Savvy Investing for the Future

Owning a home in Israel has never been easier or more attractive, particularly if you buy Israeli real estate off-plan.

During the past 6 months, it is probably fair to say that most Jews around the world have at least thought about moving to Israel! Whether during the early months of the Covid-19 pandemic, when Israel outperformed every other country in reducing the rate of infection, or when the ugly riots and the divisive election campaign across the United States threatened to turn anti-Semitic, or when Islamic terrorists reappeared on the streets of France and Austria.

Whether Aliyah is in your long-term or short-term plans, investing in the construction of your own home in Israel makes sense economically. No other investment guarantees you a 20% return over three years! With interest rates below 1% in most countries, it makes sense to invest your savings in an inflation-proof, profitable and practical real estate project in Israel.

Buying Israeli Real Estate Off-Plan

Buying properties off-plan is how generations of Israelis have managed to afford their own homes.  This means buying an apartment from a contractor before the building is built, and choosing how you want it laid out and decorated. The financial structuring makes it easy for families who are not wealthy to put down 50% at the start of the process, and borrow the remaining cost of the property only when the final payment is due. Building apartments generally takes between two and four years, and many purchasing contracts are structured such that you only need to pay the balance of the purchase price when the building is almost complete.  

Savvy investors will buy two apartments off-plan in the same building and quickly sell the first one when it is completed to fund the purchase of the second. Since off-plan projects typically appreciate by 20% between purchase and completion, you can recover the full cost of one apartment and use it to pay for the second.  Another option is to take out a mortgage for the 50% payment and pay for it with rental income from letting out the apartment, either to long-term tenants or for short-term holiday rentals. There are many projects throughout Israel that offer different incentives, such as paying 20% on signing and 80% on completion. 

Off-Plan Investing By the Numbers

The Israel Property Network has a number of very attractive off-plan properties that are being snapped up by overseas buyers. For example, a four-room apartment  in Ra’anana can be purchased today for 1,975,000 NIS (approximately $575,000) which means putting down a deposit of $275,000 now and paying approximately $300,000 (at the prevailing exchange rate) when it is completed in 2022. By then, the apartment should be worth around 2,370,000 NIS, based on current price trends, and you could sell it for a profit of 395,000 NIS, representing a 20% profit on your original investment. Alternatively, you could rent it out to cover the cost of your mortgage. If you took a mortgage for 1,000,000 NIS, the payments would be approximately 4,700 per month, and this apartment should be rentable at 6,500 to 7,000 NIS per month.

Another of the advantages of buying an Israeli apartment off-plan is that you can specify how the rooms are laid out and choose your kitchen, bathroom fittings, tiles and other decorations to suit your taste. If you are unable to come to Israel to sit with the contractor and make these decisions, we can set you up with an experienced interior designer, who will take care of all the details and ensure that the project remains within your budget. 

Why Choose the Israel Property Network

At Israel Property Network, we have a team of lawyers and financial experts, property managers and interior designers, who can help you take care of every aspect of buying an Israeli apartment off-plan and online. We can help you with the financial structuring to suit your budget and your future plans, and our lawyers take care of the due diligence to check that the contractor has all the right paperwork for the project.

We recognize that you may not be able to speak with an Israeli bank at this time, but we can connect you with an experienced mortgage broker. Our national network of local real estate experts can recommend the most appropriate projects for your budget, since they know which are the up and coming areas where apartments will increase in value and be easiest to rent.. 

We have been working with families from all over the world who recognize the benefits of pooling their resources to buy a family property in Israel. Even if you have only a few thousand dollars or pounds sitting in a bank account, shrinking every month as inflation exceeds interest rates, then now is the time to pull together enough for a down-payment on an off-plan apartment in Israel. Within 3 years you could be sitting in your own property in Israel, and watching its value appreciate!

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