Are Lombok and Sumba the better investment opportunities?

For years, Bali has been a hotspot for generating solid income through property rentals. Not every tourist prefers staying in a hotel or resort — many enjoy the privacy of a rental private villa shared with family or friends. This demand has fueled a booming villa rental market. But is that still the case?

Rising land prices in Bali have made it increasingly difficult to invest in rental villas. In popular areas like Canggu and Uluwatu, investors are often limited to small plots of land due to the high costs. As a result, many villas now offer just two bedrooms, a rooftop terrace, and a small garden pool. The days of building spacious villas on plots over 500 m² are long gone, especially in high-demand locations.

Most investors today work with leaseholds of 25 years. One year is typically lost to construction, followed by the years needed to earn back the investment. At a 10% ROI, that alone takes about ten years. Then comes the issue of lease renewal — a cost that must be planned for. Ultimately, only a few years are left to actually generate profit.

When we look at properties being offered in places like Lombok and Sumba, we see a different picture. Villas within beachfront resorts, including management services, are being sold with lease periods of up to 80 years — a much longer window to recoup and grow your investment. Plus the investor benefits from the increase in value of the land.

What’s more, the high property prices in Bali are now pushing investors to explore these alternative islands. Lombok, for example, was off most investors’ radars for years, but that’s quickly changing. For around USD 150.000 to 200.000, it’s possible to purchase a beautiful villa with strong rental potential.

And it’s not just investors showing interest — tourists are also increasingly exploring these destinations. That means demand and occupancy rates on Lombok and Sumba are expected to rise significantly in the coming years.

Curious about what Lombok and Sumba have to offer?

Explore our current listings on www.indocasa-properties.com – where you’ll find a wide range of off-plan beachfront villas at attractive prices and general information about these islands.