Whether you want to buy a vacation house, invest in an apartment, or would simply like to fulfill a lifelong ambition to make Aliyah, investing in real estate in Israel needs careful planning and considerations. Regardless of whether you are a local or a foreigner interested to invest in real estate in Israel, it is crucial that you have a trusted real estate, business and financial lawyer who can give you sound legal advice about your investment. You can tap the assistance of Israel real estate lawyers at David Page Law for this. , David Page Law is a top-notch financial, corporate, and business law firm that can give you valuable legal insights about real estate investment in Israel.
Buying and selling properties could grow your money, and making Aliyah can add a key spiritual and quality of life element to your life, but it is never easy. However, if you avoid committing real estate investment law mistakes, it is possible that you can stay on the right track. Read on to know the top 5 mistakes to avoid when investing in real estate in Israel.
1. Sparing on Research
When you want to purchase something big like a car, you take time to compare the overall performance and the specs of different brands and trim levels, you ask questions, and do more research to ensure that your purchase will make sense, and you ensure that title to the car is clear. The due diligence when purchasing a real estate investment should be more thorough. It is important that you learn more about the legal and economic fundamentals of the area where you want to purchase an investment. Learn about Israel’s economic growth, real estate prices and recent sales, demographic factors, and rental rates and vacancy rates in the city to see the real picture, as well as looking into the legal foundations for the potential real estate property itself, which in Israel can be complicated.
2. Obtaining Lousy Financing
Many real estate buyers secure lousy financings like variable loans or interest-only loans. But, in this kind of financing, when interest rates increase, they suffer. If you are planning to invest in Israel and would like to seek financing from the bank, it is important that you understand the country’s law. In Israel, a resident can receive a higher percent financing while a foreigner can only receive up to lower percent financing.
Also, take note that banks in Israel do not appraise the property you are buying for its entire amount. It is therefore crucial that you get a realistic appraisal prior to signing a sales contract. Additionally, your mortgage will not include purchase fees like lawyer’s fees and purchase tax. it is best that you work with a reputable Israel real estate lawyer like those at David Page Law to help you with the process.
3. Miscalculating Expenses
There is more to owning a real estate property in Israel than just paying the mortgage. Some investors fail to consider the maintenance expense incurred by tending the garden, mowing the lawn, or painting the shed, as well as the extra municipal taxes (Arnona) to be paid for properties that are unoccupied for most of the year, as well as the taxes associated with purchasing a property (Mas Rechisha) and appreciation (Mas Shevach). Aside from this, there is also the cost of furnishing the property, several structural expenses, and property and insurance taxes. Even the cost of property hunting is often not included when computing expenses. This is one of the reasons why many real estate investors are not only house poor but also cash poor. From a legal point of view, as well as from a financial and accounting point of view, all of these expenses should be made clear in advance.
4. Failing to Stress Test the Investment
One of the major mistakes that investors commit is failing to stress test the prospective real estate investment. It is important that you review the latest income and expense scenario before the purchase of the property. This is very helpful especially when planning to buy a rental or vacation property or Aliyah residence property. Identifying the potential risk against your overall target for the investment will help you identify how your upcoming investment will properly fit into your portfolio.
5. Not Tapping The Right Team
You have to know your own strengths and weaknesses before you start investing. Tapping a team of experts can help you play your strengths and assign to the team your weakness. Many investors think that they are capable of doing everything themselves. However, if you plan to create a portfolio, it is tough to take into account all the legal details to keep your investments in great shape.
If you are eyeing a real estate investment in Israel and would like to hire an Israel real estate lawyer, you can seek the help of David Page Law. The firm does not charge hourly billing and is known in Israel for its expertise, client-centered lawyering, and integrity. You may visit the firm’s website at www.davidpagelaw.com to know more.