Most real estate investors in Israel invest in apartments in Israel
# Entrepreneur of the Week Amnon Bar
# Post 2
Hello everyone, I thank you for your positive comments on the first post in the series, nice to receive compliments.
Most real estate investors in Israel invest in apartments in Israel, receive a 3% return and are happy with their share. When I remark to them that this is nonsense and offer them to think about investing less money, higher return and lower risk in the US, then in most cases the reactions are: what I lost there, I want to see the apartment I bought, how middle tenants are so far away, etc. I answer: After all, in order to achieve a low purchase price, investors in the country choose to invest in the periphery. Think about rent management in the periphery over time. Suppose the investor lives in Haifa and the property in Kiryat Shmona or the investor lives in Tel Aviv and the property in Be'er Sheva or Dimona which are both great places. Suddenly one evening the landlord gets a call from the tenant that the water drain in the shower is clogged and the bathroom is flooded. What will the landlord do? Looking for a plumber online? Will argue remotely about the price of the repair? The abbreviation is a headache. And what about finding tenants, signing a contract? Each time the landlord will give up a work day to travel to the property?
And most importantly, what if the tenant does not pay rent, when unfortunately it happens in the country quite a bit, how will the landlord deal remotely with the problem?
In my experience, and from the experience of the US real estate investors in the group, investing in American real estate for rent through a local agent and management company solves all these problems if they work properly. It is important to note that the transparency of information that exists in the US on the Internet allows you to get a lot of information about homes for sale, prices of homes sold, expected expenses throughout the year, unemployment rate in the country / city, crime figures in the city, what the house looks like. Great confidence when it comes to investing there. I wish there was half of that in Israel.
There are Israeli investors who invest through real estate companies or through real estate market companies that invest in all kinds of European countries such as Greece, Cyprus, Eastern European countries. I suggest avoiding investments in a country whose language the investor does not speak. After all, this is an investment for many years, and in the future there may be a situation in which the company stops functioning, God forbid, or a change of ownership, what will the investors do who cannot say a word in the local language? Not to mention the lack of transparency of what the real purchase price is and what the monthly commission is for the marketer, and there have always been things and they are published in the newspaper. Just need to learn how to act right, gather some courage, and move on.
When investing abroad, it is highly desirable to separate business accounting from family living accounting in Israel. Every business owner has a business bank account, and completely separately a private bank account. Here too and especially when financing the property purchased from a mortgage, then we will try to mortgage the house in the US using an American mortgage, and the US bank account will be used by us to pay the mortgage repayments and current expenses, and to receive the rent money. Nowadays, it is a bit difficult to open an American bank account from Israel without traveling and visiting the bank branch, but there are solutions to this as well.
Tomorrow I will see pictures of one of my houses, price and yield, so goodbye.
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