House Hunter: 'We want a buy-to-let property in Bali'

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THE PROBLEM

THE PROBLEM

Julia Riley writes: "I'm originally from Australia and my boyfriend Tom is British. We live in London for most of the year but tend to spend our winters in Australia as we're both freelance and can work from anywhere.

"We've both spent time travelling around the world but never imagined that one day we'd be in a position to buy somewhere abroad. Now that we can, we're not sure where to buy.

"Logically, it would make sense to buy in Australia but we usually stay with family when we're there so feel that it would suit us more to buy somewhere not too far away like Thailand or even Bali, where we've spent quite a bit of time.

"We love the laid-back atmosphere of both of these countries, the people, beaches and of course the climate.

"A base in the Far East would be perfect so that we can still spend a couple of months each year in Australia, but then we'd also have our own place not too far away where we can relax and enjoy the weather before coming back to the UK each spring.

"We would also hope to rent the place out for the time when we're not using it ourselves, as we do with our London flat, so the property we buy needs to be in an accessible part of the country and preferably in the main tourist areas.

"We've heard that buying in Thailand can be difficult, we don't know much about Bali, but we know it's possible so we would like some reassurance on this as well as some information on; how to go about it and what sorts of properties and prices we can expect."

THE ADVICE

Richard Eglinton replies: "For many years the market in Bali was restricted and buyers typically came from Singapore and Hong Kong. Now, people think nothing of travelling to the other side of the world, often organising the holidays themselves, and European buyers are starting to move into Bali.

"The other important factor is that prices in destinations such as Bali are so attractive. For example, a three- or four-bedroom detached villa right on the beach costs between £250,000 and £300,000. When you compare that with somewhere like Spain, especially the Costa del Sol, it represents really good value.

"We are getting two different types of buyers; the first (like Julia and Tom) have been to Bali and know the country well, so they want to use the place for themselves. The other group is the investor market, who wants the opportunity to invest in a more exotic location. Their view is that at some stage markets will equalise around the world so there is real growth potential there.

"Bali has changed over the years. It used to be a popular backpackers' destination. These days the former travellers are returning, but they are older, have more money and expect a lot more comfort. The terrible tragedy of a couple of years ago undoubtedly affected the country badly, but people now know that this can happen anywhere and there's a feeling that terrorism isn't going to prevent them buying.

"This is very much a speculative market, however. You're getting a lot more for your money but, without a track record of knowing what's happened to prices and without the infrastructure, you have to take the long-term view. There are some world-class developments here, but the downside is that you can't easily get local funding so this is a market for those with cash.

"It is mostly new-build but there are huge differences between standards of construction so buyers must be careful - we've no idea about construction standards of even a few years ago.

"There are also title concerns, as there are in Thailand - foreigners cannot hold the freehold of a property. But we advise buyers on the entire process and, if you are buying into a new development, everything is already set in place to enable foreigners to buy and has been thoroughly checked by international lawyers."

Richard Eglinton is group sales director for Elegant Homes Worldwide: 0800 310 1877, 0034 952 880 907; www.eleganthomesworldwide.com

THE SOLUTION

Property one: Villas on Bukit.

Price: Two bedrooms from US$198,000.

Agent's details: This small development consists of three two-bedroom villas and three three-bedroom villas, each with water features and spa facilities. Properties come with a guaranteed net rental return of 12 per cent a year. Located on the newly popular Bukit peninsula, the development offers easy access to many of Bali's "secret" beaches and famous surf breaks. The airport is 15 minutes' drive, as are the famous Jimbaran beach, and the international hotels of Nusa Dua. Prices include land, structures, high-quality hard and soft furnishings, paintings, sculptures and decorative items, swimming pools and shared facilities.

Property two: Villas near Nusa Dua.

Price: Two-bedroom villas from USD$250,000.

Agent's details: This is a development of two-bedroom, two-bathroom comfortable villas with a small swimming pool set in a beautiful garden. An excellent beach with water sports facilities in Tanjung Benoa is within walking distance and Nusa Dua is just 10 minutes away. The development includes fantastic on-site communal facilities.

Property three: Impian villas.

Price: One-bedroom from USD$390,000; four bedrooms from $860,000.

Agent's details: This development is made up of four-bedroom villas and one-bedroom suites with private swimming pools. The spacious suites are each about 120sqm, consisting of separate entrances, kitchens, and telephone and fax lines. Each suite sits on its own plot of over 400sqm. The four-bedroom villas have over 390sqm of living space with large garden, 20m swimming pool, and billiards pavilion. Prices include land, buildings and swimming pools, hard and soft furnishings and standard legal fees.

THE VERDICT

"These properties all look incredible and really remind us of the time we spent travelling around Bali and Thailand. We particularly like the idea of property number one which gives you a guaranteed rental return of 12 per cent. This is very good and the price is also so affordable.

"We are now going to find out more detail, for instance how long this guaranteed rental period is for, and exactly how the buying process works.

"We also like the idea of it having spa facilities as we're sure that this would appeal to anyone who was considering taking a holiday in Bali. Property two also looks interesting and we know the area around Nusa Dua very well as we have stayed there. We like the idea of having great communal facilities which would help let the place easily."

If you would like House Hunter's help, write to The Independent, 191 Marsh Wall, London E14 9RS, or e-mail: househunter@independent.co.uk

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