EPISODE 18:
Bali Property: Off-Plan Buyer Checklist
(Avoid These Common Mistakes)

00:31
So today we’re talking about if you ever bought or considering to buy off plan in Bali through a major developer or smaller developer, what are smaller developer, what are the things you should look out for? Problems, credibility, construction and permits, financial safety and payment terms, all those kinds of things. We’ve done a bit of a checklist which we will put on our website later and we’ll just run through the points briefly now with Omri. Yeah. Yeah. All right. So welcome to Bali Business Club.

00:57
You forgot to say that. There we go. Just a quick piece of information before We have a website. No one knows about it. It’s BaliBusinessClub.com. At the moment, it’s just a glorified version of what YouTube has to offer. I mean, probably not even glorified because there’s no comments and whatnot, but just you can find all the podcasts that we’ve shot on the website. but the podcast. We have a plan for this website and we are going to be adding in the next coming weeks, months, years, a lot of resources,

01:30
whatever resources we’ve used in the past podcasts or in the upcoming podcasts. For example, right now I have on my iPad here basically the structure of this podcast, which is basically a bunch of questions that we’ve prepared. So those questions are going to be shared as a list on the website and there will be a bunch of other great things to be resources on the website as well. So if you want to check it out, it’s BaliBusinessClub.com and there will be more things to come. We’ve got a good guide,

02:10
actually a property investment guide. We’ve got this checklist. We’ve got like four or five things we could put up there. All right. So we’re back obviously with Omri and myself, Gawain. And today we’re talking about buying off plan in Bali, everything off plan in Bali, everything you should and should not do and things you got to be really cautious of. We were speaking to a couple of buyers of some big property developers, developments last week and developments last week and they were just like, what

02:36
kind of checks and balances have you put in place before you bought the property? And it was quite surprising as to how little these people had done. So we decided to do this. Yeah. And also have you ever bought off plan? Have I? Yeah. No. I bought once actually many years ago. Have you? Yeah. In Cape Town. In Cape Town. Yeah. I sell off plan. I don’t buy off plan. No I was just wondering. I’m a developer myself. I bought once and it put me off. Oh yeah? Buying. Yeah. It was many years ago. I didn’t know.

03:00
You’re keeping secrets from me, my friend. I do. Not the only one. Yeah. I hope so. Before we move forward quick introduction, I’m Omri for the new viewers, for the new viewers, I’m the CEO of Kosong Satu Group We run a bunch of companies here and a lot of them are in real estate. I’m an investor myself I invest a lot in private equity and real estate. As far as real estate is concerned we are operating a real estate fund called TheKedunguFund.com You can check it out. If you’re interested in investing in Bali without

03:27
all the issues you can get from investing in real estate if you want something very relaxed and safe, this is the right place for you to go. We also have a real estate agency in Kedungu as well KedunguRealEstate.com We develop villas as well. So this is us. Alright, okay. Let’s dive in. So, what are we talking about first? Where do you want to start? Well, let’s start at the top. Let’s start at the top. Developers credibility. So, we meet a lot of people that’s of people that invest in Bali, whether they

03:56
invest with us and, or somewhere else, a lot of them invest in have a variety of variety of, of investments in Bali. Sometimes land, some for land banking, sometimes they build villas and sometimes they buy off plan from a developer. I have people also that bought off plan from me. And so I’m also on the other side as a developer we always kind of hear the same issues, we thought it would be interesting to have a podcast that, you know, talks about that the questions you may ask yourself or the question

04:30
you should as the developer before actually jumping into some deal or contract with anyone Bali is a little bit of, it’s not a mature market. It’s still in the making It’s still in the making there’s hundreds, if not thousands of developers out there a lot of them are great, but some of them are not so great. So it’s important that you guys have the right tools to be able to, you know, start an investment and feel safe about it. First question you need to ask yourself, who is the developer? If you

05:00
see some ad on Instagram or Facebook or any social media or in the street, lots of billboard, in the streets it’s not because they have a billboard in the Canggu shortcut that they are legit. It doesn’t mean anything. So you need to ask yourself “who is the developer?” The first thing you do is do your own research do they have a track record in Bali do they only have renders or most of them only have renders because most of them have not yet built anything. And this is a little bit dangerous it doesn’t mean you shouldn’t

05:30
go for it. Sometimes it’s okay, but you need to, you know, do your due diligence. Yeah. And the most important thing there is also just to add, who are the people behind it the directors, the shareholders. Internet is your best friend here. So go and Google them as much as you can check the names check on LinkedIn look if there’s any social media posts that talk about them, whether on, you know, Facebook, Instagram, Reddit, you name it go and check. This is something I always do. Go on their website

06:02
If you type in Google, for example, domain name, “whois”, there’s a bunch of website that offer that service. you arrive on some website like whois.net for instance, and you type or domaintools.com You type in the, website of the developer and they will tell you a bunch of information. Especially, when the website was The website domain name was purchased. So if you’re talking to a So if you’re talking to a developer that says on the market for 10 years and the website has been done last month that is, it can be worrying.

06:32
Another thing that’s for those geek out, geeks out there, you can also check on waybackmachine. like way back, go way back and just Google it., you’ll find the right link and you, this is a website that takes snapshots of all the websites in the world at in the world at different point in time. You go on KosongSatuGroup.com our company, you will see on way back machine. You will see what the website looks like now and you will see what the website looks like at the different snapshots. So last year, the year

07:04
before the year before and so on and so forth. So you can see also the evolution of the website of the developer. And I think that’s a pretty good way to see what they are, who they were before, if anything. The more information you get, the safer you will feel and the more chances you have to not make a mistake down the road and send $200,000 or 300 or more to some shady dude, yeah. Another good thing also is to ask them for, so when you talk to them, you say, okay, I would like to talk to one of your

07:31
buyers or two or three of your buyers, previous buyers. Hopefully they, it’s not only their friends and family. So we have, you know, can talk to people that are a impartial and ask them, you know, a thousand questions, how the process went and a bunch of things. So you have a better idea of who you’re dealing with. I think reviews would fall in there. So check every review platform from Trust Pilots Yeah, yeah, Trust Pilots Google And so on, yeah. But reviews are sometimes easy to fake. Sure. So unless the developer

08:01
So unless the developer has a thousand reviews, if you have like, 15 reviews, it’s, you know, it’s very easy to fake. It’s always good to do it, but it’s not, it’s not bulletproof, yeah. But it should draw a whole kind of picture. If you do all of these points, you’ll get a picture that will kind of illustrate where they are and who they are and what they’re doing. And not everything, not every single point is bulletproof, but as a overall, it should draw a picture. Correct. Okay. So well, let’s

08:27
assume that step has been green lighted, that developer is legit. There’s no skeleton in the cupboards. What would you define as a legit developer? Like how many developments, how many years? Most developers are under five years old for sure in Bali or post COVID, I would say legit is the opposite of not legit. So if you find something sketchy the rest is legit. If there’s nothing sketchy, you can move forward with the next steps and checking all the other things. But I mean, there’s no, there’s

08:59
no definition of legit. Not legit, but I would say new. I think everyone has their their tastes for risk. And as much as for example, you might not, for example, you might not, your definition of legit in Cape Town or in France or in the States might be something, it might be different here. So it’s I mean, it’s up to the discretion of the investors to decide that but I would say for that next step, for that first step to being green lighted if you haven’t found something specifically sketchy about it, then you

09:32
can move to the next step and keep doing your due diligence, yeah. What’s next? Land and legal. Legal due diligence. This is the one thing you must do and is not done by yourself. This is done by a notary. So the reason we put it there. I mean, it seemed pretty obvious to me, but. But it’s not then, yeah. We talked to our friends couple of days ago, we won’t name him, but he knows because he will watch this. Hi, Alex. I think you just know it really well because you do a lot of land transactions. So

10:02
it’s something essential. But if you’re buying off plan and it’s through a reputable developer, people just like, Oh no. Yeah, but that’s the thing there’s no, I mean, how many, how many reputable companies have gone belly up or have have gone belly up or have done some sort of misleading clients or anything, you know not not a hundred percent kosher, yeah. Of course there’s more chances that if you go to Mira, Oxo, all these guys, Coco it’s all going to be okay. Yeah. However, regardless you have no excuse. I mean

10:32
it costs nothing, you know, it’s costing a couple of hundred dollars, you know, to do the due the diligence by a notary. You should do it. You would do it when you, it’s in your old country. There’s no reason you shouldn’t do it here. So whoever the developer is a huge developer or it’s a tiny little small one. You need to do the due diligence on the actual land because this is what the notary does. And you need to do it with your notary, not the developer’s notary. So if you don’t know any notary, call me.

10:57
Or watch our previous podcast. We did a whole podcast with a notary. With notary Semilir, yeah. We can hook you with her, if you want. Please do not accept the notary from, whoever you’re buying from, the notary should always come from the buyer and not from the seller. This is a number one rule because there are still unfortunately some corrupt notaries in Indonesia and you don’t want to be in the case, where you know, they are playing you for some reason. So due diligence, what will they check? They will

11:28
check the land zoning. They will check the title of the land title. So all the So all the documents are called, it’s a certificate here. they will check that the land has not been collateralized by a bank. So the owner gets some sort of loan or whatever they will check a bunch of things, that all the documents are all proper. One thing in Bali with the certificates in, I would say 50% of the cases when I invest in some land or with the fund for instance where we invest in land, 50% of cases the documents are

12:05
missing something and a lot of those cases have to do with inheritance. So when the land is in the name of the father or the grandfather and the transition paper, the inheritance paper, the heirs have not done because there’s a fee attached to it. So they just delay and don’t do it. So the title is still in the person’s who passed away. It’s okay for the title to be in someone else’s name, as long as you have a letter proving that the heirs are the rightful heirs. That letter is in many cases missing.

12:36
And the land is in many cases in the father’s name or the grandfather’s name or whoever. Yeah. So there’s a bunch of things that the access is that the access is very important. Road access. Super important. What is the access? Is it a bike access? Is it car access? Is there the possibility to do U-turn at the end? I have this problem in my house at the moment It’s been a hot topic around the office last week. Exactly. Is it secured? Is it legally secured. you need to ask all these things. Parking. Yeah.

13:03
Parking and so on and so forth. What’s next on my list? I’m gonna refer to this. Construction and permit. So before it was called IMB, now it’s called PPG and SLF. So this is the building permit. There are a lot of developers that are not applying for the proper permit. They think, they can get away Some will with applying at the end of the project where the law specifically stipulate that the permit should be sort of PPG should be applied for at the beginning of the project. It’s not a deal breaker, but

13:40
you know these are things that you need to be aware of and you run this by a notary, you ask if it’s okay or not. But the big issue with there’s a park in Ubud was a, was a construction permit, no? Yeah. They had they had a problem with the construction permit. I mean that was a big problem. It’s a big problem and they closed it. The place is massive. Yeah, yeah, yeah. And a lot of investors must have freaked out. Yeah. Because there’s a lot money invested in that project. And there was a permit issue

14:08
amongst other things. It’s solved now. So yeah, getting your permit wrong can be big problem. Construction timeline with realistic milestones. Okay. So. Yeah. Which is important. It’s very important because the national sports here in construction is delays So you have acceptable delays because of Ramadan, because of rainy season, like this year, the rainy season was completely crazy. So every project, I mean, it, it rained three months in nonstop. So all the projects, including ours had been delayed because the

14:44
workers couldn’t work as fast as they normally do. And that’s okay. But you need to ask yourself and ask the developers what is the plan in the contract if there is delay some developers including some big names, which I won’t name They have a clause that explains about delays and there is penalties for that. There should be a penalty. Sure. Absolutely. For sure. Your cash is getting tied up Exactly. So yeah, some developers, they do everything to, they can to not pay the penalties, which I think is very unfair. I mean,

15:16
it’s, you know, it’s a game, but it is what it is. So you should be, should be careful with that. One thing you should not do is never sign the handover document. If the penalties have not been acknowledged and agreed upon beforehand. What do you mean agreed upon? So you have contract that says the property will be handover in March, 2026, for instance, if there’s three months delay and they tell you “okay, here’s the keys. Here are the keys and can you sign the handover form?” If you sign the handover form, it’s in lot of

15:49
the handover form. They, it kind of like annuls everything that happened in the past. Yeah. So you gotta be careful with that. They are smart. Yeah. They have lawyers, better lawyers than you. They’ll do everything to work themselves out of the delay penalty. So make sure that you have the penalties, I mean, signed, and agreed upon by the developer and the transfer, if not the transfer already done before you sign the handover paper in case, the handover paper have a clause that cancel any sort of

16:19
wrongdoing in the past. Yeah. I mean delays or whatnot. So be careful with that. Yeah. Insurance. Is the building insured? Every property in Indonesia should be insured. If you’re buying a villa there are two things. Yep. There’s the insurance once you have the keys and when it’s yours and this is your normal property insurance. And then there’s a construction insurance. So the one thing you want to ask is do they have insurance if something goes wrong Earthquake. Earthquake any force majeur stuffs.

16:55
If something breaks, if someone dies. if whatever you know They need to have an insurance and you want to have a look at the, at this insurance. So don’t feel shy to ask for the insurance paper on the construction. They should give it to you That’s interesting. And then there’s the insurance for the property, which don’t, it’s not on the developer side. It’s on you. Once you have the keys of the house or the villa or the apartment, it’s unless it’s an apartment building, which is already insured

17:26
by the developer it falls upon you to ensure your own property. It’s fairly cheap in Indonesia. I think for a normal like two, three bedroom house, you probably pay anywhere between 200 and 500 dollars a year. Deposits. Financial safety. Financial safety and payment tips. How does it work when you buy off plan. So there’s whole kind of payment structures out there. We do something, other people do other things. I don’t even remember what we do exactly. It’s usually around 30, 40% upfront. Usually 10%.

17:57
Yeah, so, you have a 5 or 10% like right out of the bat to lock the deal in. Yeah. So this so they stop marketing, the property and then within the next once you, so you do your due diligence and this takes two weeks, one month, whatever within that time frame, you have to pay 30 or 40% of the total costs. Okay. And then you have installments until the end of the project. Okay. What you want is keep a 5 or 10% the last installment of 5 or 10% that you want to keep for a while after the handover

18:34
the project in case something is For after the snag. Snag. We’re going to talk about that. Snag don’t exist. It doesn’t exist here, yeah. It doesn’t? Yeah, it doesn’t. So this is a great business idea that we had. I love to do it, but I don’t have the time. So if anyone wants to do it the snagging business is something you can get in my opinion, very, very rich on in Bali. It’s getting somebody to stay in the property, do all the snag lists, do all the for like two weeks after the keys are handed over.

19:05
What I usually do on the villas that I build is I have someone friend or staff or whoever who stays in the villa for a week. Actually experience the place and see, Slams the doors and kicks the bed. No, what I meant by snagging, like a proper snagging business is, they have this in Dubai, for instance, you have companies that, snagging companies. So they, they go to property and they check all the construction tech, technical stuff. Um, and then there’s a checklist, like it’s huge. Yeah. Okay. They have

19:39
apps on, they come with the iPad and they say, okay. So they have a whole bunch of tools to check your humidity, to check the density of the cement, to Oh okay, technical, yeah. Yeah, technical things But it doesn’t exist here in the country where construction is a big question mark. If anyone wants to do it with us, call us. We already I already have the Excel sheets. worked on this. Okay. So back to this, um, where are we? So yeah, financial term. So yeah, you should have, you should keep like a 5-

20:14
10% at least until building permits are completed, completed, because they will be completed after the handover. It takes sometimes six months I’ve I just wrote today for a building permit for a house I built in Babakan two years ago. A year and a half ago. Yeah. Which isn’t still not done. So it depends how much work they have at the, you know, the government office and whatnot. But that 5% has to be negotiated upfront before you. Yeah, absolutely. Yeah. It’s your last installment, basically. Okay. Yeah.

20:47
Because that’s not advertised. It’s never advertised that if lost. I mean, some, some do it. Some don’t, no one wants to do it. Obviously. But we’re not talking to developers here. We’re talking to buyers. That’s interesting. I didn’t know that either. Okay. Another thing you should ask since we are talking about this is, uh, how long, and this, that should be in the contract, how long the developer guarantees the construction. So usually one year is good. Six months to one year. So if you are in the place

21:18
and something breaks, who does it fall upon to, to fix it? If it’s, uh, something structural, I mean, hypothetically, it should be the developer, right? But then there’s a limit in time, obviously, because of the wear, the normal wear and tear of any building. So, I mean, six months, one year, I think it’s good. Uh, whatever the duration, it’s always good to include a rainy season in that timeframe. And this is something you can absolutely, negotiate absolutely, negotiate with the developer on the

21:49
spot. It’s not, you don’t have to, you know, a rainy season as in mold. I mean, mold flooding, leaking in the roof and, 20,30 % of properties here will have an issue in the rainy season. Especially, I mean, this rainy season, I mean, to be very transparent, some of our properties had, had issues because it, it was too much water, you know? But Bali also is just, it’s hard on places. It’s hard on, uh, accommodation, the humidity, the environment, the rain, the wetness. The weather in Bali generally

22:23
is very harsh. It’s harsh. Because you have, you have extreme heat, and then you have extreme, uh, water, uh, humidity, and then you have salt from the ocean. So, all of these, the build, the house, they don’t like that. No, they don’t like that. It takes strain. You can see. Yeah, absolutely. Yeah. Financial terms. Oh, bankruptcy. How do you protect against bankrupt? I don’t know if you can, really, but, this is a tough one. You’re gonna knock on his door. Yeah, ask for your money back. It goes back to

22:56
point number one. Uh, you know, you gotta, you gotta do your due diligence on the developer. If you’re investing your money in, with a smaller developer, this has to be part of the risk ratio that you are, you accept, uh, as an investor. Yeah, the more boutique the development, the higher the risk for things like bankruptcy. Yeah, Absolutely. Okay. So, anything else here? Oh, escrow. I know this is a big thing in land transactions, but deposits into escrow. I don’t know if it’s necessary. Yeah,

23:27
I mean, you’re the, yes and no, because when you buy off plan, uh, it, it can go into escrow. It’s no problem, but it is not going to stay in escrow. Because the whole point for a developer to sell off plan is to leverage the buyer’s money to build a place. Yeah. In most cases, we do it. So for a developer, off plan is a dream come true because basically the only expense they have is acquiring the land and the architecture, the architectural work. So let’s say, you know, it’s, it’s, it’s very minimal.

24:04
And a lot of people, most people now, that’s since COVID, before COVID off plan was way cheaper. And now it’s the norm. I mean, I have personally, I have never sold a house built. Every single villa that I have sold is off plan or half built. I’ve never finished. I’ve always sold them before I finished them. You know, It’s so much more capital intensive, you know? Yeah, yeah, exactly. So, uh, you can ask, I mean, escrow is not really relevant in that case because, you whilst you do your due diligence,

24:37
sure. No problem. So if the developer is asking for like, uh, I don’t know, 20% down payment, upfront, that is okay. No problem. But you put it in the escrow account on the notary. Until I do this. until the due diligence is green lighted and then it’s released to the developer so he can enjoy it and go to the Bahamas with your money or finish your building. So what are you exactly getting? How do you need to deliver fully furnished or finished or bare? Uh, so this is, this is an interesting question.

25:07
Interesting with finishings also because renders what you get in a render render is not always realized. It’s tricky. Yeah. So one rule of thumb, as far as I’m concerned, a lot of my friends, they come to me and they show me renders a company of a villas or whatever or apartment buildings. and say “Omri should I buy it?” before even look at the deck of the developer and the actual proposal that they have. I look at the render in the, if the renders are bad quality, chances are the building won’t be top-notch.

25:41
Right? Because if you as a developer don’t put a lot of attention and love into your marketing material, what are the chances they’re going to put some love into the building that you’ve already bought? So they don’t care anymore. I agree with that. But it’s going in the other direction these days, as in AI is getting so good with giving good renders that might not be 100% accurate. So you think you’re getting a mahogany finish. They’re not doing it. They’re not using AI. They are using a little bit

26:14
more, not so much the technical renders, but more of the marketing scene setting, you know, sitting by the pool, for closeups and, and, and beyond. It’s getting more and more and it will be more and more for sure. that’s the, if you Have some, if you get some sketch up renders, run away because it means this guy don’t, they’re trying to save money on a, because like to do a proper render, like a ultra realistic render by outsourcing and technically correct and technically correct. It costs a few

26:47
thousand dollars and some developers don’t want to spend it. So they just do in-house sketch up, sketch up, do okay renders, but not amazing. So this is, this is important. Now let’s move on from the quality of the renders to something else. You need to ask the developer are the renders contractual? So do if there is a, if you see a render of this and there’s this beautiful frame from my friend Pedro from La Posteria, quick Shoutout, who does this this art, you need to ask if that in that render

27:25
you have La Posteria’s poster, you need to ask the developer, will that be in the, in the handovered property or is it just for the decoration for the render? I mean, this, the lamp, the plants and so on and so forth. So basically when you’re buying something, are you getting what you’re seeing and is what you’re seeing in your contract and actually in good developers, and I know some of them do, I’ve seen Oxo do it, and I’ve seen all the contracts from other developers. You should have an inventory of

28:01
every single item that’s included in the property at the handover. So I’m talking toilet paper here. I’m talking forks and knives and glasses and, and bedsheets and stuff like that. So this is something you should be aware of because if you, you get your property and then there’s a bare minimum, you’re going to, you’re going to have to spend more money to make it livable. And that’s not cool because this is not what you were sold. So yeah, Material specifications or finishings. That’s tricky. I

28:35
mean, how do you, how do you know what floor finishings are you going to get? Because you look on a render, it looks like a wood veneer. Sure. But you want a teak. Yeah. Okay. So that’s a good point. You need in every project, there is, or there should be an interior designer. Okay. Interior designers have moodboards and they have a material list. I forgot the name. There’s a name for it. So basically, you know, you have, we have an interior design company and I Anais is running it. So basically

29:09
on every room you have the list of items, including that room. And then you have the exact material that’s being used and they usually some brand reference. So for example, if it’s a, I don’t know, for example, here it’s wood. So it’s probably Bangkirai I guess. So it’s written, it should be written Bangkirai, wooden floor with that tone. 95 Exactly. So you should ask for that. I mean, don’t, don’t be shy to not ask. Don’t, don’t trust your developer man. The developers, once you’ve paid them, they have

29:49
no incentive to deliver something better than what they told you. And, and if you’re missed on a point for sure, they want to, you know. Because there is for sure quality fade or scope creep on these developments, especially the bigger ones, you know, you look at the thing and then they kind of cut and save little costs here and there on the finishings. Of course. I mean, wherever they can cut costs, they will. It’s, I mean, it’s fair game, you know, it’s business, you know, but then, you know,

30:21
the problem is like, it’s, it’s the difference between expectations and what you actually get. Many memes, they will. Yeah, exactly. Okay, so next point, I let you read the title, my friend. Okay. So ROI, we’ve discussed this in, I think two, three podcasts. We did a podcast specifically dedicated to that. Supply and demand. Actually, that was the last podcast, wasn’t it? No, it was like two, three. It was like the supply, demand ROI. So we did a podcast on ROI, the relationship between oversupply, I mean, of supply

30:55
of villas and ROI. So when there’s an oversupply of villas, the ROI is low and then it’s a trend and it’s a cycle that goes like, like a DNA element, you know. And so it’s, you should be aware of it. So definitely watch that podcast so you understand what we are talking about here. But basically the way developers will sell you is by promising will sell you is by promising a high ROI. All of them will do it. It’s fair game. They’re not going to tell you, we have no idea how much you’re going to

31:32
make, you know. So they tell you, you’re going to make 15 percent ROI, net ROI, or 20 percent or 12 or 30 or 27 or whatever number. Yeah. So you have to understand, and we’re not going to, we’re not going to talk very long on this because we did that podcast. So you should definitely watch that podcast. But you have to understand that you, what is promised is not what you will get. And that’s 100 percent sure what is promised may be an average of what we will get over 10 years or five years or whatever. But it’s not

32:07
going to be what you will get every year because it’s cyclical. So sometimes the villa market is favorable for a rental and sometimes it’s less favorable. So your ROI will go up and down along the years. If you’re in here for the long game, it doesn’t matter at the end of the, you know, you have averages and you will make your averages, which is hopefully what the developers promised. But a lot of developers are basing their ROI on one or two years of experience only. Or worse, one of two years of

32:45
experience that they have not experienced of other people. And because we are in 2025 now, a lot of developers in 2025 are basing their ROI numbers on anything between COVID and now, which were the crazy years. I wonder if there’s a way that you could hold your developer, because a lot of them do the management themselves. If you could hold them accountable to the numbers they publish. Some kind of clawback or something. Yeah, some do. Some give you a guaranteed ROI. It’s in the contract, yeah.

33:22
Not always, but some do. Which is, I think If they’re doing the management, it’s… Yeah. I think it’s dangerous. I think it’s completely preposterous to do it. I mean, you have no way to guarantee it because you have COVID, you have a bunch of stuff. But there would be a forced majeure or something you could put in there. Or just some kind of tiers where you charge less of a management fee if you don’t hit certain kind of… As an investor, I’d be more comfortable. But then again, I know the market

33:50
here. But I would be more comfortable in a developer that is honest with me. That tells me, “Look, this is what it is. This is the situation. That apartment building is in Uluwatu or in Kedungu or in Seminyak, whatever. We think we’re going to make that much money based on past years, based on historical data surrounding the building. I don’t want to give you false hopes. I don’t want to give you fake expectations, wrong expectations. But it should be around that money.” But a lot of them are like, “Yeah,

34:25
you’re going to make that much money.” So if you talk like that, you must pay if you don’t do it. Yeah. So anyway, anyway, watch that ROI Podcast. You will understand better how things work here on this island. Occupancy rates, averages daily rental. It just must stack up, I suppose, as far as Airbnb, DNA, REID, which is an aid to do those reporting and property management reports. So it just has to be logical, I suppose. Another thing we need to talk about is are there any hidden costs down the line?

35:00
So after handover. So and that should be in the contract as well. What does it imply to have a property managed by the developer or by a sister company of the developer? Is there like monthly costs? What are they? Are they the building taxes, the land taxes, who is paying for it? So you should be very, very careful with that. How much are you going to pay in your monthly expenses like property, maintenance and security and parking guy, whatever. Yeah, exactly. Pool maintenance made. So these are questions you

35:51
should ask yourself before, or ask the developer at least. Who’s managing the rental? So management company usually if you buy off plan, that development will usually do the management, rental management. No, sorry. Not necessarily because we are, it’s true. The with the big developers. Yeah. It’s true with the big developers. If you’re thinking Mira, Oxo, Coco, and so on. If it’s three or four villas, no. Yeah, exactly. What I would do as an investor is I would be okay with the developer managing

36:20
the villas. It kind of makes sense, especially if it’s in a cluster of properties like an apartment building or a cluster of some. But you need to have the options to get out also, to be able to choose your own property. I know some of the developments won’t even let you these days. You have to. Well, I mean, at least ask. You must know what you’re getting into because you buy the property and then you have to use them as a development, as a management company. But then ask also if they refuse, ask yourself

36:50
and ask them why. What’s the reason. So it can be legitimate, but it can not be as well. Okay, yeah. So exit strategy and resell flexibility. Okay. Are there any resell restrictions? If you buy a property within a development, like a bigger development, there might be some resell restrictions. So of course, your interest is that there aren’t any. So it’s up to you to check that. Make sure that it’s aligned with your expectations and with your acceptance of what’s happening down the road. You need to have, and this is

37:29
very important and you notary should make sure that you have it. Most of those properties are leasehold. So you need to be able to sublease the property. Otherwise you’re stuck with it. In most contracts, in order to In Indonesia, most contracts when you sublease the property, you need to inform the owner of the land or whoever is on top. So the person you sublease the property from. I mean, the person you lease the property from and when you sublease it, then you need to inform that person. Be

38:06
careful that in the contract it’s written to inform and not to ask the permission. Those are two different things, right? Important differentiation. Do Does the developer offer a platform or support when you resell the property? What’s happening there? Maybe there’s a marketplace or they have their own marketplace. Or an agency. I know some and it’s more and more, our good friend Pierre Geonet. Good developer. A great company to invest. So check it out. Geonet. G-E-O-N-E-T. I like to promote friends.

38:51
They are doing fractionalized hotel rooms, fractionalized properties and a lot of hotel rooms. So there’s also that exit strategy some developers offer. So yeah, I mean, there’s many things to ask. Cool. So then after sales and handover. So we touched on that a little bit before. What warranty is provided on construction and finishes. So typically six to twelve months. We discussed before. Snagging, who handle the snagging and defects repairs after handover. Are they responsive to previous buyers after

39:28
delivery or do they disappear once the sale is done? Yeah. I think the bigger the developer, the more chances you have of having someone to help you with whatever issue you may have. But it’s not a rule. I mean, I always help my clients even if it’s bust. The bigger the developer, they always want the resell. They always want another sale into the next development of this. Whereas if it’s just a one-sorfer, they don’t really care. You know, the in and out. But you would want to nurture your clients. Yeah, of

40:07
course. Yeah. Communication and transparency. So all your questions. I mean, this is more of a soft measure, but all your questions answered correctly and promptly. And they’re trying to rush you or use pressure selling tactics, which is a big thing. Yeah. Sales agents love that globally. It’s not a Bali problem, but they do do it here in Bali. It’s like, oh, those units finish. There’s five guys lining up. Four more. Yeah. Pay the deposit right now. I’ve ten clients. Yeah. I would buy it myself. If you’re not

40:39
buying it, I’m taking it myself. This is classic. Yeah. Yeah. So yeah, this definitely, just quickly say something about that. Do not, I’m going to get a lot of haters here. Oh no. Do not trust real estate agents. Trust real estate agents have zero empathy and they don’t care for anything except the 5% commission they are getting or 2% or whatever it is. They don’t just don’t trust them. That’s it. There’s no, I know I’ve seen many real estate agents. That’s a broad statement. It’s a broad statement. Some

41:18
of them are okay. Some of them are. There’s some really good agencies around. But idea, no, I’m not talking about agencies, but real estate agents work for agencies. Yeah. So you have to be reputable within the agency you work in. It’s a cultural thing. But they want to make the sale. Of course. They don’t make the sale. They don’t eat. So it’s a question of survival. And you are a mark. And they work only on commissions or mainly commissions these days. Only commissions. Yeah. So exactly. They don’t make the

41:51
sale. They don’t eat You know, so don’t trust everything they tell you as soon as you feel there is, they trying to bullshit the bullshitter, it’s a red flag. Or just give it to me It’s a deal breaker because they’re in their nature, but it’s a little red flag. So just make sure you, you are okay with those red flags. Or just give them this checklist and tell them to come back to you when it’s finished. that’s why it’s also great to talk to previous buyers because you have, you may start to draw a good

42:22
comprehensive picture of who you’re dealing with. And also in reviews, if you look at reviews, you know, Trustpilot, Google and so on and so forth. Okay. And then the final one, I suppose also a bit of a soft measure and you have to do a little bit of the legwork yourself, but finding out what’s going on around you. Really important in Bali, we’ve actually discussed this in a previous podcast. You know, what developers next door to you? Is there going to be a bar or a nightclub? What’s the zoning?

42:50
Is there a hotel going to go up? You know, we’ve discussed a couple of the properties next to Atlas and those kinds of nightmares. So I think you need to be aware of that. Speak to community, you know, that kind of thing. Yeah, exactly. I mean, again, there’s a whole podcast on that called Seven Key Tips. When you buy a property or something like that, we’ll put the link in the description. But yeah, there’s a bunch of things you need to be aware of your surrounding being the most important. So

43:25
whenever you think, oh, I made a great deal and the view is amazing. There are two red flags in here. Great deal. And the view is amazing. So be careful of deals that are too good to be true. Are too good to be true. So there’s no reason for anyone to do a too good to be true deal when, you know, the market is thriving and there are clients for normal prices. So just ask yourself this question. Why? Why your deal would be amazing. You don’t need to make an amazing deal. Make a deal you’re happy with

44:06
that will make good money. But, you know, whenever your greed takes, you know, go on top of your reason, this creates a problem. So be careful with that. There’s not too good deals. Too good to be true. It doesn’t exist here. So that’s one thing. And the view, so second part of the sentence views in Bali tend to disappear if you if you if you have a view. So you need to ask yourself about the view, like what you’re looking. But also what happens if someone if not even if the view is not amazing, you know, what

44:49
happens is someone builds right in front of me. OK, so I’m not talking about like a magnificent ocean view here. But if someone so you have you don’t have lights anymore. So the one question you want to ask the developer is and they will probably bullshit you about it. But at least you asked is what’s happening around the property. So if you have if your villa is here who is the owner of this one, the owner of this one, the owner of this one,are the land free, I mean, there’s a view. And what’s happening in the

45:23
near future? You might want to go and ask, inquire yourself, talking to neighbors and and local owners around and and the Banjar and community in that area. So just work on the worst case scenario that your view is off something, you know, assume something will get built right in front of you. What would happen to your property price? Is it going to be incarcerated? Yeah, you’ll be crambled. Well yeah, I’ve seen it so many times. So I mean, but then you but then design appropriately, you know. Yeah,

46:00
exactly. So you need one, for example, the villas that I make, I always design them when there’s a view to enjoy the view, but also to be to be the villa to be OK, to be still great if something is built. So like inward facing or U shape around the pool. Exactly. The rule of thumb is if you’re building, if you’re sorry, if you’re investing south of Raya Canggu, but even north, a little bit north, these days, your view is going to go. It’s not if it’s when it’s a it’s a guaranteed thing, almost, you know.

46:37
There’s no reason why your view won’t go because the land in front of you, someone owns it and someone wants to make money with it. So they will make something there. So the question you need to ask yourself is that if they make something, is my property still worth something or is it completely rendered? like you know, useless. And that’s a big that’s a big problem. I mean we’ve seen that loose your view and then you have a nightclub next to you. The noise and the view. Yeah, your investment’s gone.

47:09
If you invest too close to the beach, there will be an night club. There will be a beach club. It’s a guaranteed thing. 100%. Don’t put all your eggs in one basket. Mitigate. Speak to the The Kedungu Fund. Yeah. And watch our podcasts. Yeah, we’ll put this into a nice looking PDF, a little checklist. You can give it to your agent. You can give it to your developer and just work through it. If you’re ever considering buying, buying off plan, you know, do your homework. Yeah, do the work. And so yeah,

47:44
BaliBusinessClub.com So you can find us on social networks on YouTube. I think we are on Spotify as well. And then balibusinessclub.com balibusinessclub.com The website has been a little bit dormant up until now. And now we are reviving it. We’ll put a resource section there somewhere. Yeah, absolutely. Cool. Thank you very much. Thank you. Bye bye guys! Thank you! Cheers!