Bali Property Investment

The Irish Bait-and-Switch

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Fireside Chat with John McGuire

 

It was a warm but not hot Saturday evening at the Bali Time Chamber, up in the refreshingly cool mountains of Bali, Indonesia. Tonight’s guest speaker and fire-side-chat entrepreneur was John McGuire, a retired fin-tech entrepreneur from Wexford, Ireland. John sat in the center of the outdoor dining table sporting a men’s Balanise dress and hat. The men and I were eager to learn about the many properties John has launched in Bali, Dubai, and Tuscany.

So what’s the Irish Bait-and-Switch?

This article shares some insightful investment opportunities in Bali that the men gathered to learn about. What we didn’t anticipate was learning about the charitable efforts John was involved. And so, by the end of our fireside chat, our hearts caught the bait, and our minds switched from wealth creation to charity and giving back.

Well done, John.

 


 

Quick Intro

 

Originally from Ireland, John’s mainstay location is in Dubai. He liquidated his Irish assets and made a run for it to Dubai about eight and a half years ago.

John takes joy in mentoring young people. He’s currently mentoring six start-ups and has mentored over twenty companies in the past decade.

John’s background in fin-tech. He knows his money (fin) and technology (tech).

In addition to John’s properties in Indonesia, John’s property investment portfolio includes two apartments and one villa in Dubai, two in Abu Dhabi, and one in Tuscany.

 


 

Purchasing Property

John found himself in Bali about five years ago. He spent some time in the Gili Islands, a group of three beautiful islands with 4K-level turquoise seas that make the latest 96-inch smart TV malfunction. While on the islands, he found some really “cool villas” and thought, “I could do this. So, I looked at about 20 houses with land and quickly made my first purchase.” Behind John’s jovial and personable demeanour, he knows how to invest and does it at fibre-optic speeds.

“My first purchase was a three-bedroom house with a straw roof. I put in a new straw roof, as I wanted to keep it old-style. I put it on Airbnb and rented it out long-term because of Covid.”

In front of his land was a giant field. When it was available on the market, he bought it too. “I built two more villas, and they’re currently on Airbnb making above-average earnings.”

John shares his strategic design choices in the construction of the houses. “They all have swimming pools with modern and upscale finishes and amenities.”

The latest project was a Joglo-style A-frame house. The bedroom is upstairs, while the living room is downstairs.

 


 

At this point, the men were intrigued and couldn’t hold back their questions.

Q: How did you get into this?
A: I got in by accident. I was a day trader, and the market was going all over the place, so I started trading stocks for cash and buying property.

Q: Has the ROI kept up with the average index?
A: Yes. I’ve been over the market by quite a bit. I built out all the marketing, including Instagram and websites, because I wanted to learn.

Q: Is land and labour cheaper here?
A: Yes.

Q: Here, you lease the land?
A: Yes, typically 20-30 years. I had a deal with the owner to add another 30 for my daughters.

Q: Do you hold the assets in an Indonesian PMA (like an LLC)
A: Yes. Two companies, one for the land and one for the property management. I’ve found four friends in Dubai who are investing in Bali. I’m helping them get the land and build villas, and now my property management company has seven clients.

Q: Are there any trap cash issues?
A: They don’t like you taking money out of the country.

Q: You need permission to take money out?
A: There’s 20-something withholding tax—11% tax on rental income.
Definition: 100 sq/m of land is considered an area (ah-ra).
I have about 14 acres.

Q: Villa size?
A: About 250-something square meters (2691 square feet).

Q: Why not buy the land?
A: Because they only lease the land. Leasehold is the only way you can go. It’s worked for me so far. I got into a 30-year lease and negotiated another 30 years after. You pay upfront.

 


 

Back to property hunting

John eventually fell in love with a piece of property (house and land). He asked himself, “How do I get money here?” John hit the local ATM and took out as much cash as possible from all his cards! Outside was an outpost, an incubator for start-ups. He went in and asked for an A4 envelope. He put the money in an A4 envelope, gave it to the guy, and asked him to sign off that the money had been transferred to the property. “Then I headed to the airport to catch my flight home!”
John reveals, “They want the cash up-front for the full 25-30 year lease.”
More and more locals know and trust John and that he can pull in investment.

There are four classes of property in Indonesia.

Green Zones
Areas for conservation like protected forests and agricultural activities, where building is highly restricted to preserve natural resources and biodiversity.
Yellow Zones
Designated for residential purposes, including housing and local communities, suitable for building homes or residential development projects.
Pink Zones
Designated for tourism-related and industrial activities, like hotels, restaurants, and manufacturing, offering more building options and typically located near beaches and business districts.
Red Zones
Prone to natural disasters, with poor soil structure or contamination, and building here is generally advised against due to high risks.

 

Read here for more.
 


 

John feels that Nyuh Kunning is one of the cleanest villages in Indonesia. The kids clean up the community areas before going to school. John feels strongly about the country’s stability and future. It helps when you have a relationship, and your neighbour is the president of Indonesia, and his son is coming into power.

Interesting fact: The president lives on land once owned by Linda Garland, an Irish architect who built the house. Linda Garland, who was referred to as the Queen of Bamboo, became very famous through her architectural work designing homes for global rockstars who wanted a Bali pad. The list includes Mick Jagger, David Bowe, and Sir Richard Branson. She passed away, and today, her Indonesian son is the CEO of the World Bamboo Organization.

 


 

More questions

 

Q: What is your IRR (internal rate of return)?
A: I think I’m pulling in about 33% per year. I’m talking about $66K USD on just one house (gross revenue).

Q: What is your operating costs?
A: Less than 15% operating costs.

Q: How much can you build one of these for?
A: Depends on your finish. I built one for about $240K, decided to upgrade, and paid out about $280, including land.

Q: So… What’s your ROI?
A: It’s about a 4-6 year payout. I built the houses well, based on Western standards. The houses are earthquake proof.

Q: What else can you tell us about the properties?
A: Right in the middle of the village is a football field with a building.

 


 

The bait-and-switch

 

Around this time, John moved off the topic of wealth creation and transitioned to the thing he’s even more passionate about: Charity.
 

“Anytime I re-enter the country, I try to bring things like vitamins and toothbrushes. In some places, there’s only one toothbrush per two to three people who share.”

 

 


 

Bumi Sehat

Their tagline is “Healing the world one baby at a time.” This is the birthing clinic set up by Ibu Robin in 1995. John has sponsored the clinic for five years now. Ibu Robin is the midwife nurse and founder of the foundation. She has three clinics now. It’s a non-profit clinic focused on helping women deliver their babies safely at zero cost to the locals.

Donate Here

 


 

Bali Street Mums Project

John and his team help women with children who beg on the streets to take them off the streets. “We give them refuge, a safe place to stay, and food, and we encourage them not to return to the streets but to join the workforce and support themselves. We help the women transition to work by teaching them skills like sewing and craftwork.”

Donate Here

 


 

The Bumis

“I’ve also set up a junior rugby team recently.” John’s dream is to provide the children in the village of Nyuh Kuning with a rugby ball and access to fitness, training, sports and health through exposure to rugby.

To learn more about how you can help support the Bumis Junior Rugby, contact John by email or WhatsApp. Don’t have this info? Give us a shout!

 


 

A few last questions

 

Q: Where are the men? Are they not in the picture?
A: They’re not really in the scene.

Q: On the investor side, are you helping people from 0-100 invest in Bali?
A: Yes. I’m doing it to bring more money into the country and help more people here.

Q: How do you see Bali changing? Do you see it continue to grow?
A: Speaking with the president of Indonesia, my neighbour, I can assure you he’s committed to continuing to grow and strengthen the country.

 


 

Investing with Heart

 

John regularly welcomes the village kids to his villas for pool parties! In addition to property investment and building villas with pools, he’s taught us how to invest responsibly.

Thank you, John, for showing us how we can invest while giving back.

The Author