WE ANSWER OUR TOP FAQ'S ON OVERSEAS INVESTING

When considering overseas investments, it's natural for investors to have many questions. These can range from identifying the best investment locations to understanding the security and risks involved, especially compared to Australian property investments. We gathered insights from Matt Sully, APFG CEO, and our sales team to address the most frequently asked questions.

"As investors delve into overseas opportunities, the questions they pose can often be thoroughly addressed through proper due diligence," says Matt. "This is crucial when selecting areas and working with our partner developers."

If you have any questions about overseas investments, check out our list below or get in touch to schedule a call with our team.

1. Can foreigners own property in Bali given Indonesia's laws?

Foreigners cannot directly own land in Indonesia, but they can enter long-term leasehold agreements, usually for 25-30 years with options for extensions. This method is popular among foreign investors because it offers a straightforward way to invest in Bali. APFG ensures secure and compliant investments through our in-house legal experts.

2. How does leasehold qualify as property investment?

Leasehold allows you to purchase rights to a property for a significant duration, typically up to 30 years, with options to extend. This enables you to benefit from property appreciation, generate rental income, and use the property personally during the lease term."Ownership laws are a common concern," says Matt. "Investors accustomed to freehold ownership might hesitate, but leasehold investments can offer excellent returns without the high costs of freehold properties."

3. How does buying property in Bali differ from buying in Australia?

For Australians, the main differences include legal structures, tax implications, market dynamics, and investment returns. Notably, there is no Stamp Duty in Bali. Most properties available to foreigners are leasehold, unlike the freehold properties common in Australia, making entry prices significantly lower.Bali lacks many costs associated with Australian property purchases, such as Stamp Duty and Mortgage Registration. Additionally, returns in Bali are often driven by higher rental yields from tourism rather than long-term capital growth. To bridge these differences, APFG has assembled a team of Australian professionals, including property specialists, mortgage brokers, financial advisors, and tax experts."Our team and our partners in Bali bring Australian standards to the Bali market, making the process familiar and secure for foreign investors," says Matt. "APFG clients have access to expert guidance in property investment, tax, and accounting."

4. Is Bali a safe place to invest in property?

Bali offers a stable property investment market, supported by Indonesia's stable political climate and growing economy. APFG closely monitors geopolitical and economic trends to ensure secure investments and mitigate risks.

5. Are there still profitable investment opportunities in Bali despite the property boom?

Yes, profitable opportunities exist even during a development boom. Success depends on thorough due diligence and partnering with reputable developers. It's essential to assess market conditions, legal landscapes, and the developers' track records."This is a frequent concern," explains Matt. "We partner with experienced developers and hospitality brands who understand the market and ensure stable, profitable returns for investors."

6. What tax obligations will I face in Indonesia and Australia as a Bali property owner?

Australian investors will face tax obligations in both countries. In Indonesia, you must pay Land and Building Tax annually and income tax on rental earnings. These are typically covered in your management fees.In Australia, you'll report and be taxed on foreign income from your Bali property. Indonesia will withhold 20% of your earnings, but the Indonesia-Australia tax treaty ensures you aren't taxed twice.Consulting a tax advisor experienced in international property investments can help optimise your tax situation and ensure compliance.

7. How will I manage my Bali property?

Remote management can be challenging, but trusted local property managers can ensure proper care of your investment. APFG works with experienced property managers and world-renowned hotel operators to offer a hassle-free investment experience, ensuring high occupancy rates and passive rental income.

8. What are the operational and management costs for a property in Bali?

You will need both leasehold and management contracts. Management contracts cover operational fees, maintenance, and refurbishments. Generally, operational and management costs, including renovations, range from 40-50% of gross revenue.

9. How do I verify the credibility of developers in Bali?

APFG conducts thorough due diligence, partnering only with developers who have a proven track record of successful projects. We examine past developments, financial stability, and client testimonials to ensure reliability and quality."If you want information about our partner developers, just ask," says Matt. "We're happy to provide it."

10. How can I ensure my property's construction quality?

Ensure construction quality by researching your developer, contractor, and builder. Verify their experience and completed projects. APFG partners with developers known for high construction standards, providing regular updates to keep investors informed.

11. What financing options are available for foreigners investing in Bali?

While financing in Bali is limited for foreigners, APFG's mortgage brokers can help you explore options in Australia. These include equity release and using SMSFs, allowing you to leverage Australian financial resources for your Bali investment.

12. How do I know I am buying in a location with high room rates and occupancy?

Success depends on the developer's market knowledge and due diligence. APFG partners with developers and hotel brands who meet strict criteria, ensuring high returns through comprehensive market analysis and forecasts.

Overseas Property Investment with APFG

Navigating overseas property investments can be complex, but APFG partners with well-established developers and renowned hospitality brands. Their expertise ensures long-term stability and profitability, guaranteeing successful investments.

Partnering with APFG provides expert guidance and strategic approaches, ensuring substantial returns on your investment for years to come.