How to model the ROI of a Lombok villa — a real spreadsheet, line by line

Brochure ROI numbers are useless. This guide hands you the line items, the realistic ranges, and the assumptions you need to model a Lombok villa from scratch.

The five inputs that drive everything

1. All-in acquisition cost. Land + build + furniture + landscaping + pool + permits + management setup. Be brutal: the brochure number is rarely the real number. Add 12–18% for the items the brochure omitted.

2. Achievable nightly rate (ADR). This depends on zone, micro-location, and build quality. Reliable benchmarks for South Lombok 2026:

• Standard 2BR villa, 8min from beach: €110–165
• Premium 2BR villa, 4min from break: €165–245
• 3BR villa with view, Selong / Tanjung: €230–360
• Luxury 4BR+ on cliff or beachfront: €450–950

3. Achievable occupancy. First year: 50–62%. Year 2: 65–75%. Year 3+ steady state: 72–84%. Lower numbers reflect realistic OTA ramps for new listings.

4. Operating cost ratio. Not 15%. Real number for South Lombok 2026: 22–28% of gross before management fee. Below that range only if you self-manage and personally clean.

5. Management fee. Standard 20% gross. Negotiate to 15% on a 3-year contract with a clear performance clause if you're delivering serious volume.

A worked example: €245K Samudra-spec villa

We modelled this in detail in our honest ROI math article. Summary:

| Year | Occupancy | ADR | Gross | Op costs | Net | Net yield | |------|-----------|-----|-------|----------|-----|-----------| | 1 | 69% | €185 | €46,620 | €28,574 | €18,046 | 7.4% | | 2 | 78% | €192 | €54,720 | €31,540 | €23,180 | 9.5% | | 3 | 84% | €200 | €61,440 | €34,990 | €26,450 | 10.8% |

5-year IRR including 7% annual land appreciation: 13.4%.

That's the realistic story. Anyone pitching you 18%+ IRR is using either fantasy occupancy or fantasy operating costs.

Scenario modelling — three what-ifs

Scenario A (negative): occupancy stuck at 60%. Year-3 net drops to 6.8%, IRR collapses to ~9.5%. Manager change usually fixes this.

Scenario B (negative): rupiah depreciates 15% over 3 years. Net rental income in EUR drops proportionally; capital appreciation in EUR drops too. IRR ~10.5%. Hedge with an Indonesian-denominated mortgage if available.

Scenario C (positive): direct bookings reach 40% of nights. OTA commissions drop by 60%, year-3 net rises to ~12.4% net yield, IRR ~16%. Earned by investing in own-website + email list.

Capital appreciation — the disciplined view

Selong Belanak inland-plain land appreciated 38% over 2022–2025 (BPN data). That's 11.4% CAGR. We're underwriting 7% CAGR for 2026–2029, slowing to 4% as the market matures.

Tanjung Aan: 6% / 4%. Are Guling: 9% / 6%. Senggigi: 3% / 3%. Gili Air: 8% / 5%.

These are deliberately conservative. Models that assume continued 11% appreciation will look great on paper and disappoint at exit.

The exit — under-modelled by everyone

5–10 year exit options:

• Sell to another foreign buyer: standard. Liquidity 4–8 weeks via local agents at 6% commission. Easier in established zones (Kuta, Selong Belanak), harder in emerging ones.
• Sell to a local operator: common for properties at the cheaper end (€90–180K range). Local appetite is strong but pricing is in IDR — bring your own valuation discipline.
• Convert to long-term lease: if local market softens, switch to 11-month furnished rentals at €1,200–2,800/month. Lower yield but trivially easier operations.

The summary

Build the model on net yield, realistic occupancy, and conservative appreciation. If the IRR is still 12–14%, you have a real investment. If you have to flatter the inputs to get to 14%, you have a brochure.