What Returns Can You Expect from Lombok Real Estate?

Lombok real estate can generate strong returns — but only on the right assets, in the right locations, with the right management. Here are the real numbers, not the pitch deck numbers.

Rental yield: what the market actually delivers

Well-positioned villas in Lombok's tourist corridor (Kuta, Selong Belanak, Mawun) are currently generating gross rental yields between 8% and 14% per year. Net yields, after management fees, maintenance, and local taxes, typically land between 6% and 11%.

The spread is wide because the market is still fragmented. A villa with strong Airbnb positioning, professional photography, and active channel management performs very differently from one listed passively on a single platform.

What drives yield up

• Location proximity to beaches: Walking distance to Kuta or Selong Belanak commands a 30–40% premium on nightly rates
• Pool: Private pools increase occupancy rates significantly in the €80–200/night segment
• Professional management: Occupancy rates of 60–75% are achievable with active multi-platform management; passive landlords see 30–45%
• Build quality: Properties that photograph well and hold up to 3–5 years of rental use without major repairs outperform on both occupancy and resale

Capital appreciation

Lombok has seen significant land price appreciation over the last decade, particularly since the Mandalika MotoGP circuit opened in 2021. In the Kuta–Selong Belanak corridor, land prices have roughly doubled between 2019 and 2024 in some areas.

This is real but cannot be guaranteed to continue at the same pace. Infrastructure investment (airport expansion, roads, utilities) remains the key driver. The Mandalika Special Economic Zone continues to attract government and private investment, which is a positive signal for medium-term land values.

What to watch out for

Gross yield claims above 15% should raise questions. At that level, either the purchase price was very low (possible on raw land without permits), the occupancy assumptions are optimistic, or the management costs are not counted. Ask for historical occupancy data and actual revenue statements, not projections.

Leasehold properties have a remaining term to watch. A 25-year lease with 15 years remaining is worth significantly less than a fresh 25-year lease, even if the seller presents it identically. We always disclose remaining lease terms upfront.

A realistic scenario

A 2-bedroom villa with a pool in the Kuta area, purchased on a fresh 25-year leasehold at €120,000, renting at an average of €120/night with 65% annual occupancy, generates roughly €28,500 gross revenue per year. After management (15%), maintenance reserve (5%), and local taxes, net income is approximately €22,000 — a net yield of around 18%… No. That is before the lease cost is amortized. Once you count the lease as a depreciating asset over 25 years, the real annualized return is closer to 8–10%. Still strong. Just not 18%.