While we all know that the days of high yield returns in Central Tel Aviv for the average investor have passed, there are still some viable options to make in excess of 3.5% in areas farther afield in Jaffa and Herzliya. An investor can expect an average return of 2.5 – 3% in Tel Aviv. Unfortunately, sellers have already calculated the maximum the property could ever possibly be worth and take this out on the buyers. Fortunately, there are other options out there.
Just south of Old Jaffa lies the up and coming neighborhood of Ajami, a mixed Jewish-Arab neighborhood that you might have heard of from the movie that was nominated for an American Academy Award. It’s an eclectic spot, filled with everything from luxury buildings with full sea views, to dilapidated buildings that one cannot imagine how another could possibly live in. That being said, the scene is dynamic, with many cafes, shops, and restaurants throughout, easy beach access, and transportation to the rest of the city. Apartments command a relatively high rent, with residents coming from an array of backgrounds, from students and artists, to hip young professionals. With the revitalization of the Jaffa Port to be done in the near future, the area can expect an even greater boost in the years to come. With prices in the range of 20 – 24 thousand shekels per square meter, 3.5 – 4.5 % returns are viable.
Just 15 minutes north of Central Tel Aviv, Israel’s Who’s Who come to play in the Herzliya Marina. At first glance it wouldn’t seem to be the best place to find attractive returns on investment, with Herzliya having some of the highest prices in the whole country. Indeed, the country’s most expensive street, with homes averaging around 30 Million NIS, doesn’t lie too far from the Marina. However, with the construction of new hotels that offer vacation residences, some interesting and savvy investment opportunities have arisen.
A vacation residence, according to the law, is allowed to be occupied by the owner for a maximum of 6 months a year, while throughout the rest of the year the apartment must be put up for rent through either a real estate agency or, if located in a hotel, by their management. With Herzliya being a top tourist destination, these apartments can bring in serious cash for their owners, with some units going for up to 35,000 USD per month! There is an added value of course, with the ability of being able to use the property personally, making a deal like this ideal for anyone looking for a vacation home that makes some serious money as well, with the possibility of up to 7%.
To summarize, solid investments are possible in the Tel Aviv area, with a number of options available.
Of course, before making any kind of real estate transaction here in Israel, make sure to hire an attorney, speak with brokers, and do your homework before making any major decisions. A team of professionals is key to making the choice between a seemingly good deal and a great one! If you’re interested in more information regarding investment properties here in the Tel Aviv area, don’t hesitate to contact us today!