' titles into English as well? Okay, so this is all pretty easy. It doesn't take a lot of effort.
It's just a little bit of ChatGPT work, and within three drops, I think, you can get to the source. Okay, good. Now what we're getting is ChatGPT is doing the hard work and then going through and essentially writing these articles so that we can read it.
Okay, now, once again, I encourage everybody to just do a little bit of this research firsthand so that, once again, you could independently verify what the government is actually doing. Many times, you'll find that the actual government record is quite mild, but then it gets sensationalized. It gets essentially sparked as fear and whatnot online, so that isn't very good.
Okay, so just go to the original articles written in Indonesian and ask ChatGPT to summarize it for you, and you can even ask it questions now that it has. You can ask it questions about, let's say, now here's a good example. Here, I love doing this because this is such a good example.
Now, you see the difference between an actual real government website and splashy media? The government, for lack of better word, does not produce really search engine optimized content. Okay, but it is official content is coming from the go.
id, which means it's the government of Indonesia, and they write the content in one massive text wall, which, of course, very few people are really going to read because it's kind of difficult. Sorry, most governments, as you know, probably don't change very quickly, so in this age of 2025, they're still putting things in a traditional way, but this is high quality source information that you can use to, once again, make good decisions on. Okay, so we've gone through this particular tip, right?
Don't trust anecdotal evidence, or if you do hear anecdotal evidence, just go through ChatGPT, ask for the sources, don't compromise and look at media sources, go down to the actual government press releases. Those are about as close to reality as you can get, and by the way, that's where the press usually gets their information from too, so why have somebody else interpret and be your buffer? Just be your own, make your own independent decisions, okay?
All right, so all of these particular facts then go back into how to make a strong investment decision. If you can use these tools to analyze and qualify and red flag any potential misinformation that you're hearing, then you already are in the top one to five percent of all the property investors in Bali. Your best bet now is to look for somebody who isn't so savvy, who is watching the wrong YouTube channels with models and fancy studios and thinking that buying a property is all about buying a handbag or a Ferrari, and you can make a smarter, more data -driven investment decision by using some of these particular tips that I'm teaching and hopefully sharing with the world right now.
Why do I do this? What's in it for me? My business is in property management, and we always get left over with having to raise the, let's say, the stepchildren of developers and property owners that have essentially entered into a bad agreement.
When a developer, when an owner, comes to my company having essentially overpaid for a property that is probably a multiple over the fair market value, and they expect a 15 and 20 percent return on investment because the developer has failed to do that, I'm stuck with the situation of saying there's only so much we can do to actually get you the revenue, but you've entered the market at the wrong price. So I really don't have any incentive to see anybody enter the market at a high market value. I have every incentive to actually see that people enter in a lower market value.
That way, we can get a high return on investment for that particular investor. If you have entered into the market at a particular high value, then you're probably experiencing some distress right now, and this video probably won't help you actually get an unwitting consumer that will buy your property at a high price, but what I think you can do is play the long game. If you have entered the market in, let's say, a multiple above, do you realize you have 20 to 25 years to actually think about a particular strategy for your property now as a business and not as a frivolous purchase that you bought because you were happy one day and you wanted something to a show horse property, so to speak, right?
So this particular long view of looking at things allows you so much more time to then think about what is a correct business strategy. Offloading a property in Bali during a market turmoil is never a really good strategy, and I'll tell you why. It's because if you go and look at the property sale markets, which I'll show you right now, there are tons of people who are currently looking to actually offload their properties.
Rumah123 is perhaps the largest website right now for people looking to get rid of a Bali property. It's one of the largest websites in Indonesia for property sales, and we can take a look and see how that is going right now. It's not going very well.
The first thing you can do is probably go over here to the website and change it to English, so it makes it a little bit easier to read from our Bahasa Indonesia viewers right now just to talk about Bahasa Indonesia. All right, so once you've got that, you want to go and let's say you want to buy a property. You want the property to be in Bali, in Indonesia.
Okay, so apparently how many properties are for sale? There is 18,972 properties for sale right now. That number gets bigger every month.
If everybody's rushing towards the exits right now, we think that this particular plan might not be the best idea, so good luck. All right, this is it for this particular episode of the Bali Business Review with Market Insights from Jing. Once again, we want all our viewers to engage, comment, subscribe if you find some value in this.
Tell me if whatever you find is true or if you have some better facts and information. We're open to listen and share feedback. All right, see you on our next episode where we're going to talk more about insights that can greatly improve your chances of success in the Bali property market.
