Villa rental yield in Bali: the arithmetic people skip

What comes out of gross

The gap between a quoted gross yield and net cash is usually 40–60%, and none of it is unusual or avoidable.

• Management fee, typically a share of revenue.
• Platform commission on every booking.
• Cleaning and linen between guests.
• Maintenance, pool and garden.
• Vacancy — the difference between the assumed and actual occupancy.
• Tax, which requires the right structure to pay correctly.

The leasehold clock

A freehold asset can appreciate indefinitely. A leasehold with 22 years left has 21 next year. If the yield calculation does not amortise the lease, it is overstating the return by the cost of the term you are consuming.

Common questions