Bali lease ROI calculator: what the remaining term actually costs you

Two villas, same price, same rent, same village. One has 45 years left on its lease and the other has 19. Every Bali calculator we could find prices them identically. This one does not.

Nothing you type here is sent anywhere. The calculation runs in your browser; if you then send an enquiry, the figures travel with it so that whoever replies is not starting from scratch.

What the three headline numbers mean

Cost per year of use. Price divided by horizon. For a lease the horizon is the remaining term; for hak pakai and HGB it is 80 years, being 30 + 20 + 30 under PP 18/2021 articles 52(1) and 37(1). This is the number that makes two listings comparable, and it is the number the market does not publish.

The 80-year horizon is for hak pakai or HGB over State land. Granted over someone else’s freehold, either runs at most 30 years and is renewable only by a new deed (PP 18/2021 arts. 52(3) and 37(2)). For that structure, choose leasehold and enter the years left on the grant — that is the honest model of it.

IRR over your holding period. The discount rate at which the rent you collect plus what is left when you sell exactly repays what you paid. Cash flows are: the price out at the start, the rent in each year, and the residual in at the end. If the right expires before your holding period ends, the rent stops with it — which is the case the tool handles and the spreadsheet you built at the kitchen table probably does not.

Value still in it when you sell. Straight-line: price multiplied by the proportion of the horizon still unused. A model, stated plainly, and simple enough to check on paper.

Three deals, run through the same arithmetic

All three assume the same rent of USD 24,000 a year and the same ten-year hold. The only things that change are the price and the structure. Every figure in this table is produced by the same code that runs the calculator above — the build fails if the two disagree.

Read the first two rows together, because they are the comparison the market actually puts in front of you. Same price, same rent, same village. The 19-year remainder costs USD 15,789 per year of use against USD 6,667 for the 45-year lease — and after ten years the first has 47.4% of your capital still in it against 77.8% for the second. On IRR the gap is 3.5% against 6.3%.

The third row is the one that surprises people. Hak pakai at a price 25% higher returns 5.4% — lower than the 45-year lease, because you paid more for the same rent — while leaving 87.5% of your capital intact. Whether that trade is worth making depends on whether you are optimising for the next ten years or for the next forty, and the calculator will not decide that for you. It will only stop you from pretending the question is not there.

The model, in full

Published because a calculator whose workings are hidden is a marketing device. A direct competitor in this space describes its figures as estimates synthesised from public market data using AI research, and gives no sample size and no sources. Here is ours instead, and you can reproduce every number in a spreadsheet.

• Horizon — for a lease, the remaining years you entered. For hak pakai and HGB, 80 years: 30 initially, 20 by extension and 30 by renewal, under PP 18/2021 articles 52(1) and 37(1). Over someone else’s freehold the term is 30, renewable by deed (arts. 52(3), 37(2)); model that as a lease.
• Cost per year — price ÷ horizon.
• Effective years — the lesser of your holding period and the horizon. A right that has ended does not produce rent.
• Residual — price × (horizon − effective years) ÷ horizon.
• Cash flows — minus the price at the start, plus the rent in each effective year, plus the residual at the end.
• IRR — solved by bisection over 200 iterations on the bracket −99.99% to 1000%. Where there is no sign change in that bracket the tool says so rather than reporting a number.

The assumption to argue with

Straight-line decay is the choice most open to challenge, so here is the case against it and why we kept it.

Real leasehold markets do not decay in a straight line. Elsewhere in the world, short leases fall away faster than proportionally, because the pool of buyers shrinks and financing dries up first. If that holds in Bali, a short remainder is worth less than the straight line says, not more. Straight line is therefore the conservative direction for the point this site is making, and it has the considerable advantage of being checkable with a pencil.

We do not apply a curve because applying one would require Bali resale data by remaining term, we do not have it, and neither does anyone who has published a number. Inventing a decay curve and calling it a model would be exactly the thing the methodology page exists to refuse.

This tool will sometimes tell you a deal is worse than it looks, and we are paid the same either way — a fixed fee per enquiry, agreed in advance, unrelated to whether you buy. That is the only reason a calculator that talks buyers out of purchases can exist.

Using this to weigh an investment rather than a single listing? What sets a Bali investment case beyond the yield.

What to do with the answer

Three things, in order.

Run the other listing too. The number is useless on its own and decisive in a pair. If two properties are within 15% of each other on cost per year of use, the term is not what separates them and you can go back to arguing about the pool. If one is double the other, you have found the real difference.

Check whether the extension is real. If the price you are paying assumes an extension, the residual above assumes it too. Whether that assumption holds is a question about the drafting, and the three grades of extension clause is where to start.

Ask for the remaining term as a date. Not “about twenty-five years”. A commencement date, a term, and the document that evidences both. Everything on this page is downstream of that one number being right.

Questions about the calculator