Long-Term vs. Short-Term Rentals in Bali: Which Strategy Wins in the Long Run for 2025 and Beyond?

Introduction

Bali’s rental market is booming, attracting property investors and entrepreneurs eager to capitalize on the island’s growing tourism and expat community. Whether you own a villa, an apartment, or a guesthouse, the big question remains: Should you focus on long-term or short-term rentals in Bali?

Both strategies have pros, cons, and financial implications, and what works best depends on your goals, risk tolerance, and operational preferences. In this article, we’ll break down the numbers, legal considerations, and profitability of both rental models to help you make the best investment decision for 2025 and beyond.

Understanding the Rental Market in Bali

Before diving into the long-term vs. short-term debate, it’s essential to grasp the current real estate and rental trends shaping Bali’s property market. Investors looking to profit from rentals in Bali must consider factors such as tourism growth, expat demand, and increasing property prices, all of which directly impact rental income potential.

Bali’s Ever-Growing Tourism Industry

Bali remains one of the top global travel destinations, welcoming millions of visitors annually. The island’s reputation as a tropical paradise continues to attract holidaymakers, digital nomads, and luxury travelers. The Indonesian government has also introduced digital nomad-friendly visa options, making it easier for remote workers to stay and work legally while enjoying the island lifestyle. This has led to an increased demand for short-term rentals in Bali, particularly in areas with beachfront access, nightlife, and cultural experiences.

The Rise of Expats & Remote Workers

Beyond tourism, Bali has become a magnet for expatriates, entrepreneurs, and remote professionals looking for a cost-effective, high-quality lifestyle. Many expats prefer the long-term rental market, opting for monthly or yearly leases instead of booking short stays. Locations such as Canggu, Uluwatu, Berawa, Pererenan, Ubud, and Sanur have become expat hubs, offering co-working spaces, international schools, and a strong sense of community. Investors who cater to this demographic can generate stable, long-term income from rentals in Bali without the high turnover associated with short-term guests.

Real Estate Prices & Investment Trends

As foreign investors continue to enter the Bali property market, land and villa prices are steadily increasing. In popular areas, real estate values have doubled in the past five years, making it more expensive to purchase rental properties. However, the rising demand for luxury villas, serviced apartments, and co-living spaces has also created high-yield rental opportunities. Investors must carefully assess which type of rentals in Bali—long-term or short-term—can provide the highest return on investment (ROI) based on their financial goals and risk tolerance.

With this market landscape in mind, let’s analyze the financial potential, operational challenges, and profitability of both long-term and short-term rental strategies in Bali.

Short-Term Rentals in Bali: A High-Risk, High-Reward Strategy

Advantages of Short-Term Rentals

1. Higher Income Potential

   • Short-term rentals in Bali generate higher nightly rates, especially in tourist hotspots like Seminyak, Canggu, and Uluwatu.
   • A well-managed villa can earn $5,000–$15,000 per month, depending on location and seasonality.

2. Flexibility in Pricing

   • Dynamic pricing allows you to charge premium rates during peak seasons (e.g., Christmas, New Year, and summer holidays).
   • Can adjust prices based on demand and competition.

3. Better Property Maintenance

   • Frequent check-ins mean regular cleaning and maintenance, preventing long-term wear and tear.

4. Greater Personal Use

   • Owners can block dates for personal stays or last-minute adjustments.

Disadvantages of Short-Term Rentals

1. Seasonal Income Fluctuations

   • High dependency on tourism trends, meaning off-seasons could lead to low occupancy rates.
   • Bali’s tourism is affected by external factors like pandemics, travel restrictions, or natural disasters.

2. Higher Operational Costs

   • Hiring property managers, cleaners, marketing teams, and maintenance staff can eat into profits.
   • OTA platform fees (Airbnb, Booking.com, etc.) reduce net income.

3. Stricter Government Regulations

   • Short-term rentals in Bali are under increased government scrutiny. Some areas restrict Airbnb-style accommodations, requiring additional licenses and permits.

4. More Guest Management Challenges

   • Frequent guest turnovers mean more work in customer service, complaints, and property management.
   • Bad reviews can hurt future bookings.

Long-Term Rentals in Bali: A Stable, Lower-Risk Option

Advantages of Long-Term Rentals

1. Consistent & Predictable Income

   • Monthly rent provides a steady cash flow, making financial planning easier.
   • No worries about seasonal fluctuations or occupancy gaps.

2. Lower Operational Costs

   • No need for daily cleaning, guest management, or marketing.
   • Tenants usually handle their own utility bills and minor maintenance.

3. Fewer Legal Complications

   • Long-term leases generally face fewer government restrictions than short-term rentals.
   • Agreements are typically straightforward and legally binding, reducing risk of sudden policy changes affecting your business.

4. Less Wear & Tear on Property

   • Fewer people coming in and out means less damage to furniture and property upkeep costs.

Disadvantages of Long-Term Rentals

1. Lower Rental Yield

   • Long-term rentals in Bali generate lower monthly income compared to short-term rentals.
   • A villa that earns $10,000 per month via short-term bookings might only bring $3,000–$5,000 per month as a long-term rental.

2. Less Pricing Flexibility

   • Fixed rental contracts mean landlords can’t adjust rates for high-demand periods.

3. Potential Tenant Issues

   • Some long-term tenants fail to pay rent on time or cause legal disputes.
   • Evicting problem tenants in Indonesia can be complicated.

Which Strategy is More Profitable? Breaking Down the Numbers

To compare profitability, let’s analyze a typical 2-bedroom villa in Canggu (one of Bali’s most in-demand areas for rentals).

Key Takeaways:

• Short-term rentals in Bali generate higher income but require more work and higher operational costs.
• Long-term rentals offer stability but lower profit margins.
• Hybrid Model: Some investors combine both strategies by renting long-term in low seasons and switching to short-term during peak seasons.

Final Verdict: Which Strategy Wins in 2025 and Beyond?

Both long-term and short-term rentals in Bali have unique advantages and risks, and the best choice depends on your investment style.

Choose Short-Term Rentals If:
✅ You want higher revenue and don’t mind actively managing the property.
✅ You have a property in tourist-heavy areas like Canggu, Seminyak, or Ubud.
✅ You’re comfortable navigating legal and regulatory changes.

Choose Long-Term Rentals If:
✅ You prefer stable, hands-off income.
✅ You own property in expat-friendly areas with high rental demand.
✅ You want lower legal risks and management responsibilities.

For 2025 and beyond, Bali’s rental market is evolving, with government regulations, tourism trends, and digital nomad growth shaping investment opportunities. The most successful investors will be those who adapt, diversify, and stay informed.

How to Maximize Profits from Rentals in Bali

No matter which rental strategy you choose—short-term or long-term—maximizing profits from rentals in Bali requires careful planning, smart investments, and effective marketing. Bali’s rental market is highly competitive, with new properties constantly entering the scene. To stay ahead and ensure high occupancy rates and strong returns, property owners must optimize their rental properties with the right strategies.

Here are six expert-backed ways to boost profitability from your rentals in Bali while staying compliant with local regulations:

1. Choose the Right Location for High Demand

The location of your property greatly influences your earning potential. Whether you’re targeting tourists, expats, or digital nomads, picking the right area ensures steady demand and better rental rates.

📌 Best Areas for Short-Term Rentals in Bali

Short-term rentals thrive in tourist hotspots, where travelers are willing to pay premium prices for convenience and access to attractions. The best locations include:

• Canggu – A trendy, surf-friendly hub with beach clubs, cafes, and co-working spaces.
• Seminyak – Known for luxury villas, nightlife, and high-end shopping.
• Uluwatu – Ideal for high-end cliffside villas and breathtaking ocean views.
• Ubud – Popular among culture lovers and wellness travelers looking for a peaceful retreat.

📌 Best Areas for Long-Term Rentals in Bali

Long-term rentals perform best in expat-friendly areas where remote workers, families, and retirees prefer to settle. The top locations for long-term rentals in Bali include:

• Berawa & Pererenan – Emerging expat communities with co-working spaces and international schools.
• Sanur – A quieter coastal town, ideal for families and retirees.
• Jimbaran – Home to luxury villas and high-end expat housing.
• Kerobokan & Denpasar – More affordable options for long-term living, close to local markets and business centers.

2. Optimize Pricing Strategies to Stay Competitive

One of the biggest mistakes rental property owners make is setting prices without a proper strategy. To maximize earnings, you need to adapt to Bali’s seasonal market fluctuations and adjust pricing based on demand.

📌 Dynamic Pricing for Short-Term Rentals

• Use tools like PriceLabs, Beyond Pricing, or AirDNA to automatically adjust your nightly rates based on demand, events, and seasonality.
• Offer early-bird discounts or last-minute deals to fill in gaps between bookings.
• Provide weekly or monthly stay discounts to attract digital nomads and remote workers.

📌 Long-Term Rental Pricing Strategies

• Review and adjust rent annually to keep up with Bali’s rising rental market rates.
• Offer tiered pricing options (e.g., fully furnished vs. semi-furnished) to cater to different tenant needs.
• Consider all-inclusive rent packages (including Wi-Fi and utilities) to attract higher-paying tenants looking for convenience.

3. Invest in High-Quality Furnishings & Amenities

To stand out in Bali’s competitive rental market, your property must offer an exceptional experience. Whether targeting tourists or long-term tenants, well-designed interiors and top-tier amenities will increase your rental’s value.

📌 Must-Have Features for Short-Term Rentals in Bali

• Private pools – A major draw for vacationers seeking a luxury stay.
• Fast Wi-Fi – Essential for remote workers and digital nomads.
• Air conditioning – A must-have in Bali’s tropical climate.
• Outdoor lounges & gardens – Enhance the overall guest experience.

📌 Key Amenities for Long-Term Rentals in Bali

• Dedicated workspaces or co-working areas – A growing trend as remote work continues to rise.
• Storage space & functional kitchens – Important for tenants planning to stay for months or years.
• Eco-friendly features – Solar panels, water filtration systems, and waste recycling appeal to sustainability-conscious renters.

By investing in premium furnishings and thoughtful amenities, you can increase your rental rates and attract higher-quality tenants.

4. Market Your Property Effectively to Maximize Occupancy

Even the most beautiful property won’t generate profits without a strong marketing strategy. To ensure high occupancy rates for rentals in Bali, use multiple marketing channels to reach potential guests or tenants.

📌 How to Market Short-Term Rentals Effectively

• List on top platforms – Airbnb, Booking.com, Agoda, and VRBO for maximum exposure.
• Leverage professional photography – High-quality images and virtual tours boost bookings.
• Partner with travel influencers – Social media promotions can increase visibility among tourists.
• Encourage guest reviews – Positive feedback improves your property ranking and trustworthiness.

📌 How to Market Long-Term Rentals Successfully

• Use Facebook Marketplace, Bali expat groups, and property websites to attract potential tenants.
• Offer video walkthroughs to showcase the living experience.
• Build relationships with relocation agencies and co-working spaces that assist new expats in finding homes.

A strong online presence will increase inquiries and bookings, leading to higher profits from your rentals in Bali.

5. Ensure Legal Compliance to Avoid Fines & Disruptions

Whether renting out short-term or long-term, it’s critical to follow Indonesian property laws to avoid legal risks. Non-compliance can lead to heavy fines or even forced shutdowns.

📌 Legal Considerations for Short-Term Rentals

• Obtain the necessary rental licenses (Pondok Wisata or Hotel License) if operating short-term stays.
• Pay tourism taxes and government fees as required by local regulations.
• Register your property with local authorities to prevent unexpected legal issues.

📌 Legal Considerations for Long-Term Rentals

• Use well-drafted lease agreements to protect both landlord and tenant rights.
• Ensure compliance with foreign ownership laws if you’re investing as a non-Indonesian citizen.
• Work with a local legal consultant or notary to avoid contract disputes.

Staying legally compliant ensures long-term business success and credibility in Bali’s real estate market.

6. Consider a Property Management Service for Hassle-Free Rentals

Managing rentals in Bali can be time-consuming, especially for foreign investors who don’t live on the island full-time. Hiring a professional property management company can save time, reduce stress, and increase profitability.

Benefits of Hiring a Property Manager:

✅ Handles guest check-ins, maintenance, and cleaning
✅ Manages marketing and online bookings
✅ Ensures compliance with local rental laws
✅ Provides 24/7 support for guests or tenants

If you own multiple rental properties or live abroad, a trusted property management service can help maximize occupancy and revenue while ensuring smooth operations.

The Key to Profitable Rentals in Bali

Whether you choose short-term or long-term rentals in Bali, the key to maximizing profits lies in strategic pricing, effective marketing, premium amenities, and legal compliance.

By implementing these expert-backed strategies, you can:
✅ Attract high-paying guests or long-term tenants
✅ Reduce vacancies and increase occupancy rates
✅ Scale your rental income sustainably over time

As Bali’s rental market continues to grow, staying competitive and adapting to market trends will ensure your success in the lucrative world of property rentals in Bali!

Final Thoughts on Bali Rental Investments

When deciding between short-term rentals and long-term rentals in Bali, there is no universal solution that works for every investor. The best choice depends on your personal and financial situation, as well as market trends. To make the right decision, consider the following key factors:

✔️ Financial goals – Are you looking for a steady, predictable income stream, or are you willing to take on some uncertainty in exchange for higher potential profits? Short-term rentals often generate higher returns during peak seasons but can be affected by fluctuations in Bali’s tourism trends. In contrast, long-term rentals offer consistent cash flow with lower vacancy risks.

✔️ Risk tolerance – Every investment carries a level of risk, and the choice between short-term rentals and long-term rentals comes down to how much volatility you’re comfortable with. Short-term rentals in Bali can be highly profitable but depend on seasonal demand and economic conditions. Meanwhile, long-term rentals provide financial stability but may limit your ability to adjust rental rates quickly.

✔️ Legal considerations – Understanding Bali’s rental laws is essential to ensure compliance. Short-term rentals may require additional permits, taxes, and regulations, while long-term rentals involve different lease structures and legal requirements. Failing to adhere to Bali’s rental laws can result in fines, contract disputes, or even eviction issues.

✔️ Personal involvement – Managing a short-term rental requires significant effort, from marketing and guest relations to property maintenance and compliance with local laws. On the other hand, long-term rentals often require less day-to-day management, making them a better fit for passive investors.

Given the dynamic nature of Bali’s real estate market, many investors are now adopting a hybrid approach, combining short-term rentals during peak tourist seasons with long-term rentals in off-peak months. This strategy balances risks, optimizes rental income, and allows investors to adapt to changing Bali tourism trends while maintaining financial security.

Whichever rental strategy you choose, having a solid grasp of Bali’s rental laws, tourism fluctuations, and financial risks will be the key to running a successful and sustainable rental business in Bali for 2025 and beyond.