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Monday, December 11, 2017
Article written by Ted Gross

Purchasing Real Estate In Israel - Costing & Value, Gardens, Roofs & Caveats (Part Two)

Costing & Value:

So now you know how much the apartment you want to purchase is going to demand that you give $350,000 to the current owner. And now, hopefully, if you followed advice, you will have in your hands a current copy of the “Arnona” (city tax) or “Tabu”. As mentioned before, these two documents may not totally agree on the exact number of meters in the house. They may be off by even 10 meters. (If it is anymore you will require an in-depth explanation and proof of why this is so, to make sure that nothing has been added on to the apartment without legal registration.)

A few more things which must be taken into account:

Gardens and Roofs

All these obliviously add value to your property and price as well. However, you must make sure that any garden you are being shown or roof belongs to the person that is selling it! (Again here Tabu is critical.)

If someone shows you a garden ask “Is it registered in your name?” Don't be shy, even if the agent seems strangely silent on this. The same with a storage room, and with a roof. You may purchase a property thinking that you also purchased a garden, only to find out that the garden is a “common area” and belongs to all the tenants of the building.

Porches, open and enclosed & additions

Remember that any additions and enclosed porches MUST be registered with the city and have permission to do so. If you view property where an addition of rooms has been made without permission, it is illegal. No and's, if or but's about it. If it is illegal it can easily be closed up or torn down by the city. Or you will have to pay an inordinate fine even if you did not build it, since once you purchase you are the legal owner of the apartment. Those rooms will not be reflected in the Arnona or in the Tabu. And if the city demands they be destroyed or you pay a steep fine, it will be your responsibility to do so.

Okay, so now you are aware of the size of the property. You know how big it is and you take a deep a breath and make your offer. You assume you are going to pay $350,000 for 96 meters. Fair? Worth it? You think so, and besides you want this property.

Hold on!

You are still not done! Take out your trusty calculator and divide the cost of the house by the total number of meters. Your agent should have already done this for you, but don't count on it. You will now discover you are paying $3,646 dollars per meter. That is your true cost. Now it is imperative to know if the market in that neighborhood, for an apartment such as you are buying can bear that price. Does the apartment need to be gutted or just have a few “touchups”? Will you be required to invest $5,000 or $50,000 to make it livable or a palace? Can it be moved into tomorrow (after just a new coat of fresh paint?) All these questions are crucial to your bottom line.

Any purchase must, by definition, contain the thought, though perhaps far into the future, as to resale value. Remember the cost per meter is of the apartment as it is when you purchase it. If you buy an apartment for $350,000 and end up gutting it and redoing it for a cost of $46,000 then the apartment cost you $396,000 or $4,125 per meter. That is a big difference between meter cost in what you thought you bought and what you will have in your hands when you are through. Can you resell that property for $4,125 per meter or better? Will you loose money? Of course, you may not really care. You want this specific property and that is that. Still it is important for you to make the calculations.

You may have purchased an apartment five years ago for $250,000. Then you went ahead and totally gutted and redid the apartment, including electricity and plumbing for another $50,000. You spent a total of $300,000 on the apartment and now you wish to sell it for $370,000. This is a fair assumption. However, the price of an apartment is not only determined what you paid for it and put into it. It is also determined by neighborhood, street and even specific building. Keep in mind that your redesign of an apartment and what you spent on it is not necessarily going to reflect in its worth on the market when you decide to sell it.

In the end result it is up to you to decide if the overall cost and cost per meter is worth the money. No one can make that decision for you. All we can do is give you our professional opinion based upon current market value and projected resale value.

Some Specific Caveats


  • In Israel rooms are counted as the number of bedrooms and then the Living Room, Salon etc. Most apartments unless they are large and built in according to specific plans do not have a Living Room and separate Dining Room. So if an apartment has 2 Bedrooms and a Salon it is a 3 room apartment. (Of course if it has a separate room for a Living Room and Dining Room it would be a 4 room apartment.) The kitchen etc. are not included in the number of rooms.


  • Houses are measured in meters. Convert all of this into square feet. If you are interested in your own conversion utility for meters to feet many easy ones are available on the internet.


  • Some bathrooms only contain a toilet, with no bath or shower or sink. We list these separately as well.
Be careful. Be prepared. Be informed.
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