Realistic Rental Yields in Bali & the Gili Islands: Gross vs Net (2026)

What is the difference between gross and net rental yield?

Gross rental yield is annual rental revenue divided by purchase price, before any costs. Net rental yield deducts OTA commissions, management fees, utilities, maintenance, replacement reserves and Indonesian tax — including the 10% final withholding tax on gross rent from land and buildings. In Bali and the Gili Islands, the gap between the two is large.

The distinction sounds basic, but it is where most misleading numbers hide. A villa can produce impressive gross revenue and still deliver a modest net result once every party in the chain — booking platform, manager, staff, utility company, tax office — has been paid. A gross figure tells you what the guests paid; a net figure tells you what you keep. Only the second one belongs in an investment decision, and only when its assumptions are written down.

Why do advertised yields of 15–20% rarely survive scrutiny?

Because they are usually gross figures built on peak-season nightly rates and optimistic occupancy, quoted before commissions, management, running costs and tax. Bali and Gili marketing commonly claims 15–20% or more; a well-run villa's net result after all deductions is meaningfully lower, which is why the assumptions matter more than the headline.

The standard inflation mechanism is simple: take a high-season nightly rate, apply it to most of the year, skip the low season, quote before the 10% withholding tax and before management fees, and divide by an optimistic purchase price. None of those steps is exactly a lie — each is an assumption. Stacked together, they produce a number that no operating villa reliably delivers.

This matters more on a young market like the Gili Islands than in established Bali neighbourhoods, because there is less public operating history to check claims against. When a seller cannot show audited operating data, the only protection is forcing every assumption into the open — the approach Trawaya applies to its own Seraphina Isles Villa numbers below.

The deduction waterfall: from 100% gross to net

Start from 100% of gross rental revenue and deduct in order: OTA and booking commissions, property management fees, utilities and staff, maintenance and a replacement reserve, then Indonesia's 10% final withholding tax on gross rent. What remains is the net income a yield should be calculated on. Every line is knowable in advance — ask for all of them.

Watch the tax line: the 10% final withholding applies to gross rent, not profit, so it takes a larger bite out of net income than the rate suggests. Where a villa is operated as an accommodation business through a PT PMA rather than passively leased, income can instead fall under corporate taxation at 22% — the classification matters. The property tax guide for foreign investors covers this in detail; verify your own treatment with an Indonesian tax adviser.

Worked example: Trawaya's Seraphina model

Trawaya publishes an estimated 9–11% net yield range for Seraphina Isles Villa on Gili Trawangan, where villas start from €120,500. Beside it sit the figures that drive Trawaya's calculator — a €125 average nightly rate, 65% annual occupancy and 32% operating costs — which are there so you can model your own investment amount, not as the derivation of the range. Run them and your figure will differ, because the published range is modelled on a different investment basis and is quoted before the 10% withholding tax. Ask for that basis in writing. It is an estimate, not a forecast and not a promise.

The point of publishing the inputs is that you can break them. Drop occupancy to 50%, cut the nightly rate, raise the cost ratio, set the investment amount to the sum you would actually pay — the calculator recomputes your own yield instantly. Expect it to land somewhere other than 9–11%: the published range rests on a basis these four inputs alone do not describe, which is precisely why you should ask for that basis in writing rather than infer it. Assumptions that still hold up under pessimistic inputs are worth a conversation; a headline number that arrives with no inputs at all is not.

Full honesty about the source: Trawaya is a young company. Seraphina Isles Villa is its first project — four villas on Jalan Kelapa, Gili Trawangan, one sold, V1–V3 available off-plan — so the 9–11% range is a forward estimate, not operating history. Apply the same scepticism to it that this guide recommends for everyone else's numbers, and read the off-plan buying process guide before committing to any pre-completion purchase.

Why does Trawaya model 65% occupancy instead of 85%?

Because islands have seasons. Bali and the Gili Islands combine strong high-season demand with quieter months, weather disruption and shoulder periods that all cut into the calendar. A 65% annual occupancy assumption leaves room for low season, maintenance days and bad-luck months; 85% assumes near-perfect years and makes any yield model fragile.

Demand itself is genuine: Bali recorded 6,948,754 foreign arrivals in 2025, up 9.72% year on year (BPS-Statistics Bali). But market-level arrivals are not villa-level occupancy. Your calendar depends on listing quality, reviews, pricing discipline and channel management — none of which appear in a destination statistic.

Occupancy risk is also event risk. The 2018 Lombok earthquakes interrupted Gili tourism — a reminder that island occupancy can fall sharply for reasons no operator controls. That history is why Trawaya's risk disclosure treats occupancy as the primary model variable rather than a footnote, and why a conservative baseline beats an impressive one.

What moves net yield the most?

Occupancy and average nightly rate dominate — they set gross revenue, and every cost below is deducted from it. Purchase price is next: the same net income on a higher price is a lower yield. Operating-cost ratio and tax treatment matter too, but a ten-point occupancy miss outweighs most savings on individual cost lines.

• Occupancy — the single biggest swing factor. Stress-test it first, and downwards.
• Average daily rate (ADR) — pricing discipline across seasons, not the peak-week rate.
• Purchase price — overpaying destroys yield before the first guest arrives; sense-check against build costs on Gili vs Bali.
• Operating-cost ratio — staff, utilities and island logistics; Trawaya models 32% for Seraphina Isles Villa.
• Tax treatment — whether the 10% final withholding on gross rent or corporate taxation applies to your structure.
• Remaining leasehold term — a shrinking lease erodes resale value even when rental income holds; see the exit strategy guide.

Questions to ask any seller quoting a yield

Ask whether the figure is gross or net; what occupancy and nightly rate it assumes; whether the 10% withholding tax on gross rent is deducted; what the management contract costs; who funds maintenance and replacements; and whether the number comes from operating history or a projection. A seller who cannot answer is quoting a wish, not a yield.

• Is this gross or net — and net of what, exactly? Ask for the full deduction list in writing.
• Is the 10% final withholding tax on gross rent included, or is this a pre-tax figure?
• What occupancy and average nightly rate does the model assume — and for which months?
• Is this operating history or an estimate? (Trawaya's 9–11% Seraphina range is an estimate, labelled as one, and quoted before the 10% withholding tax.)
• What does the management contract cost, and can I read it before paying a deposit?
• Who funds furniture, linen and equipment replacement — is a reserve in the model?
• What does the yield become if occupancy falls ten points? Ask for the downside case, or run it yourself in the calculator.

Frequently asked questions

Sources

• BPS-Statistics Bali — foreign arrivals data (6,948,754 in 2025, +9.72% YoY)
• Direktorat Jenderal Pajak — Indonesian tax authority (PPh Final on land/building rental)
• OSS — Indonesia's investment licensing system (PT PMA business classification)