Back in 2006 when it seemed that we had found a buyer for "Riverbend", I searched the net for Bali properties and came up with a little beauty, a Hillside Hotel in the Banjar Hills in North Bali. It was advertised at the time at around seventy-five thousand euros (approx. AUS150,000). I came across it again when I was looking for hotel accommodation during my trip to Bali next month - here it is!I contacted the new owner (who is an Australian living in Canberra just "up the road" from us) to book a bungalow for five nights at the amazingly low price of 600,000 rupiah (that's approx. AUS15 a night). I told him that I had had an eye on the same property some 2-1/2 years ago and he said that he had bought it at about the same time - at a little below its asking price!
Not that this is a paying business proposition: even at the best of times (and these are not the best of times as tourists are staying away from Bali in droves and many hotels are empty), a 50% occupancy is about all a hotel owner can hope for. 4 bungalows x 365 days a year x Rp.150,000 a night = Rp. 219,000,000, half of which is Rp. 109,500,000 a year in income (not counting the restaurant). Electricity is probably around Rp. 12,000,000 a year. Three staff would cost about Rp. 15,000,000 a year. Minor repairs and maintenance and sundry bits-and-pieces is probably another Rp. 25,000,000 a year. That's a total of Rp. 52,000,0000 which leaves Rp. 57,500,000 (approx. AUS$7,000) for everything else: major repairs, running a vehicle, return on capital, etc. It's my guess that the Australian owner is losing money on the place!
Be that as it may, it's still an appealing lifestyle choice and he certainly was lucky when he picked up the place at the price he did. It must have been just after the second Bali bombing which was on the 1st of October 2005 when tourism and real estate in Bali were at an all-time low. It proves yet again how important it is to be in the right place at the right time!
P.S. Foreigners are not allowed to own real estate in Indonesia. While various schemes have been devised to get around this, none are without danger as these articles testify: Bali Villas Real Estate Fraud and Welcome to your second home in Bali, which you can not own or rent. And when things go wrong, they can go badly wrong - just read what Masa Fukuda, the Japanese ex-owner of this Bali property, put on his website. The ones who seem to have made off with the lot freely advertise the property on their new website at www.grandavenuebali.com.
