Sometimes it seems that the field of real estate investments is the domain of successful and wealthy businessmen, but the truth is that a not too high initial capital is enough to get into business. Investing in real estate that is done wisely, carefully, and with an understanding of the market can become a profitable investment that will open up a better financial future for you. But how do you do it properly and what should you be careful of? Pay attention:
Investment opportunities that don't require a lot of capital? There is such a thing as an animal.
It's a bit difficult to generate a return from zero, and to become a real estate investor you need to have some kind of starting capital, but you don't have to start with investments of millions, and in any case, it's better for you to give up investments that will force you to take out high-interest loans that aren't profitable. Try to move away from the center of the country and locate apartments for investment in peripheral areas where apartment prices are falling.
And if you try to look for such an apartment in areas that are on the verge of urban renewal processes, your investment can increase its value in the future by tens of percent. You can locate such opportunities in the urban development plans published on the Israel Land Authority website or follow publications online. Additional opportunities await you in commercial real estate, where you can find offices for as much as 300,000 shekels.
Focus on the goal and leave emotion out of the business.
Have you found a property that you find interesting? Remember that your goal as a real estate investor is to achieve a profitable investment. This means that when you focus on the question of cost-benefit, it is advisable to remove irrelevant considerations from this balance, such as your personal attitude towards the living environment or a desire to renovate the apartment to make it more attractive to you.
The relevant questions are whether the value of real estate in the desired area is on an upward trend or whether renovating the apartment can increase your return. You can check price trends in different cities on the Madelan website or calculate future returns with online calculators . Remember – you are not buying the apartment to live in it, you are buying it to generate profit.
Reading the building file is not a file at all.
The building in which you want to buy the apartment has a building file that contains all the relevant documents for the building, such as building permits, Form 4, completion certificate, measurement maps, and critical information such as construction exceptions or demolition orders that can hint at the future of the property.
These documents can teach you a lot about the value of your investment and its viability. The building file is located in the city's engineering department, but today most authorities that have undergone digitization processes have uploaded the files to the website, making the process simple and easy. So with one click you can access the building files of Tel Aviv , Jerusalem , Haifa and many other cities.
How much will it really cost you?
When investing in real estate, it is very important that you know that the price of the apartment you receive from the seller or broker is never the final price you will pay for it, and it is very important that you are familiar with all the additional expenses that await you. First, it is worth familiarizing yourself with all real estate taxes, such as the purchase tax, which is determined based on the cost of the apartment and the number of apartments in your possession. You can calculate this tax in the Tax Authority's simulator .
When you sell the apartment, you will also be required to pay a capital gains tax and a property improvement levy. If you purchase an old apartment that requires renovation, you will be forced to part with considerable sums. If it is an apartment on paper, keep in mind that the price of the apartment offered to you does not include VAT. In this case, the price of the apartment is also linked to the construction input index, which may further increase the amount you will pay, and you will also be required to pay fees to the contractor's lawyer. After you have checked how much it is really going to cost you, you will be able to better understand whether this is indeed going to be a worthwhile investment.
Mortgage
Finally, if you are already trying to figure out how much it will really cost you, and if you, like many investors who are just starting out, do not have the full amount on the property, you should carefully consider which mortgage path is the most profitable. There is no doubt that this is a somewhat complex topic, but it is worth trying to delve into it, as each path can have far-reaching effects on your financial future in the years to come.
Each bank will offer different tracks characterized by different types of interest rates, such as prime interest or variable interest, with different linkages, such as linkage to the price index, the dollar or the euro, and different mortgage repayment plans. You can examine the impact of the tracks and options in online mortgage calculators and try to understand what awaits you.
