Investor’s guide
Buying to let in Israel
Buying is the easy part. What decides the return is what happens in the years that follow: the rent actually collected, the charges, the vacancy and the state of the property when the tenant leaves.
The headline yield and the real one
A gross yield takes one line: annual rent divided by purchase price. It means very little, because it ignores everything that gets deducted afterwards.
The useful calculation is this one:
| Line | What to keep in mind |
|---|---|
| Annual rent collected | Rent actually received, not the figure in the listing |
| Less vacancy | The weeks between two tenancies, to be budgeted from the start |
| Less owner’s charges | Works voted by the building, insurance of the structure, taxes on you |
| Less upkeep | Water heater, air conditioning, plumbing, refresh between tenants |
| Less management | One month’s rent a year with GII, or your time and your flights if you do it yourself |
| Less tax | Depending on the regime that applies to you, to be checked with an accountant |
| = Net yield | The only figure that lets you compare two properties |
We do not publish an average yield. It depends on the city, the neighbourhood, the floor, the condition and the date of purchase. What we will give you is a documented rent range for a specific property, which is what makes the calculation possible.
What drives the rent, street by street
Two apartments of the same size in the same city do not let for the same price. The criteria that come up most often in Israel:
- Distance to the sea and the view. Both are paid for, in rent as in purchase price.
- Lift and floor. A third floor with no lift rules out a large share of applicants, families and older tenants in particular.
- Parking. In dense neighbourhoods, an allocated space weighs heavily on the decision.
- The mamad. The reinforced safe room, standard in newer construction, is a deciding factor for families.
- Kitchen and bathrooms. The first thing viewers look at, and what makes them accept or negotiate the rent.
- Schools, shops and transport. They widen the pool of applicants, which shortens vacancy.
The Israeli lease, and what surprises foreign investors
Short terms, renewed
Residential leases usually run twelve months, often with an option to extend negotiated at signature. That means anticipating each renewal rather than discovering it.
Guarantees that stack
Deposit, guarantor, Shtar Chov, guarantee cheques and tenant liability insurance are not alternatives. It is their combination, set out in the contract, that protects the owner, and all of it has to be in place before the keys change hands.
Charges split explicitly
Vaad bayit, arnona, water, electricity: who pays what is settled in the lease. A contract that is vague on this produces a dispute at the first reconciliation.
A mostly unfurnished market
Most long-term lettings are unfurnished or part-equipped, with the kitchen fitted and air conditioning installed. Furnishing a property does not automatically raise the rent, and it does add an inventory to check on the way out.
The mistakes that cost the most
- Chasing the highest rent. Two months of vacancy wipe out a year of over-renting.
- Accepting a weak application to move fast. Arrears are resolved in months, not weeks.
- Signing a generic lease. The contract only matters on the day of the dispute, and by then it is too late to fix.
- Skimping on the entry condition report. Without dated photographs, the hand-back is negotiated from memory.
- Leaving the keys with a relative. Goodwill replaces neither availability nor contractual responsibility.
- Leaving the property empty « for now ». An unoccupied apartment deteriorates, and the charges keep running.
Buying soon?
The best time to talk about management is before you sign, not after. A serious rent assessment on the property you are looking at sometimes changes the decision, or the negotiation.
We can tell you the rent range to expect on a specific property, which works genuinely improve its lettability, and how long letting is likely to take depending on the time of year.
Good to know
Investor questions
How is rental income taxed?
Rent from residential property in Israel falls under Israeli tax rules, with several possible regimes depending on the total collected and on your own situation. If you are a US citizen or green card holder, you also have reporting obligations at home, whatever you pay in Israel.
Thresholds and rates change, and your personal circumstances change the answer. We point you to an English-speaking accountant in Israel and supply the rent statements they need. Tax advice itself is not something we provide.
Do you handle furnished lettings?
Yes. The Israeli market rents mostly unfurnished or part-equipped, with a fitted kitchen and air conditioning, and we handle furnished lettings as well, adjusting the inventory in the condition report accordingly.
We do not handle short-term holiday lets. That is a different business with different rules.
Which areas do you cover?
Our office is in Netanya, 26 Dizengoff, with the entrance on Kikar Atzmaut. We work in Netanya and the surrounding area, and in the main cities where overseas owners buy. The simplest thing is to call us with the address: if we are not the right people for that property, we will say so.
What does management cost?
Our fee is the equivalent of one month’s rent per year. On twelve months of rent collected, one month pays for the complete management of the property.
From the third property onwards, the fee drops by 10 percent. Drafting of leases by the law firm is included, with no surcharge.
Get a rent assessment
Send us the address or the listing link. You get an argued rent range and the points to watch on that property.