You Purchased A Property…
(These are the thoughts of CapitIL Real Estate Agency Sales Director Ben Levene.)
You did it! Your property search is now over!
After months of property searching, amending contracts, and doing your due diligence, you now have a freshly signed copy of the contract for your new property.
There is only one slight issue. You are not planning on moving to Israel for a couple of years, and you now have a gorgeous new property just sitting empty waiting for you.
There are a few options one can choose to take at this point.
Irregular use/leaving the apartments empty
Let’s examine each option to see which may be right for you.
Irregular Use/Leaving Your Apartment Empty
Insurance may require a weekly visit to your property, and even if they do not, you definitely should.
I prefer not to rely on family and friends and would personally hire a property manager for such a matter.
It is extremely important to regularly check on an empty apartment for all kinds of reasons including water, electricity, and security.
Leasing your apartment can be a great way to earn passive income and not leave your apartment empty. I highly recommend hiring a property manager so that the tenant has a point person in the country.
With long-term renting, you have the security of rental checks and knowing the apartment is being taken care of on a day-to-day basis. Additionally, the tenant becomes responsible for paying all bills including Arnona (municipality tax), vaad bayit (housing committee), water, electric, gas, and wifi.
Make sure to use a lawyer so that all your rights are protected. You will have to fix anything that breaks when it is the apartment's fault, such as plumbing, but generally, tenants take care of everything themselves. It is generally pretty simple and does not require too much work.
Short-term renting is slightly harder in Israel because the government is talking about taxing all kinds of short-term rentals in different ways.
Please make sure you seek the right legal and tax advice. Despite this, short-term renting is definitely still an option. The advantages included prices being extremely high right now.
You can do quite well in certain areas like the City Center and King David Street- better than long-term rentals. However, in more residential areas you probably will not make as much as a long-term renter.
In that case, why should you do short-term rentals? If you are looking to use the apartment slightly for yourself, family, and friends, but also want to make a bit of cash on the side, short-term renting can definitely be fitting for your situation.
Short-term can be great if it is in a prime location, and you can make a great return. I highly suggest a top management company help you because it is an incredibly arduous process. It will be worth every penny to have everything arranged for you, but it will dig into the return.
When people ask me what to do, there is no correct answer. Every situation is completely individual and depends on factors such as financials and personal preference.
Consider that if it is not being lived in, hire a management company to take care of it.
Long-term rental is a great option but you will not be able to use it until the lease ends, and you must scan applicants properly. If you do short-term rentals, understand the returns properly and know that maintenance will be much more.
In every case, get legal advice, advice on insurance, and an accountant's advice. I also highly suggest meeting and hiring an expert property manager.