The unstable global economy, underperforming shares, and unpredictable stock market have confused many investors who are now looking for a more stable and long-term investment, at a lower risk. One great solution is investing your money in real estate instead. Israel is an amazing country to invest money in the real estate market, and if you too are interested in investing in Israeli real estate, there are a number of things you will need to learn and know before taking your first steps towards being a homeowner.
Finding the property
Location
Investing money in real estate requires a certain amount of knowledge, correct information and a deep understanding of the local real estate market. Israel has 3 main cities – Tel Aviv in the middle, Jerusalem and the southeast and Haifa in the north. Although Israel is a small country and these cities are within a few hundred miles apart from each other, they each have a unique population, culture, and atmosphere and it is important you are aware of this before you invest.
The more central areas are definitely the most popular ones, but they are also the most expensive to invest in and might not be your first choice. A small property in a more suburban area of a major city may make your higher returns in the long run.
Size
Most renters in Israel live alone or with their spouse and look for a 1-2 bedroom apartment. Bigger apartments usually come with bigger utility costs and taxes which is also something to take into consideration.
A few more questions you need to ask before you choose the property you want to invest in are are – do you want to buy a new apartment or an existing one, what the tax implications of investing in different types of properties are and the necessary legal precautions you need to take once you have chosen your property.
You will need to protect your interests throughout the entire process in order to be able to make the best investment with minimum risk.
Buying the property
If you want to buy property in Israel you first need to get a land registration extract from the Land Registration Office, which will ascertain the ownership of the property. You will also need to check the building rights for the property in the Municipal records.
The written contract you sign must have the following details in it:
- A description of the property
- names of the different parties in the contract
- The agreed buying price
- The nature of the transaction
The sale agreement also needs to be reported to tax authorities and you will need to pay all related taxes. The transaction must then be registered at the Regional Land Registry office.
In Israel, Deposits are not customary. Both parties in the contract need to proceed to a binding contract right aways and an initial payment must be paid when signing the contract. The first payment can be between 20% to 50%.
In Israel, the buyer pays for the property over time and not in one go. To protect the buyer, a cautionary notice needs to be filled out at the Land Registry Office (Tabu) in order to prevent the seller from re-selling the property to someone else. Only after the property is paid for in full the title deed change can be executed.
To learn more about buying property in Israel, contact us and we will do our best to accommodate all of you real estate needs!