10 Tips from a Lawyer for Anyone Interested in Buying Property in Israel

Israel has become the center of attention for international real estate investors, since it offers such a great variety of real estate investment opportunities, to suit any style or preference. This small country offers a myriad options for investing in real estate of all types, just as you would find anywhere in the world, but in Israel these are affordable and concentrated over a small area. Prices in Israel – excluding particularly outstanding luxury properties – present a great range of prices all over the country, and plenty of potential for improvement and good returns. Below are 10 tips from a lawyer, for people interested in buying property in Israel.

Feasibility study by a lawyer

If you know where you intend to buy property - that is fantastic. Otherwise, you should request a professional review from a law firm specializing in real estate transactions in Israel. The reason for this is simple – in addition to their thorough knowledge of Israeli law, such lawyers are usually up-to-date on all matters related to the release of lands for construction and changes in properties' statuses, so that they can reliably assist you regarding the deal's feasibility and the risks it entails.

Understand the purpose of your purchase, so that you know where and what to buy

In Israel, the most important thing is to understand the purpose of your purchase, so that you know where and what to buy. If you are looking for property for lease, whether residential or offices, you should buy at an area with existing commercial and business activity and residents. A project that is still only on paper will not provide you with this information; however, an inspection by a legal firm specializing in this field will either confirm or refute your chances of earning future returns from it. Such a study will pertain to your counterparts to the transaction as well as their location.

Prices are an excellent indicator, however…

Check and verify your data again and again, but do not suffice with only last year's figures. The data for many of Israel's regions does not lie – you can find amazing upward trends in prices and returns, but these are evident only over the course of several years. This is not merely the result of inflation or increases in the cost of living index, but the result of gradual development which has not yet peaked, and which is consistent and stable. Together with additional data, you can form a more accurate picture of the return you stand to make there.

Search for a property according to your preferences, not just by profitability

Indeed, it is best if your personal preferences match the profitability of the property you wish to buy in Israel; in most cases, however, whether the property is intended to generate returns or for residence, you may discover that you can find good properties to invest in by following your heart. This actually makes sense – it is very probable to assume that if you love the location, others will also love it and see its charm. This will make it easier for you to receive a good return from such people when the time is right.

If you do not fall in love with any property, go with your brains

If you believe that the deal is good, but are not too crazy for the property, and still have not yet found any other property that you love – do not miss the golden opportunity to make a big profit. The profit on property that you bought rationally may assist you in buying your dream property, perhaps even in the near future.

Take an interest in the real goings on, so that you understand whether business forecasts are correct

Israel is developing quickly and fluctuations are hard to forecast. Therefore, if some people imagined that following the 2014 Israel-Gaza Conflict, residents of the Gaza envelope region will be leaving in droves – the reality is that it is actually blooming, with new residents rushing to its rural communities. This means that what you hear on the news is not always true in business. Israel is a special country, where people follow their hearts. When choosing your property, you should also take this fact into consideration, so that you correctly identify the next boom.

Consult a specialist lawyer to understand Israeli law

Israeli law on the purchase of properties is different from other countries' law, due to the structure of land ownership. In Israel, the state is the largest landowner, and holds land through the Israel Land Administration and different organizations that redeemed Israel's ahead of the country's establishment. This changes the entire picture, and so, even if sometimes you believe that the seller of the property is the legal owner of the property or land, you may discover that this is not always the case, and that you may be dealing with a long-term lease only.

Do not judge a book by its cover – judge its potential

The Israeli mix of old, dilapidated buildings and their high potential calls for a review of other places that provide examples of ruins turned into palaces. Israel may have a long history of interesting architecture, but until a few years ago it had no culture of preservation and reconstruction. At present, developers work wonders and make a fortune on old properties whose potential they identify and have the vision to realize. The Sarona Project is one such case, as are old homes turned into spectacular and highly sought values or boutique hotels, such as the Hotel Montefiore in Tel Aviv or the Market House Hotel in Jaffa. This naturally requires that you learn a little more about Israeli culture.

Buy where you want to live

One interesting phenomenon is the empty luxury towers you find mainly in Tel Aviv, where people bought apartments as an investment, but do not reside in them. If you intend to invest without moving in, this may be the right choice for you; however, if you intend to live in the building, look for one that is already full of life and residents – such as the YOO Towers or the Sarona Project. If your property is for lease, you will have a better chance of finding tenants. Or maybe – who knows? – you might move in yourself.

But the important thing is – do not give up on your dream

On the one hand, you should not rush headlong when warned that there is no chance that the land will be released for construction, or that no people will want to live there. On the other hand, take a well-calculated risk if you truly believe that the opportunity is there. Israel has quite a few 'sleeping beauty' that took their time waking up – especially in peripheral regions. Take for example Yeruham, Ashdod or Ashkelon, where the momentum fundamentally changed the picture, making these towns' future very promising.


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Eli Shimony Attorneys-at-Law specializes in the fields of Israeli civil – commercial and intellectual property law. Our firm deals with consultation and legal representations for transactions and contracts. In addition, our firm deals with providing consultation and managing intellectual property cases such as: registration of trademarks, registration of patents in Israel, protection of copyright and commercial design, consulting businesses with intellectual property and representing them in court.