Building In Ubud

Derek Barkas

New Member
May 28, 2017
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Greetings everyone
Total newbies in here, So a massive HI and a Thankyou in advance for any assistance tips or advice passed our way!
Ok : we are selling all we have to relocate to our beloved Ubud / Bali .. and pursue some ideas.
We have several business ideas to develop but the main core of the move is to build a home ( part block and part reclaimed joglo/ gladak or similar , together with a couple of gladak rentals on same plot of land .
Having trawled forums, websites, social media etc there never seems to a concrete way to do this. What I'm reading is we will need to source and register a specific IMB for bed and breakfast or is that not needed as part of our home?
Also we're seeing conflicting views on building regarding trust and reliance of local trades.
I'm from a design build background and very knowledgable on contractual methods , which will help , but I'm reading there are still going to be challenges .. this Is also ok and I'm prepared for this . Payment terms and contingencies etc will be firmly adhered to and never up front after first payment which will cover costs only for materials . BOQ will be pre agreed as will the basic structure.
The land we are intending to rent for 20-30 years with legal notaris involved including legal checks to avoid loopholes etc.
Our intention is to rent a property and " land" in Bali for a good few months to research meet and appoint relevant parties . No rush !:)
It may be we find a house we like with land and develop the gladaks or guest extensions as we go..
we will employ local friends to run the whole thing with us in background .

So I guess , What I'm asking is this,
Anyone with experience of running guest rooms in Bali as part of their home?( Air band b for example )
-Taxes ( we will run the B and B and all businesses remotely from Europe and pY taxes there)
IMB type and legalities
Best internet speed and supplier Ubud
How much electricity.. 7000 kw enough?
Anything which should be on our radar which I've not covered here?
All advice both the positive and negative gladly accepted !
Best wishes
Derek
 

spicyayam

Well-Known Member
Jan 12, 2009
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You will need a commercial IMB and some kind of accommodation licence to run a BnB even if it is in your home. You need to pay hotel tax here in Indonesia.

Indihome (by Telkom) works well for us for internet. 7000kw possibly enough, obviously depends on the number of rooms, appliances etc.

I would be curious as to why exactly you want to run a B&B in Bali?
 

Markit

Well-Known Member
Sep 3, 2007
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Karangasem, Bali
Excuse me but at what stage do we (in an advisory position) say "Mate you have no fucking idea what you are doing/planing or wanting" ?
I'm all for helping people but this chap has it all sorted but not the tiniest idea what to do....

I don't always want to be the bad-ass so can someone else please start it out (Spicy you are such a fucking pussy!) please.

The lack of information or understanding here made me initially think this was a joke! Please let that be so because MATE you will lose everything you have if you carry on like this and that would be a terrible waste - better just send it to me. The outcome for you will be the same but for me NOT.

PS. where you are going to make your vast fortune is call AirBnB not Air band b :0) ... fantastic! I stand in awe
 

spicyayam

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Jan 12, 2009
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Well we were all new here once. I still remember @Markit how you shot down my first or one of my first posts on this forum :) I don't disagree with what you are saying but it would be nice to see people hand around for more than one post.
 
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Derek Barkas

New Member
May 28, 2017
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Well that was a friendly Intro into the forum I must say. Spicy Thankyou for your response. That helps :)
I'll choose not to use the words in my head out loud and won't respond in the manner which Markit has chosen or stated from high upon his ivory tower.
I will only repeat ; we have little info on how to make things work or go forward in Bali ( understandable I reckon coming from Norway ) , which is why I chose to join which I perhaps wrongly thought was a friendly group , go figure !?.
We have a vision and we are working toward that very very carefully by researching , talking to others both In the real world and in forums who actually DO make a life in bali via Air BnB in very much the way we are planning.
What a great shame
 

Derek Barkas

New Member
May 28, 2017
6
0
1
You will need a commercial IMB and some kind of accommodation licence to run a BnB even if it is in your home. You need to pay hotel tax here in Indonesia.

Indihome (by Telkom) works well for us for internet. 7000kw possibly enough, obviously depends on the number of rooms, appliances etc.

I would be curious as to why exactly you want to run a B&B in Bali?
Hi There
Thanks for your kind response.
This is what I thought .
The idea sprang firstly that we run a very successful Airbandb here in Norway and know European friends in Bali who do the same . Which appears to be a viable option.
If there are pitfalls or legalilities we have to navigate so be it unless we're looking at huge investment costs , then we will reconsider.

Have a good un
D
 

Derek Barkas

New Member
May 28, 2017
6
0
1
Excuse me but at what stage do we (in an advisory position) say "Mate you have no fucking idea what you are doing/planing or wanting" ?
I'm all for helping people but this chap has it all sorted but not the tiniest idea what to do....

I don't always want to be the bad-ass so can someone else please start it out (Spicy you are such a fucking pussy!) please.

The lack of information or understanding here made me initially think this was a joke! Please let that be so because MATE you will lose everything you have if you carry on like this and that would be a terrible waste - better just send it to me. The outcome for you will be the same but for me NOT.

PS. where you are going to make your vast fortune is call AirBnB not Air band b :0) ... fantastic! I stand in awe

I couldn't be more pleased you stand resolute in your awe MATE
 

spicyayam

Well-Known Member
Jan 12, 2009
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I think you really need to sit down and run the numbers. In Norway you probably own your property so you can potentially sell it for a profit later on. In Bali you will be renting the land, so not much if any profit can be made there and might be difficult to get your money back if you decide to sell.

I remember one case when someone rented a house and they built a small Balinese gazebo on it. When the lease expired the rentor wanted to take the gazebo with them, but the owner refused and said it now belonged to him.

If you plan to work in the business, you will need a working permit, which could cost around $2000 a year for each person. You are also very restricted in what you can do. If the visa is for management, you can't for example cook in the restaurant if you have one, or make the beds.

Imagine you build your business and then get reported to immigration and get deported. I am sure other forum members can share stories of this happening.

When you add up all the costs of establishing the business, lease, construction, furniture etc and the ongoing expenses such as electricity, water, salary etc, I would be surprised if you can turn a profit, not to mention paying yourself a comfortable salary to live in Bali.

If you have money to invest, invest it in your own country, use that income to come to Bali and have a nice, relaxing holiday :)
 

Markit

Well-Known Member
Sep 3, 2007
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Amen! What he said. Spicy you are no longer a pussy...

Derek your post would have required a doctoral thesis sized answer to even glide over most of the points you were wrong on.

Better if you start at the beginning: "Can I own the land I want to invest my money it to make a rental villa?" Maybe...

Then go from there because everything else you plan evolves from the answers to that question and what you then decide to do.

Leasehold - Spicy above
Freehold - accept a certain risk and "danger"
Where?
How big?
 
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Derek Barkas

New Member
May 28, 2017
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Spicy this helps, thanks again.,

Markit may well be right that we do not have all the areas covered.Its a process and this is step one.I actually agree.
As with all plans, one slowly and carefully works toward ta goal, this is part of the process, asking for assistance, advice and guidance from those who have done this before.In forums such as this.
We have no problem at all reviewing our plans and our "boundries" to fit within the Indonesian law, indeed that is paramount to all this.
Money is not the issue right now but of course is very important so we don't end up heading home robbed.
We have already sold our property here and have the finance in place, and rightly the last thing we wish to do is sink that into a non-viable equity or break any kind of law, or be fleeced by than less than honest people.Something we hear a lot about.
Which is where we are now. Sitting on cash with a couple of business ideas. What i didn't mention is we will not rely solely on an income from the guest house scenario. I have a very successful design company which I run here in Norway which takes me around the world, so its not important where my base is as long as I have internet.This will be a large part of our living wage.
We also have some creative ideas for furniture, interior goods and the suchlike which we hoped to develop with local artisans and ship world wide. Again something we have experience in.
Since this post we have contacted our Scandinavian friends who over the past 5 years have run a VERY successful business based on ALL these platforms, so hopefully we will get their perspective in addition to yours.

If Bali is not the platform for any of this we wont do it. very very simple.
Thanks
 

Derek Barkas

New Member
May 28, 2017
6
0
1
Amen! What he said. Spicy you are no longer a pussy...

Derek your post would have required a doctoral thesis sized answer to even glide over most of the points you were wrong on.

Better if you start at the beginning: "Can I own the land I want to invest my money it to make a rental villa?" Maybe...
i was to understand you cannot, as a foreigner, own ANY land.

Then go from there because everything else you plan evolves from the answers to that question and what you then decide to do.

Leasehold - Spicy above


Freehold - accept a certain risk and "danger"

Where? ubud
How big?
1000m2 or thereabouts
 

ronb

Well-Known Member
Aug 14, 2007
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Ubud, Bali
Responding in part to the original questions
So I guess , What I'm asking is this,
Anyone with experience of running guest rooms in Bali as part of their home?( Air band b for example )
-Taxes ( we will run the B and B and all businesses remotely from Europe and pY taxes there)
IMB type and legalities
Best internet speed and supplier Ubud
How much electricity.. 7000 kw enough?
Anything which should be on our radar which I've not covered here?
We have a villa in Ubud we rent out - it is separate from where we are living. Mostly it has been long term rentals but over this last Xmas New Year period we did vacation rentals via Airbnb. My impression is that Airbnb has their system well organized and reach a good balance between owners rights and renters rights. However, one of the last Airbnb rentals we did, they booked for 3 weeks then said after 3 days that smoke from a neighboring property was a health hazard and they wanted out. Airbnb dispute resolution sprang into action and because we were a bit slow, they settled in the renter's favour quite quickly. So my warning is that some renters are playing the Airbnb system and getting away with it. We are back on long term rental without using Airbnb and are happy.

Internet is Ubud - Telkom's Indihome is good - don't even consider a property where Indihome is not available..

Electric - rough figures are swimming pool may need 1000 or 1500 watt, each aircon wants 350-500, other stuff like fridge etc add a bit more. So basically you need to count the aircons.

Hope that helps.
 

ronb

Well-Known Member
Aug 14, 2007
2,241
56
48
Ubud, Bali
Spicy says
I think you really need to sit down and run the numbers. In Norway you probably own your property so you can potentially sell it for a profit later on. In Bali you will be renting the land, so not much if any profit can be made there and might be difficult to get your money back if you decide to sell.
I think you are overly pessimistic. Derek mentions renting in Ubud for 30 years. Land values in Ubud moslty go up, so if he started now with a 30 year lease, then wanted to sell the developed property in 10 years with still 20 to run, the value will probably be up - but who can really predict property markets.

Spicy also says
If you plan to work in the business, you will need a working permit, which could cost around $2000 a year for each person. You are also very restricted in what you can do. If the visa is for management, you can't for example cook in the restaurant if you have one, or make the beds.
But Derek already says he plans to use a local as the front for Airbnb, so all this about work permits is a bit off topic. Many expats operate rentals this way and they mostly don't have trouble with immigration. On this forum Markit and others say to anyone outlining their dream, that's stupid, why would you want another XXX in Bali, etc etc. But then I look around at lots of the businesses that seem successful, and expats are involved with many. So something doesn't add up.
 

tel522

Active Member
Oct 30, 2015
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Bear in mind also , a lot of expats lose their shirts ! in this in this island , I have known a few over the years .
regarding property renting , because of substantial over capacity here room rates have "hit the floor" , the bali tourist market is generally going down market hence the substantial increase in chinese tourists , ya its a cheap destination .

Ubud is holding up with reasonable room rates , but whether that would be profitable considering the massive land costs there im not sure , in the south the house and land market has collapsed -50% + , will ubud follow ?

From my point of view Bali is not so interesting anymore for tourists except at a low market level, ie the costa del sol of asia .
 
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Markit

Well-Known Member
Sep 3, 2007
9,317
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Karangasem, Bali
Markit doesn't say XXX is stupid just people coming along with the brilliant idea to open a resto/cafe/potmie shop/bar: those are all stupid. Not because they don't sell stuff but because everyone that's ever thought about living anywhere else had the same idea to open one of those "because that's easy", well that just aint so. To have a cafe, resto or bar is the hardest living you will (possibly) make.

Pot Mie is fecking easy but you just can't live from that and I'll bet you get reallllll tired eating Pot Mie.

I've seen lots of clever people come and go and if there's anything they had in common it was some money and a level head for what they wanted to do. How did it all go wrong? Lack of preparation, lack of understanding how hot it actually gets here when you have to clean the house/bar/resto and it's 33C in the shade and lack of understanding of how the locals are - good and bad. They will be your workers.