Why Ubud is a Great Location for Your Investment
Are you looking to build a little something for yourself in a place where the chances of running out of customers are slim to nil? Ubud is a great location for your investment for a host of tangible reasons, namely that its population and economy are on the rise – with both set to continue rising for the foreseeable future.
Ubud’s ecotourism sector is well established, and its upmarket developments have made it a hub for affluent locals, expats, and tourists with relatively deep pockets. Adding to Ubud’s investment appeal are the area’s low costs. Land and real estate, while not the cheapest in Bali, bring some of the best returns on the island. If you intend to run a business, you can expect costs like insurance, staff, local ingredients, licences and utilities to be much more affordable than they are in the West.
So, what’s the best way to invest in Ubud? Below, we look at the benefits of investing in real estate, hotels and resorts, bars, and restaurants.
Building Real Estate in Ubud
A dream property in Ubud costs a fraction of what it would cost in nations like the USA and Australia. While areas of Bali with large populations of expats and tourists can be pricey, Ubud remains affordable despite being known for its upscale offerings. You can also reduce the cost of real estate by purchasing land and building your property.
As this stunning town’s population, economy and appeal are still on the rise, you can expect a handsome return on investment in high-quality real estate. According to a report by ILA Global Consulting, it’s fair to expect a 15% ROI on real estate in Ubud, potentially more if you develop a sustainable villa.
Building a villa in Ubud is more straightforward than you might think. Companies like Balitecture offer a range of pre-designed luxury villas that can often be tweaked according to your preferences. On top of handling land acquisition and property construction, Balitecture offers villa management services, ideal for those interested in the rental market.
Essentially, by partnering with a reputable property management company, you can build and manage your own dream home without having to lift a finger or even be in the country. And if you don’t occupy the house, you can generate income through rental income from Ubud’s thriving luxury tourism scene until you’re ready to sell your real estate for a potentially significant profit.
Hotels and Resorts in Ubud
If you’re up for the challenge, opening a hotel can be a lucrative way to invest in Ubud’s ever-growing tourism industry. Besides the financial incentives, opening a resort or hotel in Ubud comes with the flexibility to target a wide variety of niches. Ubud’s luxury tourism sector is growing, and there’s no shortage of ecotourists who visit to explore the region’s natural beauty.
Just as with owning and managing a residential property, you can hire hospitality management companies to oversee the day-to-day running of your hotel or resort. Businesses like Supala Hospitality and Impi Hotels offer services ranging from asset optimisation to staffing solutions. There are also plenty of management companies that provide land acquisition, architectural design and construction services.
Naturally, managing a hotel in Ubud is somewhat more challenging than investing in real estate, but you don’t need to do the heavy lifting alone either way. Moreover, given Ubud’s thriving, growing and diverse tourism scene, running a hotel or resort has the potential to yield a significant ROI – and quickly.
Before putting your capital at stake, do your research. Ubud’s tourism industry may be thriving, but the local hotel scene is highly competitive. Major players like the Viceroy Luxury Hotel already enjoy stellar reviews and mass appeal. But that’s not to suggest Ubud’s hotel sector is ‘full’ – there’s room and demand for plenty more.
Bars
Plenty of expats carve out a space of paradise for themselves by opening a bar in Ubud. With a constant stream of tourists coming and going, there’s almost no risk of the customer base running dry – provided you know how to lure them through your doors (where the drinks can run dry at your benefit).
On top of it is much cheaper to buy and rent both residential and commercial property in Ubud than in comparable Western destinations, and covering costs associated with labour, utilities, licences and insurance is also much more affordable.
Moreover, just like with homes and hotels, there are management companies that can do a lot of the heavy lifting on your behalf, from marketing and promotion to staffing and stocking.
Of course, running a bar in Ubud involves keeping an eye on the competition. There are plenty of new customers to go around throughout the year, but establishments like Pinstripe Bar in Ubud have already established themselves as hotspots with tourists and locals alike. Operating a bar can be a highly profitable venture, but you’ll need to pull out all the stops to make your establishment stand out.
Bars
If you’re more interested in serving food to families than drinks to partygoers, investing in a restaurant in Ubud might be a smart move. Because this growing town attracts tourists from the far corners of the globe, you’ll have plenty of choices when it comes to deciding which cuisine to serve.
As with operating a bar, running a restaurant comes with ongoing costs such as insurance, ingredients, stock and staff. However, all those cost a fraction of what they would in the West. For example, USD 200 per month is a typical wage for bar and restaurant employees.
With a diverse tourist scene, some with deeper pockets than others, you can open a budget-friendly or premium restaurant in Ubud and have a shot at turning over a tidy profit. However, like with all investments, you need to be aware of the risks and challenges. When it comes to Ubud’s food scene, competition will be one of your biggest challenges.
Nevertheless, if you can crack the formula that some popular Ubud restaurants have, you could make a small fortune while living the high life in Ubud. And, plenty of companies here offer hands-on assistance in the form of staffing and management solutions. They may slightly increase your outgoings, but they enable you to maximise your output and save a lot of time and energy.
Conclusion
In conclusion, Ubud is an exceptional investment destination, providing a special fusion of varied options and growth potential. The combination of lower operational costs, high returns on investment, and the availability of local management support makes it easier for investors to tap into Ubud’s potential. While competition exists in the hospitality and dining sectors, the constant influx of tourists and the growing expat community ensure a steady stream of customers. By carefully considering your options and leveraging local expertise, you can create a profitable investment while enjoying the rich culture of Ubud.
Need More Expert Guidance in Buying Property in Bali?
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