Investor tool · 2026
The broker quoted you 12%.
Realistically you'll see 3.1%.
Enter the projected net rental yield the broker showed you. We strip out the assumptions developers and agents quietly leave out: operator underperformance, year-25 lease decay, IDR depreciation against your home currency, and the FX spread at exit. Output is the realistic USD-realised return you should underwrite against.
The headline number the broker put in their deck. Typically 8–16 percent for Bali villa pitches.
Corridor selection sets the operator-actual yield discount band we apply (see methodology below).
PT PMA carries higher annual compliance but lower exit FX drag.
5–7 years is the editorial-recommended hold window for Bali leasehold villas.
If you buy a 30-year leasehold and hold 7 years, this is 23. Lease decay accelerates below year 22.
Realistic adjusted return
3.1%per year, after adjustments
Broker said: 12.0% · Reality: 3.1% · Haircut: 8.9pp (74%)
| Adjustment | Impact (pp) |
|---|---|
| Operator-actual vs broker base case | −3.6 |
| IDR drift against USD | −4.0 |
| FX spread on rental + exit repatriation | −0.78 |
| Year-25 lease decay drag on exit value | −0.48 |
| Total annual drag | −8.9 |
Five-year cumulative drag on $500,000 principal: $221,500 of foregone return vs the broker's projection.
How to read the haircut
Severe gap (over 6 percentage points). The projection is either using a peak-only base case or includes capital appreciation as if it were rental yield. Walk away or demand a fully reframed underwriting with operator-actual data. See the Exit Modelling framework for how to rebuild the model from scratch.
Where to go from here
Common questions
What this calculator does and does not tell you
What does this calculator actually adjust?
We strip five quietly omitted variables out of the broker-quoted yield: operator-actual underperformance vs sponsor base-case (typically 25 to 35 percent corridor-dependent discount), Indonesian rupiah drift against your home currency (3 to 5 percent per year structural), retail bank FX spread on rental + exit repatriation (200 to 400 basis points versus broker-level FX at 5 to 15 bps), the year-25 lease decay drag on exit value (accelerates below 22 years remaining), and PT PMA annual compliance burden if structured that way. The output is the realistic adjusted return you should underwrite against, not the paper number the broker pitched.
Why do brokers overstate the yield?
Not because they are dishonest individually — because the brokerage economy compensates closing, not realistic exit modelling. Standard broker projections use peak occupancy (75 to 85 percent), peak ADR, no IDR drift adjustment, no FX spread, no operator-actual discount, and no lease decay. Every one of those assumptions is internally defensible at the deal table; collectively they overstate realistic USD-realised yield by 30 to 50 percent. The buyer who signs without a reality check absorbs the gap as a quiet IRR erosion over the 5-year hold.
How accurate is the corridor discount calibration?
The corridor discount band (25 to 35 percent) is calibrated against operator-actual P&L the editorial desk reviews quarterly across properties in Canggu, Uluwatu, Sanur, Nusa Dua, Ubud, and Berawa. Canggu and Pererenan run higher discount (30 percent) due to licensing volatility and seasonality compression on the shoulder. Uluwatu and Bukit run 35 percent due to wider operator quality dispersion. Sanur, Nusa Dua, Ubud sit at 25 percent due to more predictable corridor demand. The discount is a starting point, not a final figure — operator-specific track record matters more than corridor average for any individual deal.
Why does IDR drift matter for a foreign investor?
Because Bali villa cash flows are denominated in IDR but the foreign investor measures return in USD, EUR, GBP, AUD, SGD, or JPY. Bank Indonesia and IMF historical data show structural IDR depreciation averaging 3 to 5 percent per year against the USD over the past 15 years. A villa returning 9 percent gross IDR-denominated yield delivers approximately 5 percent USD-realised yield once 4 percent annual IDR drift is netted out. Across a 5-year hold this compounds to a 20 percent reduction in cumulative return versus the IDR-paper projection. The calculator pulls home-currency-specific drift rates from published reference data and applies the appropriate drag.
What is the difference between gross and net yield in this model?
The calculator works against the broker's quoted net yield — which is supposed to already subtract operator fees, OTA cuts, maintenance reserves, and PPh Final tax. Most broker projections inflate this net figure by quietly using peak occupancy and peak ADR. The "realistic adjusted return" output is what your USD-realised IRR will more honestly look like across a 5-year hold after the five stripped variables. Gross yield is not directly modelled here — if your broker quoted gross, multiply by roughly 0.60 to 0.70 to approximate net before running the strip.
Methodology — how this calculator adjusts the broker's number
Operator-actual vs broker base case
Broker projections typically use peak occupancy (75–85 percent) and peak ADR. Operator-actual data shows realistic blended occupancy runs 55–70 percent across most Bali corridors. We discount the broker's yield by:
- Canggu & Pererenan: 30 percent
- Uluwatu & Bukit: 35 percent
- Sanur, Nusa Dua, Ubud: 25 percent
IDR drift against home currency
The Indonesian rupiah has depreciated against the USD at an average of 4.0 percent per year over the past 15 years. We apply currency-specific drift drag based on Bank Indonesia + IMF reference data. This drag compounds — over a 5-year hold it removes roughly 20 percent of the IDR-paper return.
FX spread on repatriation
Retail Indonesian banks charge 200–400 basis points spread versus interbank reference. Broker-level FX (IBKR, Wise Business, Saxo, Interactive Brokers) runs 5–15 basis points. The spread applies to both rental repatriation and exit-day repatriation. We assume 50 percent of rental flows through and the full exit value.
Year-25 lease decay
Bali leasehold values decay non-linearly as remaining term drops. Below 22 years remaining, exit value falls 25–30 percent vs the same villa with 28 years remaining. Below 15 years, the buyer pool compresses sharply. We model this as an annual exit-value drag based on the lease tenure at exit you input.
PT PMA compliance
If you select PT PMA, we apply USD 3,000 annual compliance cost amortised against assumed USD 600k average principal. This shows up as a 0.5 percentage point annual drag in the base case.
This is an educational underwriting aid, not legal or financial advice. Run your own model on the specific villa before signing. The editorial methodology documents how we source the corridor and currency benchmarks underlying this calculator.