Returns
What a villa in South Lombok can earn: a transparent rental model
In short: a three-bedroom villa listed for short stays in Kuta earned about IDR 770 million (US$42,700) gross in the year to September 2026, at an average of IDR 4 million (US$224) a night and 54% occupancy, according to AirROI. After platform fees, the 10% local tourist tax, management and running costs, our model nets about US$15,600 a year before income tax: around 5.7% on a total investment of US$274,000. Better occupancy lifts that towards 8%; a weak year cuts it to under 4%. Capital growth comes on top.
Marketing for villas in Indonesia often quotes gross yields of 10% to 15% or more. Those figures are usually before costs, or based on projections. This article does the opposite: it starts from published market data and takes every cost off, line by line, so you can replace our assumptions with your own. Rupiah is converted at about IDR 18,000 to the US dollar.
Step 1: what the market data says
Two data providers publish short-term rental figures for the area. They measure differently, so we show both.
| Source, period | Area | Average nightly rate | Occupancy | Listings |
|---|---|---|---|---|
| AirROI, Oct 2025–Sep 2026 | Kuta, all listings | IDR 1.92 m (about US$107) | 39.7% | 225 |
| AirROI, same period | Kuta, 3-bedroom entire homes | IDR 4.04 m (about US$224) | 54% | 23 |
| AirDNA, year to Sep 2026 | Central Lombok, all listings | US$109 | 61% | 1,547 |
Two things stand out. Larger villas earn far more per night and fill more nights than small rooms: in Kuta, three-bedroom homes averaged IDR 769 million a year in gross revenue against IDR 243 million for one-bedroom units (AirROI). And the season matters: August averaged about twice the revenue of February.
| Season (AirROI, Kuta) | Months | Revenue per listing per month | Occupancy |
|---|---|---|---|
| High | June to August | About IDR 43 m | 52% |
| Shoulder | May, September, October | About IDR 31 m | 48% |
| Low | November to April | About IDR 26 m | 43% |
Step 2: from gross bookings to net income
Our model villa is the one costed in our build cost guide: three bedrooms, about 200 m² with a pool, total investment of about US$274,000 including land. We use AirROI's three-bedroom averages for Kuta.
| Line | US$ a year | Assumption |
|---|---|---|
| Gross bookings | 42,700 | IDR 769 m average for 3-bedroom homes in Kuta |
| Booking platform fees | –6,400 | 15%; Airbnb's host-only fee is 15.5% (Hostfully) |
| Local tourist tax (PBJT) | –3,900 | 10% of the room price, assumed included in the nightly rate |
| Net room revenue | 32,400 | |
| Management fee | –6,500 | 20% of net room revenue; our assumption |
| Running costs | –9,000 | Staff, electricity, water, pool, internet, supplies, insurance, land tax; our assumption |
| Maintenance reserve | –1,300 | 3% of gross bookings, for repainting, repairs and replacing furniture |
| Net operating income, before income tax | 15,600 | |
| Net yield on US$274,000 | 5.7% |
Income tax then depends on your structure and residence: see how rental income is taxed.
Step 3: what if occupancy is higher, or lower?
Keeping the same nightly rate and costs, and changing only occupancy:
| Scenario | Occupancy | Gross bookings (US$) | Net operating income (US$) | Net yield |
|---|---|---|---|---|
| Weak year | 40% | 32,700 | 9,900 | 3.6% |
| Market average, 3-bedroom Kuta | 54% | 44,200 | 16,500 | 6.0% |
| Well-run, well-reviewed villa | 65% | 53,100 | 21,700 | 7.9% |
Because running costs are largely fixed, each extra point of occupancy goes mostly to the bottom line. That is why management quality, reviews and photography matter so much. The base case row differs slightly from Step 2 because it uses 197 nights at US$224 rather than the AirROI annual average.
What the model leaves out
- Capital growth. The model counts income only. Any rise in the value of land and villa comes on top, and is the main reason many buyers choose South Lombok over a mature market. It is not guaranteed.
- Your own stays. Every week you use the villa in high season costs you that week's revenue.
- The first year. A new listing needs time to build reviews. Expect lower occupancy in year one.
- Leasehold. If you lease the land, your upfront cost is lower but the lease runs down; spread the lease cost over its term when you compare.
- Currency. Income is earned in rupiah. If the rupiah weakens against your home currency, returns fall in your currency.
How to read anyone's rental projection
When someone shows you a projected yield, ask five questions:
- Gross or net? And net of what exactly: platform fees, tax, management, running costs, maintenance?
- On what investment? Land included, furniture included, transaction costs included?
- Based on what data? Comparable villas' actual results, or a target?
- What occupancy? Anything well above the market average needs a reason.
- Who guarantees it? A "guaranteed return" is only as good as the company giving it, and is often priced into the purchase price.
Want this model run on a specific villa or plot? Ask us on WhatsApp and we will share the spreadsheet with our figures.
FAQ
Why are your numbers lower than other agencies'?
Because we take off every cost and use published market averages. A well-run villa can beat them; that is the upside, not the base case.
Do villas in Selong Belanak or Torok earn less than in Kuta?
There is less published data for them. Demand is more seasonal, but larger plots and views can command higher nightly rates. See Kuta, Selong Belanak or Torok.
Is a long-term rental an alternative?
Yes. Letting to a single tenant for a year earns less gross but has far lower costs and effort. Taxed as rent, it may suit owners who want simplicity.
What occupancy is realistic in year one?
Plan for below the market average while reviews build up, and keep a cash buffer.
Figures are illustrative, based on third-party data and our assumptions as of October 2026. Past results do not guarantee future income. See our investment disclaimer.