Invest in Indonesia: many islands, very few with demand.
Written by Nacho Jorrín, partner at Agmakina Group, building and managing villas in Uluwatu since 2019 · Reviewed 7 October 2026
Indonesia has more than 17,000 islands. For a foreign investor who wants to rent to tourists, the real list is short. Here they are compared, with what we know first-hand and what we do not.
A foreigner cannot hold land freehold on any Indonesian island, but can buy legally through a leasehold, a PT PMA company or a right of use. For tourist rental from year one, the island with established demand is Bali. We only build there.
First: how a foreigner buys in Indonesia
Freehold land (Hak Milik) is for Indonesian citizens only, on every island. That does not change from Bali to Lombok. There are legal routes, and they work the same across the country:
- Leasehold. You lease the land long term, usually 25 years with an option for 25 more, and the building is yours.
- HGB through a PT PMA. An Indonesian company with foreign capital holds the right to build. It makes sense at scale.
- Hak Pakai. A right of use for foreigners resident in Indonesia, designed mostly for living in.
Each route, with terms and costs, is in the leasehold guide. The core question is answered in can a foreigner buy property in Indonesia? and tax is in the tax guide.
The islands, compared
This is the picture of each destination for someone who wants to rent to tourists. It is not a beauty ranking: it is a demand ranking. We only give figures for Bali, where we have our own data.
| Destination | Tourist demand | Access | Who it suits |
|---|---|---|---|
| Bali | The highest in the country: 6.30 million international tourists in 2024 | International airport with many direct routes | Anyone who wants rental income from year 1 |
| Lombok | Growing, mainly around Kuta and Mandalika | International airport; many travellers go via Bali first | Long horizon and more tolerance for risk |
| Sumba | Niche and high end | Flights from Bali to Tambolaka, no direct link from Europe | Pioneer profile, no hurry to earn rent |
| Other islands | Very uneven | Depends on each one | Ask for first-hand data before trusting any figure |
Why we only build in Bali
An investment villa lives on someone booking it on a Tuesday in February. Today Bali has that year-round demand, and within Bali the Bukit in Uluwatu is where the coastline is scarcest. The numbers are in where to invest in Bali.
That does not mean the other islands make no sense. They are a different bet, with a different horizon. We compare them in invest in Lombok, Bali vs Lombok and invest in Sumba.
Five questions before you pick an island
- Do you need it to earn from the first year? If yes, the list shrinks to destinations with established demand.
- Who will manage it? Ask how many villas that company manages on that island, not on another one.
- How will you get there? If you plan to visit, count the flights and the boats.
- How would you sell it? In a market with few buyers, selling takes longer.
- Where does the yield you are shown come from? Ask for the breakdown. This is how we do it.
What people ask us most.
Can foreigners buy property in Indonesia?
Not freehold land. They can through a leasehold, a PT PMA company or, if resident, a right of use. The basic rules are the same on every island. We explain it in this guide.
Where is the best place to invest in Indonesia?
It depends on what you want. For tourist rental from year one, Bali, because that is where demand is: 6.30 million international tourists in 2024. Other islands are a longer-term bet.
Is it safe to invest in Indonesia?
It is if you buy through a legal route and check land, zoning and permits. The real risk lies in nominee structures and developers with no delivered projects. More in is it safe to invest in Bali?.
Do you build in Lombok or other islands?
No. Today we build and manage only in Uluwatu, Bali. That is why we can compare the islands without selling you any of them.
What does a villa in Indonesia earn?
In our Uluwatu portfolio the target is 10-14% a year, with the breakdown published. We have no first-hand data for other islands, and we recommend always asking for the breakdown of any figure.
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.