The Myth of Location: What Really Drives ROI in Bali Real Estate

so is location the only or the primary factor whether or not a short-term vacation rental property is going to be a success and Bal is all this hype you hear on the internet about location is leading you as an investor to pick a place that won't see long-term success if you want to know more stay tuned and find out here on Market insights with Jing on the B Business Review we're all going to shocking details and paint a more complete picture of what factors can be holistically considered besides just location I'm so glad that you

decided to join again and once again my name is Jing CEO of book of Vista here to talk about Market insights let's dive into the facts across YouTube over the past few days watching videos from two 3 years ago I noticed an oversimplification of correct investment principles and what the correct attributes are for making a quality investment decision here in Bali I'll begin with one of the myths that I keep on hearing as you go around to different YouTube influencers you'll hear this oversimplified statement that it's all about location you need to invest in this

location whether it's chongu Bing or ubid and everything else will fix itself anybody who goes online and says such I don't know at best it's misleading at worst it's hypocritical when somebody is just shoving down a false idea into your head should not really gain an audience and this is why location is of course important location is one of the primary factors but there's something more important and I'll give you the tools to make your own self assessment of high quality so here are the two tools that you need and there's just two simple questions

if anybody tells you location is great you should always seek by location here's your two qualifying questions to see if know what they're talking about first do you know anybody in that location who has failed in their investment second do you know anybody who's been successful choosing a location outside of the area that you're promoting if they can't give good answers for both you should stop listening and find another source of information because they're not knowledgeable about the importance or drawback of a location now I'll break it down step byep and tell you the facts

yes there is a concept called say the macroeconomic factors in determining a location that could be things like access is there clean and easy access into that area or is there congestion of course better access means better likelihood that people can visit your part of B number two is the social infrastructure are there enough things to do like places to eat shopping gyms cafes restaurants co-working spaces if there's social infrastructure it heightens the attractiveness and desire to visit the location Third level is cultural historical Heritage value are there any temples festivals DJs that adds attractiveness

to your macroeconomic factors why do I call those macroeconomic factors because those will benefit everyone in that location those will benefit you your neighbor and well everyone in that neighborhood but then what comes really next is the importance of the microeconomic factors of that location that's the specific details of the ring around your property what do I mean by that we have to remember that if you really want to gain a lot of investment value things like this will matter does your neighbor have animals that could interfere with the guest experience such as roosters or

pig farm that stinks or dogs that bark ceaselessly these will show up in reviews and deteriorate the microeconomic factors of your location does your location have terrible Wi-Fi access that might show up on the reviews and that can affect the segment Travelers willing to stain your property are there micro issues such as getting trucked in water versus getting piped in water other issues with a neighbor who has a loud or smelly place of business maybe somebody is painting I've seen this happen before I've seen people have Villas next to car repair shops or next to

glass cutting shops and the noise and chemical fumes deteriorate any possibility of a quality experience remember the zoning laws are often not followed and is possible to mix a local place of business together with your residential property and that might not be a nice feeling if it comes together so when you study location you have to ask yourself the macroeconomic but also the microeconomic factors this is probably why it might be a good idea to not buy Off plan of any development and go and see for yourself or at least get somebody who you trust

to go down there regularly and record videos at all times a day such that you can get a clear picture of the microeconomic condition there could be a prayer call or a Hindu festival happening very frequently that might affect that location you want to be clear about that once you've gotten over this difference then you need to go to the other question has anybody been successful by choosing an area that has not been popular yet the answer is yes this is how the most successful investors always get rich they go to an area before anybody

else knows about it they put down small amounts of money and when everybody else knows about it they get very rich this has happened constantly are you going to feel good being the first to invest where nobody has understand your risk potential upsides and downsides many of people have tried some have failed but some have seen resounding success the largest success stories I've ever seen were from investors who played their cards differently I'll go over a few classic examples that I've seen in my two decades of experience number one was the L Joya guys but

this was Eric from nce he's a French firefighter and he goes over to Bong on beach because he enjoys the beach and he decides to lease not buy lease a large piece of land that was about a Hector behind another large piece of land now the piece of land in front of him had Direct beach access he did not have beach access he would have to have his guest walk over his neighbor's land that's risky for many reasons number one it's risky because it's in a new location number two it's risky because he doesn't have

access to the beach however what happened later was remarkable he found out the owner of the land was the hartono family the hartono family had no plans on developing they were keeping that land available as a land bank and he went uninterrupted for almost 30 years in Bali he made a fortune renting out his Resort we know it because we were the managing partner for his Resort for four years so this is a type of risk taker who saw no popularity before the area was popular and then really pioneered this space the second extreme example

I can think of was of course the founder of Aman Resorts Adrien Zea Adrien always goes to locations before they're popular he talks with government officials implants one of his $2,000 a night Resort he makes a killing every time from bringing his brand to locations before they're popular it's his judgment his choice that defines the value of a location these two folks are interesting they're not the rule more the exception but if you want the highest return on investment you need to accept there's risk and that's not just with land and Bali that's with hedge

funds any investment you could focus your Capital into you're going to come upon this simple principle I just wanted to make sure it's out there we've talked about clarifying this misconception that many investors have GL now let's go to the king if you stayed with me this is the great part this is the hidden secret location isn't the correct understanding what is highly valuable land then what is it what is the idea what must have are you ready it's the guest experience the guest experience in B is King the guest experience determines whether or not

a location will be powerful and the guest experience can only be built with two factors you need a location and a design put both together to create an incredible guest experience and thereby creating the high value high yield return on investment that you see every success case I've seen in 20 years where the investor understood this did fantastic if you don't believe me look at beach clubs there are many different types of inali they're all in good locations they're all next to the beach but why is it that the enduring beach clubs that do very

well year after year such as fins such as Potato Head what do they have in common not only do they have a great location they seriously think about the guest experience fins is always thinking about the Family Market about the bread and butter they're thinking about what they can add to create a theme park experience Potato Head focuses on music they focus a lot on the design and the appreciation of music and they build a very unique strongly branded strongly attributable recognizable iconic architecture and design to their Beach Club and so appreciation that each owner

has of both the location and the design combined together to create a successful does that mean their neighbors are going to do well no if you look at the neighbor to the left and the neighbor to the right fins and potato head I don't think anybody knows who they are but it's never just about location in Bali it's about a guest experience location is half of it and design is the other half maybe you are in a location not popular yet if that's the case and focus on design focus on creating a design that is

so seductive that is so alluring that so compelling that people will have to visit you if you need help use references with these days on AI or just simply find other locations throughout the world that have already been popularized with an idea and just bring it to B that's a great idea of how to you can borrow design if you're in a strong location and you think that's good enough I'm sorry to say that that would be very unfortunate if you had already gotten 80% of the way and neglected the last 20% on failure to

craft a design the design doesn't necessarily need to be too radical or anything but it should be distinguishable it should be different enough than what your neighbors are providing otherwise you will find yourself in high competition with everybody else who is also in the same location trust me you do not want to be the last person to build the Mediterranean white style villain anymore it's very abundant be the first to build an ecolodge that is built from Titanium or some other exotic material you might find that could be what people are really craving for so

once again don't be fooled and don't be misled by YouTube influencers with no experience location is not that simple location Plus design equals a fantastic guest experience the secret for high return on investment in B this is Jing for Market insights and the B Business Review if you have feedback or want to question this line of thinking I've tested this idea out with every success case and every failure case that I can remember in Bali which has been in the the hundreds at least this is my insight subscribe comment if you like this and we'll

keep on producing and we'll see you at the next episode [Music]