Last Updated on March 14, 2025 by Yasmina
Lombok is quickly becoming one of Indonesia’s top real estate investment destinations, attracting investors looking for high rental yields and long-term capital appreciation. But are villas in Lombok profitable? The short answer: Yes—if you do it right.
With increasing tourism, affordable property prices, and a rising demand for high-end accommodations, villas in Lombok can generate significant returns. However, success depends on factors like location, management, and market positioning.
This guide breaks down the profitability of villas in Lombok and what you need to consider before investing.
Table of Contents
1. Understanding Lombok’s Villa Rental Market
Lombok has seen a surge in tourism, thanks to its beaches, surf spots, and laid-back lifestyle. Unlike Bali, which has become saturated with competition, Lombok offers a less crowded yet rapidly growing real estate investment landscape.
Key reasons why villas in Lombok are profitable:
✔️ Lower property prices than Bali – Investors can enter the market at a lower cost.
✔️ Growing tourism numbers – Increasing demand for private accommodations.
✔️ High rental yields – Villas in prime areas can achieve 8-12% net ROI annually.
✔️ Strong resale potential – Land and property prices continue to rise.
The Selong Belanak, Kuta, and Gerupuk areas are particularly promising, attracting surfers, digital nomads, and eco-conscious travelers looking for unique stays.
2. How Much Can You Earn from a Villa Investment in Lombok?
a) Short-Term Vacation Rentals (Airbnb Model)
With the rise of Airbnb and boutique villa rentals, short-term stays can generate high returns.
- Average nightly rates: $100 – $400 per night, depending on the villa’s size and location.
- Occupancy rates: 50% – 80%, with peak season (July–September, December–January) often exceeding 90%.
- Annual revenue potential: A well-marketed villa can earn between $25,000 and $100,000+ per year.
b) Long-Term Rentals
Long-term villa rentals are also profitable, particularly for expats and digital nomads looking to stay in Lombok for months at a time.
- Monthly rental rates: $1,500 – $4,000, depending on the property’s amenities and location.
- Lower turnover costs than short-term rentals.
- Consistent income without the need for frequent marketing and guest management.
Many investors opt for a hybrid model, renting short-term during the high season and securing long-term tenants during the off-season to maximize returns.
3. Factors That Impact Villa Profitability
While the numbers look promising, not every villa investment in Lombok is a guaranteed success. Here’s what affects your profitability:
1️⃣ Location is Everything
Prime areas like Kuta, Selong Belanak, and Are Guling have higher occupancy rates and stronger rental demand than remote locations. Easy access to the beach, restaurants, and attractions significantly boosts rental income.
2️⃣ Quality of Design & Amenities
Guests expect modern, well-designed villas with private pools, air conditioning, and high-speed WiFi. Sustainable features like solar energy and rainwater collection also appeal to eco-conscious travelers.
3️⃣ Professional Property Management
Managing a villa remotely is challenging. Hiring an experienced villa investment & management company ensures:
✔️ Effective marketing on Airbnb, Booking.com, and Agoda.
✔️ High guest satisfaction (cleaning, maintenance, concierge services).
✔️ Optimized pricing strategies for maximum occupancy.
4️⃣ Running Costs & Operational Expenses
To calculate net profit, factor in staff salaries, maintenance, electricity, and marketing costs. On average, operational costs range from $5,000 to $15,000 per year.
5️⃣ Legal Considerations
Foreign investors need to structure their property correctly—either through a leasehold agreement or a PMA company (foreign-owned entity). Understanding local regulations ensures a smooth real estate investment process.
4. How to Maximize Your Villa’s Profitability
✔️ Choose the Right Market Positioning
- Luxury villas with premium amenities command higher nightly rates.
- Eco-friendly villas attract a growing segment of conscious travelers.
- Surf-focused villas in hotspots like Gerupuk cater to a niche but loyal market.
✔️ Leverage Digital Marketing & Direct Bookings
- Optimize listings on Airbnb, Booking.com, and Expedia.
- Build a professional villa website with direct booking options.
- Use SEO and social media marketing to attract more guests without relying solely on OTAs.
✔️ Offer Unique Experiences
- Collaborate with local surf schools, yoga retreats, or cooking classes.
- Provide concierge services for airport pickups, excursions, and scooter rentals.
- Offer discounts for long-term stays to maintain occupancy during low seasons.
5. Is Now the Right Time to Invest in a Lombok Villa?
✅ Lombok’s property market is still undervalued compared to Bali—offering higher growth potential.
✅ The Indonesian government is investing heavily in infrastructure, roads, and tourism development.
✅ The new Mandalika MotoGP circuit has boosted global attention on Lombok, increasing tourism demand.
With these factors combined, now is an excellent time to invest before prices rise further.
Final Thoughts: Are Villas in Lombok Profitable?
Yes, villas in Lombok can be highly profitable when planned and managed correctly. Investors who choose prime locations, high-quality designs, and strong marketing strategies can expect 8-12% annual rental yields, plus capital appreciation over time.
However, success depends on market knowledge, operational efficiency, and legal compliance. If you’re considering investing in Lombok, partnering with experienced property professionals can help you navigate the process and maximize your returns.
FAQs
1. How much does it cost to build a villa in Lombok?
Construction costs range from $700 – $1,500 per sqm, depending on materials, contractor quality, and finishes.
2. Can foreigners buy villas in Lombok?
Foreigners cannot directly own freehold land but can invest through leasehold agreements or a foreign-owned PT PMA company.
3. What are the best areas in Lombok for villa investment?
The most profitable areas include Kuta, Selong Belanak, Are Guling, Torok, and Gerupuk, thanks to high tourism demand and infrastructure growth.
4. What are the risks of investing in a villa in Lombok?
Key risks include market fluctuations, legal complexities, and poor property management. Working with experienced professionals can help mitigate these risks.
5. How long does it take to break even on a villa investment?
Most investors see a return on investment (ROI) within 5-7 years, depending on occupancy rates and property appreciation.
About Nour Estates
We started Nour Estates with a simple idea: to make finding your dream land in Lombok as easy and enjoyable as a day at the beach. Our team is a mix of local folks and people from around the world who fell in love with Lombok like you. We’ve been in your shoes, faced the challenges of buying land here, and learned all the ins and outs. Now, we’re here to share that knowledge with you.
We are here to find you the perfect land to invest in. Contact us today, and let’s start this exciting journey together!
Email: hello@nourestates.com
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