Posted by PVL staff on Wednesday, 7. October 1998 at 13:25 Bali Time:
In Reply to: Agree, But! posted by Agung on Wednesday, 7. October 1998 at 09:14 Bali Time:
We would be interested in your 1,000-year lease formula. Foreigners without permanent residence here are still not allowed to lease at all (even if some lawyers say otherwise), and even for Indonesians leases are technically restricted to 25 plus 25 years. But there might be ways around, and as long as there is nobody to dispute it ...
Building costs vary widely. Labour and some materials are still relatively cheap but going up The Rupiah is at 9,700 today which means you won't get more than 9,000 for one US dollar which in turn makes building today about twice as expensive compared to a few months ago when you got 15,000 Rupiah and materials were cheaper.
You also get your measurements mixed up: 1 square meter is 11 sq.ft. Therefore, 3,000 sq.ft. is just 270 sq.m. We agree that it might be still possible to find a smallish house without air-conditioning, professional plumbing, imported fixtures etc on cheap leased land outside Ubud for US$ 30,000.
This is ok for someone who likes the house and plans to live in it. However, we would not recommend it as an investment because a) maintenance of low-cost houses is always expensive, and b) in our experience it is very difficult to rent out houses near Ubud and generate a good return - if that becomes necessary one day. Attractive year-round rental income can only be expected from prime properties on or at least near the beach where you pay much more than the figures you indicated just for the land alone.
Regards from Bali.