Where the 10-14% comes from, line by line.
Almost nobody shows the breakdown. A percentage gets quoted and that is it. Here is the full arithmetic on a €110,000 villa: what comes in, what goes out on each line and what is left.
The full arithmetic on a €110,000 villa
Costs take half the gross. That is not our estimate: these are the four lines any short-let villa in Bali carries, with their percentages.
| On €110,000 invested | Pessimistic | Realistic | Optimistic |
|---|---|---|---|
| Target net yield | 10% | 12% | 14% |
| Annual gross income | €22,000 | €26,400 | €30,800 |
| Platforms: Airbnb and Booking (15%) | −€3,300 | −€3,960 | −€4,620 |
| Agmakina management (15%) | −€3,300 | −€3,960 | −€4,620 |
| Local PHR tax (10%) | −€2,200 | −€2,640 | −€3,080 |
| Operating: maintenance and utilities (10%) | −€2,200 | −€2,640 | −€3,080 |
| Annual net profit | €11,000 | €13,200 | €15,400 |
| Monthly net profit | €917 | €1,100 | €1,283 |
| Cumulative over 5 years | €55,000 | €66,000 | €77,000 |
| Cumulative over 25 years | €275,000 | €330,000 | €385,000 |
| Payback | 10 years | 8.3 years | 7.1 years |
Why a range and not a single number
Because a villa in Balangan and one in Melasti do not perform the same, and quoting a round number would be selling smoke. The 10-14% comes from real portfolio data and sits below what the portfolio does today. It is a cushion, not a promise: we would rather beat what we said than explain why we missed it.
What happens at year 25, with numbers
In Indonesia a foreigner buys on a leasehold. At the 25-year mark you do not lose the villa: you renew the land. Land is worth around 30% of the villa's value, so on a €110,000 villa that is about €33,000, and it is the only thing you pay for again. The building stays yours.
| The 50-year arithmetic (realistic case, 12%) | Amount |
|---|---|
| Net rental income, years 1 to 25 | €330,000 |
| Cost of renewing the land at year 25 | −€33,000 to −€66,000 |
| Net rental income, years 26 to 50 | +€330,000 |
| Total net over 50 years | €594,000 to €627,000 |
That is €110,000 turning into more than half a million over 50 years, even paying the renewal in the worst case.
And after tax, what is left?
If the villa is in your own name as an individual, income tax at home takes another 25-35% of the net. That leaves the 10-14% at 7 to 9.8% net-net. It is the same tax you would pay on rent from a property at home, so the comparison between destinations still holds. Through a Spanish company the total drops to 25%: we cover that in the tax guide.
What people ask us most.
Is the 10-14% gross or net?
Net, which is why the breakdown is above. When you see 20 or 25% quoted elsewhere, ask whether it is before or after costs: it is almost always a gross yield, which is not comparable with this table.
How long does it take to pay back?
Between 7 and 10 years depending on the scenario. The real average across our portfolio sits around 8 years, between the realistic and the optimistic case.
Who takes the 15% management fee?
We do, and it covers dynamic pricing, all three booking channels, cleaning, maintenance and guest care. We are the same company that built the villa, not a third party.
What is PHR tax?
The Indonesian local tax on accommodation, 10% of income. It is already deducted in the table.
The other guides.
Want it with your own numbers?
We show you the villas available, what each one earns today and what would be left for you, with our real figures in front of you. You talk to the developer, not to a salesperson.