The Bali Property Market with Daniel Spencer [CPD Available]

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UK Dentists: Collect your verifiable CPD for this episode here >>> https://courses.dentistswhoinvest.com/smart-money-members-club

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Daniel Spencer’s Number: +971 58 579 6650

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Bali is not just a dream holiday backdrop, it’s become a serious talking point for investors who are tired of thin UK buy-to-let margins. We sit down with Daniel Spencer, a long-time property investor who started in London and now helps clients invest internationally, to unpack what is actually happening on the ground and why Bali property keeps coming up in conversations about overseas real estate.

We get specific about the numbers and the mechanics: lower entry prices (including studio apartments), the difference between gross and net rental yield, and why occupancy rate is the make-or-break metric for short-term rentals. Daniel also breaks Bali buyers into three clear groups, from people who visit and buy their first place, to families wanting a base that pays for itself, to pure investors funding off-plan villa communities and focusing on the exit. Along the way, we map Bali’s key areas, explain where the “action” sits, and why the island’s post-Covid demographic shift towards entrepreneurs, co-working, and wellness is shaping demand.

Then we move into the questions everyone asks about property abroad: how the buying process works from the UK, when a local company structure may be needed, what role notaries and legal teams play, and how tax can differ depending on whether you buy a villa, an apartment, or a larger project. If you’re researching Bali real estate, Indonesia property investment, or international property for UK dentists, this is a practical starting point for doing your own due diligence.

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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.

Transcript

Dr James 1:43

Another editing of podcast today. We are here to continue with a little bit of a recurring theme of it, which is the theme of property, because there's been a little bit of uh header of that sort of content, and on the podcast for a little while, and we're looking at it like that wrong. And on that note from me today, very fast inventory spent it fellow like much of the audience and that podcast and his area of expertise light in investing property over the minimum podcast video to buy property. Define property, obviously it's taking a little bit of a load for the moment given the current situation in the Middle East. And we're here today to talk about other opportunities if we kind of uh take a blinker spot and look more worldwide, and one of those specifically being the ballet market. Looking forward to finding out more about the property situation internationally in today's episode. As ever, you can claim your CPD for this episode within the official Dentists who invest Smart Money Members Club. Smart Money Members Club also includes multiple mini courses and webinar series on finance for dentists, including how to become as tax efficient as possible as well as understanding investing. All of this content counts as verifiable CPD, and you can download your certificates there and then upon completion of each lesson. In addition to this, we also include a whopping 10% discount on your dental indemnity and a 5% discount on lab bills for dental principals, amongst other perks and discounts for members. Please use the link in the description to claim your verifiable CPD for this episode. Daniel, a little bit of background about yourself there that I

Why Look Beyond UK Property

Dr James 3:25

provided to the audience by way of context. Obviously, you are a fellow Brit like what we were saying a second ago, uh, specifically from London, and you find yourself in this world where you can assist people when it comes to investing in property worldwide and outside of the UK. And you know what? Before we zoom in on the ballet market, which is what I talked about in the intro to this podcast, what I'd love to talk about is investing outside of the UK as a thesis in general for your investments. Because if we set the scene, and I'm sure a lot of people who listen to this podcast know the UK is not what it once was by way of lucrative whenever it comes to property investment. Is that fair to say, Daniel?

Daniel 4:10

Absolutely, 100%, James. Yeah, that's right.

Dr James 4:13

Cool. Can you paint a little bit of a picture as to where that is, just for people who are listening to this who may be?

Daniel 4:18

Yeah, of course, yeah. Um, so probably be helpful if I just uh go over a little bit about myself to begin with. So um I started in property over 30 years ago, um, and for the most part was largely involved in uh the London market, uh, and this was '99 going through to 2006. Um and effectively, you know, these were the times, and I'm sure some of your uh members will recall this well, you know, you could make decent returns, it wasn't difficult, you know. Um and obviously what we've seen since then uh has been completely the opposite. We now have situations where tenants have more uh rights than landlords, uh and the returns are just not there anymore. So based on that, four years ago uh moved out to Dubai as an investor um to look for investment opportunities here, and then to be honest, there's been no going back since then.

Dr James 5:23

There we go. And would you say that it's fair to say that alongside what you were just mentioning a second ago about tenants having more rights than landlords, you know, if someone decides you're not going to pay their rent one day, you are gonna have so much fun and games trying to get them out of that property,

UK Landlords Squeezed By Rules

Dr James 5:41

uh, all the while you're not earning a penny on it, and you're still mortgage, of course. Yeah, yeah. Not to mention the tax situation as well. They just seem to have a little bit of a chip at the the the the the tax position of landlords in the UK every single time we get a new budget, and uh yeah, I mean there's there's reasons behind that that we won't get into on today's podcast, or at least theories as to why they do that. They want hot prices to rise, but they don't want them to rise too much, um, basically, is the kind of thesis of the government, and to do that you have to take a little bit of heat out of the market. But there's a lot of countries out there that are just embracing this, they want foreign investment. Dubai is one of them. Yeah, obviously think we're taking a little bit of a dip at the moment, although you might you might argue in Dubai, and we're definitely not making any uh you know it's in suggestions by way of investment advice in this podcast, just to be clear, but you might argue, as a famous man Warren Buffett once said, buy when there's blood in the streets, even when we're bone sometimes. Okay, you might say that in the Dubai market, but you know, setting that to one side, because we've already done that on our previous podcast for anybody who wants to look into that, feel free to search up Daniel Spencer on the Dennis Invest podcast. You'll find that uh older episode where we're talking about the Dubai market. Today we're focusing on the Bali market, aren't we, Daniel? And this might be news to a lot of people, I guess, listening to the podcast. But why, in your opinion, is Bali hot at the minute? Daniel, what's going on out there?

Daniel 7:06

Yeah, okay, so um it's pretty simple to be honest. It goes back to the golden rules of investing, you know, it's based on supply and demand. Um Bali's tourism market last year had seven million visitors, and this year they're predicted to uh get somewhere between nine and ten. It's now the number one most visited global destination. Um and they they have a lack of uh quality accommodation there. And it's kind of you know, they're to a degree they're a victim of their own success. But there have been changes that have been made in the market, we'll go into those in a little bit. But in a nutshell, the reason why it's uh such a good investment opportunity is that the uh entry prices are very low. So to give you an example, um, we have clients that are purchasing studio apartments for £50,000. Um, but the returns are incredibly high, so generally somewhere between uh net, somewhere between 10 and 20%.

Dr James 8:11

Nice, and that's I I like that you use the term net there. So would you say is that net of tax, net of debt?

Daniel 8:21

That that would be your net that would be your net rental income, would be between ten and twenty percent, yeah.

Dr James 8:26

Okay, fine. All right then, cool. Well, I mean that is an amazing stat because you know, over here in the UK

Why Bali Is Hot Right Now

Dr James 8:32

you're maybe talking like six to eight gross, I'm gonna say, on a bidalette.

Daniel 8:36

Yeah, six to eight gross would be about right, but you would have to to get the eight, I think you would probably agree you'd have to be in uh short-term accommodation to see eight.

Dr James 8:45

Yeah, well, this is the thing, you know, I I've heard that figure known around uh bandied around. Um you all know better than me, but yeah, people quote six to eight percent gross, and you know, if you have the property in your personal name, obviously you have to have your income tax needs to come off that, and then you need interest and the flipping uh and the uh you know the the actual um the principal on the debt as well. But yeah, you need to pay it on the principal and a little bit of interest on top, you know. Yeah, and that has to come off your gross before you get to your net. So your net in reality, a lot of the time people aren't even making fairly money on it. Do you know what I mean?

Daniel 9:20

I think if you made three percent net, you the you'd you'd uh probably be somewhere around about average to good.

Dr James 9:26

Well, there you go, exactly. So, yes, anyway, um Bali property. Uh-huh. Bally property. So are these people now you I know that we covered this just before uh we talked today on this podcast, and I know you and I were beforehand, but just for the benefit of the audience, are we referring to purchasing these properties and then renting them out to individuals who are going to stay there for like a year, two years, three years, or is this Airbnb?

Daniel 9:54

Yeah, so it's uh there are typically three types of uh transactions that are happening. So, in the first instance, um what we're seeing is uh people that are uh have typically been to Bali, a bit like anywhere else in the world, you know yourself, you go somewhere on holiday. If you have an interest in real estate, it's not long before you find yourself staring into an estate agent's window, right? So you have a lot of people that are going there on holiday, falling in love with the place, uh seeing how much demand there is, seeing what's going on, and they want to get involved with that. Uh typically they tend to be transactions that are round about sort of the uh uh 70,000 USD up to 400,000 USD. They tend to be in that price bracket. Uh, and they would be looking to obviously capitalize on that and make the most amount possible. That would be uh a property in a good location with high demand uh and a good occupancy rate. That's the key thing to consider. Uh and then they will obviously rent that out. Occupancy rates, if I'm honest, between it's it's better if I don't overpromise. Let's say occupancy rates are 81% a year, okay, which is about 6% higher than the national average for a five-star hotel. So you haven't really got to do a huge amount of work to make good money on that. So you've got that demographic of buyer, then you've got another type of buyer who uh has probably been there more than once, and they want somewhere that they can use themselves for their friends and family, uh, but they want it to be able to pay for itself while they're not

Three Buyer Types And Real Returns

Daniel 11:37

there. So you have those guys, they typically tend to spend sort of you know between 300 and 500,000 USD, um, and that would be like a three, four-bedroom villa, again in a good location. Um, and then we've got on top of that the the guys that are purely investors, um, they have no interest in going there, all they care about is the bottom line. So, to give you an example of what that looks like, um, we have clients that uh we are doing bespoke builds for of communities of eight to ten villas. Uh, and on day one of construction, we will start marketing those villas off plan. Uh, and those investors will see returns of about 45% in 12 to 18 months.

Dr James 12:22

Nice. Well, that's pretty solid. And just to be clear, these returns that you're typically seeing out there, these are rental yields, not including the capital appreciation, correct?

Daniel 12:34

Yeah, that's correct. Yeah, capital appreciation currently we're looking at between 8 and 10 percent if you have the right property in the right area.

Dr James 12:42

Interesting. And how is the market out there?

Daniel 12:45

Do people typically borrow for these properties, or is it just um so uh borrowing in Bali needs to be done through a corporate entity, so you need to set up the equivalent there of a limited company that's called a PTPMA in Bali. Um, our lawyers can can do that for you so you can run everything through a through a company and take advantage of that. Then you would be exposed to some lending. Um, but to be honest, a lot of people that are buying there are people that are liquidating assets in other countries and looking to moving into a fast-flowing opportunity.

Dr James 13:23

Interesting. I was just wondering how that differs from the UK and how that's typically handled out there. And for those who don't know, Bali is an island and specifically a province. UK Dennists, Dennists Who Invest now has an official platform where you can learn about finance and obtain UK compliant, verifiable CVD at the same time. The only platform that exists on which you can do both. The Smart Money Members Club has hundreds of hours of mini courses, webinar series, and live day recordings on all things finance slash tax efficiency for UK dentists. This includes complete courses on how tax works for UK dentists, finance so that you can invest and grow your own money, business so you can improve your profitability as an associate or principal, and for those out there that want it, there's also a mini course and how you can responsibly enter the crypto space using measured amounts of capital. I've gathered this content from the best of the best I could find in each respective area so that you know that this is how people at the forefront of each field advise their clients. The Smart Money Members Club also contains discounts on common things that UK dentists need to pay for on a regular basis. This includes a whopping 10% discount on dental indemnity, the offer to beat your income protection deal no matter what you're paying, and for the principals out there, 5% discount on lab bills and 10% discount on practice insurance. These are designed to offer hundreds, if not thousands, in annual savings. The purpose of this members club is to not only boost your monthly income but also manage your outgoings as much as possible and therefore create more profit. To celebrate the launch of the Smart Money Members Club, and given that the CPD deadline is coming up soon, I've decided to offer the first month of this platform entirely for free. This offer will end in the coming weeks as soon as the current CPD

CPD And Smart Money Members Club

Dr James 15:15

cycle is up. To collect your CPD for this podcast episode using the Smart Money Members Club, feel free to use the link in the description of this podcast.

Daniel 15:27

Yeah, exactly. It's a part of Indonesia, it's a small island. Um, and there's thousands of islands that make up Indonesia, but it's the most popular one currently. Excuse me. The reason for that is that Indonesia as a whole uh is a Muslim country. Um Bali, on the other hand, um is partly Hindu, partly Buddhist, partly Muslim, and there's a Christian entity there as well.

Dr James 15:55

I didn't know that. Okay. Yeah.

Daniel 15:57

Yeah. Fair enough. Their history goes back to the 70s in terms of it, was they first became popular with surfers back in the 70s. And because it's so close to Australia, they had a huge amount of tourists, and still to this day, uh Australians make up the bulk of visitors to that island.

Dr James 16:17

Right, interesting. And then just so we can kind of set the scene for ourselves geographically for the listeners to this podcast. I mean, Bali is uh reasonably big island. It's not it's not like huge like Java or anything like that, but you know, it's it's not yeah. So there's different settlements on there, I guess, really. And out of the settlements that you see on there, where's the party location? Where's the party places? Where's the quiet places?

Daniel 16:43

If you could just like kind of set a scene for us on that one in terms of so something that is important to understand uh about Bali is the the type of people that are there now, and that demographic has changed significantly since COVID, like a lot of places, I guess, right? Um so the people that are there now that make up the vast majority of those uh visitors and people that are moving there, uh tend to be

Bali Context And Where Demand Sits

Daniel 17:10

uh entrepreneurs, uh startup founders, CEOs. Um in terms of the visitors, they tend to be well, it's again there's a large demographic, but I guess the bulk of those people are probably in their 30s to 50s, I would say. The party locations are just up the west coast, basically in Changgu. That's where that's the hotspot, that's where all the action is. But regardless of anybody's age group um or nationality, the thing that pulls people back to Bali, apart from the outstanding natural beauty, because it is incredibly picturesque, um, is the health and wellness scene. So there's a lot of MMA gyms there, there's a lot of uh health clubs, there's a lot of longevity clinics that are starting to open up, wellness retreats that are opening up, and these are not small entities, these are big brands now, so Four Seasons, Kempinski, these kind of operators. Um, but yeah, it's very much a health and wellness island. But the party locations, obviously, you wouldn't necessarily want to live in that, but you would want to own a property there if you wanted to make money. Yeah.

Dr James 18:25

Because I imagine that's where the Airbnb traffic is at.

Daniel 18:29

Well, it's a very well-established area now, so again, supply and demand, you know, there's no more land to build on. So whatever there now, and we're talking about walk out of your front door and you're in the middle of the action, you've got everything there. Gyms, health clubs, restaurants, cafes, uh co-working spaces, very, very popular. Uh, yeah, so you've got everything that you need there, but then there are people that don't necessarily want that, or people that are looking at other opportunities that want to get in to a market that's uh what you could term as undervalued by comparison, where there's more headroom for capital growth, let's say. Um, so there's a lot of that happening as well.

Dr James 19:10

There we go. Okay, good to know just to set the scene because again, a lot of people listening to this podcast will just have no idea. Uh, including myself, actually, you know, I did a bit of DYOR um before we jumped on today to familiarize myself with Bali because I knew of it, uh, but probably not really much beyond that, shall we say? Okay, fair enough. So let's say someone is gonna move out there, or let's say someone is considering uh potentially purchasing a property uh in Bali. How is that usually let's say they're let's start from the start, okay? And I'm just I'm curious because I I have no idea what you're about to say right now because I've never been through this, and you've seen this happen to lots of people held their hand through this journey. They're over here in the UK, they've got their money in a personal name or potentially a limited company, they learn about property in Bali. What's the next move for them? Who do they have to talk to? Do they do they move the money out there first? Do they buy it in a personal name? Do they set up a company?

Daniel 20:09

So it would depend on uh what that individual wants to achieve. There's no, you know, one approach is going to fit everybody's scenario. So it depends on what everybody's uh individual circumstances are, it depends on their tax position, it depends ultimately what it is that they want to achieve and over which time period. So an initial consultation would uh highlight all of these things, and then we'll find the best opportunity for them and the best way in which to structure that. But we do have uh on the ground uh two very, very competent notaries and legal teams that are stationed there, uh, both of them in Changgu, actually, um, that deal with all of this. Typically, transactions, we're talking about a wire transfer, nothing more complicated than that. Very, very simple, very straightforward. No different really to buying a property here in Dubai, other than the fact that their uh their land registry system is not digitized in the same way that it is here, so there's physically more paperwork to do.

Dr James 21:13

Okay, understood. And

Buying Process And Legal Setup

Dr James 21:15

I guess one thing I would find it really interesting to talk about is how tax works in Bali, because over here, obviously you purchase the property, if it's a bad let, you've got your stamp duty uh and everything along those lines. Then when you are receiving income from the property, if it's in a personal name, it's gonna be income tax. Although you do get some basic tax, you do get some tax relief on that, you get the you get 20% tax relief on that, I believe if it's held in a personal name. Um in a company, it's obviously going to be corporate tax on the profits. Um you can pay the however the interest is at least tax deductible in a company, whereas in a personal name it isn't. Um and then you've got to worry about capital gains on resale, and it's not normal capital gains, it's an in it's a property capital gains rate, which is higher than your standard capital gains rate. So, anyway, if everybody was able to follow that in their heads and I was talking about it out loud. I again I'm not a tax expert, I just I just hear these things bandied around. I want to know how does that compare to Bally?

Daniel 22:17

Uh okay, so there's a few different scenarios, as you would expect, I guess. Um important to understand the difference between uh say if we were buying something like an individual villa uh on a separate plot, then we would be looking at the best way to structure that for you. Okay, so it may be that the best way to do that is to set up the equivalent of a limited company in Bali. Um and if you were doing that, you would pay a flat 20% uh tax on your rental income. Uh might sound a lot to begin with, but obviously if we're talking about the UK market, it's nothing more dramatic than what you would see at home. If you're buying uh an apartment and you're looking at doing that through a company that's owning and operating, let's say. So if you imagine something like a branded residence, let's say with Marriott Group or something like that, then you would have a different structure because of the way that the property is marketed and the way the rental income is received. Uh if you're looking at the larger end, then we would be doing something like setting up an offshore holding company in Hong Kong. So it's very, very different for each scenario. So it's very difficult for me to you know give you a one-size-fits-all answer to that. But let's put it this way to simplify it, um it's definitely more advantageous than owning anything in the UK in terms of uh tax efficiency.

Dr James 23:44

Yeah, sure. So am I right in saying going off what you've said, it's not really I get that every situation is different, but it's not typically what you would see out there or that you would observe that people would buy these things in a personal name. It usually is through some sort of company. Have

Tax Structures And Reducing Risk

Dr James 24:00

I heard have I understood that?

Daniel 24:00

It depends on the it depends on the size of the investment and what that property is going to be used for. So again, it comes down into the type of use. But if you said, let's take an example of someone who's buying an apartment, let's say, uh, the tax liability on that's going to be very small.

Dr James 24:16

Okay, fine. No, that that's that's that's cool. I was just curious. And I guess one thing to just touch upon because obviously, whenever it comes to moving moving money internationally and everything along those lines and property abroad, you know, everybody's got everybody knows somebody who's got a horror story, do you know what I mean? Yeah. So this is why it can be useful to have intermediary, of course. Is that fair to say, Dan?

Daniel 24:38

Yeah, so uh you have to bear in mind that it's uh the legal system in in Indonesia is slightly different. So uh if you think of it in terms of uh how the system works in places like France and Mauritius, where there are notaries involved that are acting as the go-betweens effectively, uh, between your uh legal entities, then what you'll find is that they will take care of the majority of that for you in terms of moving funds and so on and so forth. Uh but again, that comes down to the type of property that you're buying. So if you're buying something that's already built, um, that has a different legal process as far as the buyer's concerned, uh, to buying something off-plan, and the vast majority of our sales are off-plan sales, and the developers that we work with have all these people in-house, and it's really nothing more complicated than opening a payment link in an email.

Dr James 25:33

Understood. Yeah. There you go. Well, I've learned absolutely loads about Bali property uh today. Daniel, so thank you for sharing.

Daniel 25:41

Very welcome, James. Very welcome.

Dr James 25:43

Everything that you've shared. I guess the only thing to say is if anybody listening to the podcast today was interested in reaching out to yourself, where would they be best off finding you?

Daniel 25:51

Yeah, so they can find me at uh my uh website, which is atlasintern.io. Uh or alternatively, we can maybe post uh my WhatsApp number on uh on the screen. Perhaps you can take care of that.

Dr James 26:05

Yeah, sure. We can put that in the description of the podcast for anybody who's interested. And then in addition to that, it is worth mentioning that you can find Dan in the Dennis Invest Facebook group as well, of course.

Daniel 26:16

If you're absolutely hundred percent. Yeah, yeah, yeah. Happy to answer any questions in the group. Feel free, just tag me. Yeah.

Dr James 26:23

Sure. Sounds good. All right, Daniel. Well, thank you once again for your time. Looking forward to see you again very soon.

Daniel 26:27

No problem. Thank you, James.