Buying property in Bali is like planting a coconut tree. Some trees give fruit fast. Some take longer—but grow bigger. That’s the same with rental yield and ROI.
Many buyers confuse these two. But they’re not the same. Let us explain in simple words.
What is Rental Yield?
Think of rental yield like the juice from the coconut—how much money you get every year from renting your villa.
It’s the income from rent, divided by the price of the property.
Formula:
Rental Yield = (Annual Rent ÷ Property Price) × 100%
Let’s say you buy a villa for $300,000. You rent it for $30,000 per year.
Your rental yield is:
(30,000 ÷ 300,000) × 100% = 10%
That means, each year, your villa gives you 10% back from rent.
What is ROI?
ROI is more like the full coconut tree—how much you earn total after selling the tree.
Return on Investment (ROI) includes rental income, capital gain, and all costs like taxes, repairs, furniture, etc.
Formula:
ROI = (Profit ÷ Total Investment) × 100%
Example:
You buy a villa for $300,000
Spend $20,000 on furniture and licenses
Sell it after 5 years for $400,000
You made:
$400,000 – ($300,000 + $20,000) = $80,000 profit
So your ROI is:
(80,000 ÷ 320,000) × 100% = 25% ROI
ROI tells the bigger story. Not just rent, but also price growth.
Why It Matters for You
If you want fast cash, look at rental yield.
If you want long-term profit, focus on ROI.
In Bali, good villas give rental yield of 8–12% per year. But in areas like Canggu and Uluwatu, the land price grows fast too—up to 15% per year in some zones.
That’s why smart investors check both: Like checking the water before jumping into the pool.
So Which One is Better? It depends on your goal.
Rental Yield is great if you want monthly income.
ROI is better if you plan to sell the villa later.
Best plan? Find a villa that gives both. Like a tree that gives coconuts now, and grows taller every year.
Ready to Invest in Bali?
Start browsing our curated villas in Bali with high rental yield and strong ROI potential. We help you find the right one—whether for business or retirement.
