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Just coming back from a few days driving around Lombok. What an adventure! The detailed trip report will follow shortly.
The picture to the left was taken near the Gangga Waterfall in the North of Lombok, about 2 hours away from Senggigi. The sign says the following: “Land for Sale – Come and invest for your future in the exotic and extraordinary natural beauty of Lombok”.
Truly – Lombok is a magnificent island, a natural beauty in its own way. The rice fields are green, the waterfalls lush and refreshing, the Hot Springs are hot, the mountains high and majestic. Exactly what you would expect from an island paradise in the tropics:
Just don’t take the sign too seriously.
Firstly, foreigners can not own land in Indonesia. That’s a fact many don’t seem to realize or believe.
Plenty of ‘Bule’ (Caucasians) are cheated their money and stripped off their life savings every year. (This by the way happens in other countries as well – Thailand anyone?) Yes, there are some legal constructs out there, to technically guarantee you papers of ownership of the Villa or nicely located plot of land you ‘purchased’. A whole industry is build on that in and around Bali and elsewhere in the Archipelago.
The problem with it: it’s all but safe for your money.
Rules can change anytime and in the end, when things turn sour, the foreigner won’t get his right in Indonesia. There are for sure plenty of people out there who made some (or a lot) of money; selling land or Villas to foreigners who believed they found their dream in paradise. But still it’s a risky business. A business you should consider carefully, if you are planning to live here and invest in land, property or other real estate in Indonesia.
Secondly, investing in a remote spot in Lombok isn’t a good idea at all. I’m sure you remember the first rule of investing in land or real estate:
Location, location, location!
Investing in Lombok might sound like a good way to sink your money forever. The island never recovered from the bust during the Asian Financial Crisis in the late 90’s. Many ruins and half-finished houses, hotels and villa projects are still a reminding witness to the boom years which never came back.
Surely you could nowadays rent the same plot of land for the next 500 years for the amount you would have to pay. But ownership sounds sooooo much more reliable, doesn’t it?
Lastly, take the sign, as what it is. Best case a joke or as a way to secure the future of the land owner. Not yours. Why buy property in a foreign country with a long history of an unreliable legal system and corruption, when you can rent it sooo much cheaper. If things go wrong, you can always move on. Simple like that. No legal battles, no sorrows and best: no money lost.
I’m sure the Google Ads related to this article above will show plenty of unbelievable Villa or Land Deals in Bali, Lombok or Indonesia. They are best taken with a ‘ton’ of salt, not only a pinch.
Agree or disagree? What do you think about owning land or property in a tropical island paradise?
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June 5th, 2008 at 5:45 pm
I know a few people who bought land and opened businesses successfully in both Indonesia and Thailand. Saying that, I do know the odd person who got cheated out of their money.
I think the trick for success is getting a good local lawyer. And maybe the odd bribe here and there…
Now is probably the right time to buy land on Lombok, seeing that a brand new international airport is being built in the south of Lombok. That might mean a lot more tourists, especially directly from Australia.
June 5th, 2008 at 7:46 pm
Better never to buy property on a holiday – anywhere. Many people go to places on holidays and get sucked in by the beautiful beaches. I would never buy in Asia at anytime. Better to invest where you know the laws and they are on your side.
June 6th, 2008 at 8:34 pm
In Thailand, they get around that by 1)bribing people or 2)marrying a Thai.
But both are risky….but money talks so I’m sure you can get around the law but, like you said, location, location, location…..lombok is far from everything!
June 6th, 2008 at 10:43 pm
The best way to buy land or property in Indonesia is to:
Incorporate a company in Singapore and buy the property in Indonesia with the corporation – its way more complicated than that but it works and is pretty much solid.
I have owned 2 houses and one condo in Indonesia and I currently own a house in Jakarta and beachfront land in Banka Island (I am an American)
Indonesia and the entire 3rd and developing world are great places to invest in real estate for the short and medium term. I bought my first condo in Jakarta for 35K and sold it 3 years later for over 60K
June 15th, 2008 at 11:53 pm
[…] Funny Aliens: Land for Sale, Invest in your Future in Lombok Jun […]
June 16th, 2008 at 11:12 am
At the moment there is big run to buy land on Lombok. The huge company Emaar from Dubai have invested 800 Mio USD in the South of Lombok (Kuta Area) for building a luxury holiday spot. Even Armani Group are buying land in the south of Lombok.
So the prices of land is raising. :-B
I am watching the whole story and at the moment I am not sure to buy some land (it is difficult to find only a small land for around 20000 – 50000 usd!). I think you will have time till end of this year to buy land and resell it with a good profit (investment).
the location is everything. I heard talking that e.g. Senggig will be a 3 star area and Kuta a 5 star area. So check it out by yourself!
=)) =)) =))
December 31st, 2008 at 1:21 pm
what ever i love much my country,i agree what JAMES THE PROFESSIONAL ADVENTURE say its true to invest HOUSe in indonesia.you buy cheap when the time you want sell is more expensive,i mean like this you buy 30k and sold it in 3years later you get more 60k.is easy and i agree with BORRIS said TOO.you want success just do the rigth thing and fine a GOOD lawyer.Next month i go to RINCA island for diving and stay in GILI-t for couple days,now i still study in sangapore here much bored.for my indonesia is love you and for you tourist WE WELCOME YOU to relax and happy in my mainland of the colourful diversity of INDONESIA
June 27th, 2009 at 5:06 pm
Property & Land for sale in paradise Lombok
Lombok is indeed a newly discovered paradise for property seekers and investors. This is mainly because of its pristine and immaculate beaches, unbelievable landscape with fantastic views and because of the fact that beach land, villa and home property prices in Lombok are still reasonable and affordable. Many prospective land, villa and house property buyers select Lombok because of the serenity, clear blue waters, white sand beaches and the purity of the Island.
June 27th, 2009 at 7:41 pm
So how are the prices for land and property developing in Lombok, teguh? And what model would you recommend for foreigner, who would like to invest in Lombok, but are actually not allowed to own land or property following Indonesian laws?
August 7th, 2010 at 11:42 am
True: don’t buy but rent or lease!
Rent a house for a longer time like a few years or if you want to stay longer lease land and build a house on it.
Renting a house is best cause all the troubles of the house is left to the landlord. And there are a lot of troubles in upkeep. The downside of renting is if you want to stay longer you might have attached yourself to the house and the landlord wants a higher rent or wants it for himself.
When you want a house for a longer time and want your own house you can lease land and build a house on it. That will take you minimum a year, not only in building but get all the permissions in order. It will cost you minimum $ 125,000,-. The maximum you can rent the land is 25 years. The house will cost you $ 1000,- a year plus the upkeep. Thats much cheapre than $ 800/900 renth monthly. And then when everything is in order you can sell the house (overcontract) in those 25 years for the remaining period. At the end of 25 years when you have a good option in the lease you can lease it for another 25 years. When not the house belongs to the owner of the land.
August 14th, 2010 at 1:52 pm
Investing in overseas property is often more of a problem than investing locally, there are a million issues to deal with and often it has to be done remotely. Even more of an issue if you are not fluent in the local language. Regardless of how beautiful the place might be I would think twice about it.
Troy
August 14th, 2010 at 9:59 pm
I personally agree with you completely, Troy Barford. But many foreigners do it anyway and they seem to do okay. Others fail miserably. So it’s maybe more a matter of personal risk appetite. Mine and yours seem pretty low.