Due Diligence
Red Flags When Buying Off-Plan Property in Bali
Last updated
Off-the-plan property marketed to foreign investors in Bali and across Indonesia is sold with a level of polish that Australian and Western buyers associate with regulated, licensed real estate. Much of it isn't. There is no equivalent of a cooling-off period, no centralised licensing body vetting every marketer, and contracts are frequently informal by the standards you're used to at home.
None of the signs below prove a project is a scam on its own. But the more of these you see in one place, the harder you should push before you transfer a single dollar.
1. Guaranteed high fixed returns
Short-term rental income is inherently variable — it moves with tourism seasons, exchange rates, competition, and construction quality. A developer promising a guaranteed, fixed 8-15% p.a. return is either absorbing risk you can't verify they can cover, or simply won't be able to pay it once occupancy doesn't match the brochure.
2. Pressure to decide quickly
"Limited time" pricing, disappearing bonuses, or a sales agent discouraging you from taking documents away for independent review are classic pressure tactics designed to short-circuit due diligence, not genuine scarcity.
3. No independent legal review offered or encouraged
If a developer's in-house lawyer or notaris is the only legal review on offer, that's not independent advice — it's advice paid for by the party on the other side of the contract from you.
4. Payment requested to a personal account
Funds should move to a corporate account (typically the PT PMA entity) or an escrow arrangement tied to construction milestones — not to an individual's personal bank account, regardless of how senior they are in the company.
5. Land certificate or building permit not shown
You should be able to independently verify the land title status (and that it isn't disputed adat/customary land) and the building permit (PBG, formerly IMB) for the exact plot being sold — not just a company-wide permit or a certificate for a different parcel.
6. Renders only, no verifiable construction progress
Glossy renders and drone footage are cheap to produce. Ask for a live webcam feed, a site visit, or recent dated photos from an independent source — not just marketing material supplied by the developer.
7. Sales agents who can't explain the ownership structure
If the person selling you the property can't clearly explain whether you're buying a leasehold, a Hak Pakai right, or a stake in a PT PMA — and what happens at the end of the term — that's a sign the structure is being deliberately glossed over. See my leasehold vs. freehold breakdown.
8. Heavy reliance on overseas sales agents
Aggressive outsourcing to sales agents based in Australia or elsewhere, disconnected from the actual on-the-ground project, makes it easier for a developer to distance itself from promises made during the sales process.
9. Communications go quiet after you sign
A responsive, communicative sales process that goes cold the moment your deposit clears — slow replies, unanswered calls, vague construction updates — is one of the most consistent warning signs reported by burned investors.
10. Suspiciously uniform reviews
A page of nothing but five-star reviews, with no negative feedback visible anywhere online, more often reflects review management than genuine buyer sentiment. Search independently — forums, expat groups, and direct outreach to past buyers tell you more than a testimonials page ever will.
Next step: vet the developer directly
Once you've spotted a red flag, don't just walk away quietly — verify it. My checklist walks through exactly what to check before you transfer any money.
Read the Developer Vetting ChecklistThis page is general information only, not legal or financial advice. Property law and regulation in Indonesia changes and varies by region — always engage an independent, qualified local lawyer or notaris (PPAT) before signing anything or transferring funds.