One investment opportunity that Israelis love is real estate. In reality, they have very limited knowledge on the subject, though this is improving all the time. Not everyone is a real estate expert, and we can’t always know if the information we have is correct or not. Real estate is a profession!
As in every profession, there are some untrustworthy characters who have no real intention of investing the money they receive, but most real estate professionals are not like this at all. We have put together some useful ideas that almost every investor will find practical and useful:
- Get a detailed report of the cost of the investment. Before you make the investment, what are the costs and expenses necessary to complete the deal that you are entering into? Many investors do not check these details, and this can be reckless on their part.
- Search for a variety of recent sales that have been completed in the area of the property investment before you purchase it. This is very important as it will give you a strong indication whether the price that you are paying for the property is close to the market price.
- Only transfer money for disbursement via a trust account. Many investors endanger themselves by transferring their money directly to the fund manager or the investment group’s manager and are unaware that the way to ensure the greatest security for their money is to transfer it via their attorney’s trust account. The investor’s attorney
holds the outstanding money in their trust account until the property is actually acquired. The attorney will transfer the money only when there are no outstanding impediments to the purchase and the property is free of liens, debts and foreclosures.
- Ensure that the property is registered properly. When purchasing any apartment, house or building in Israel, the buyer or fund partner should request to see the property’s records (Tabu) in advance to ensure that the registration has been properly recorded and indexed after completion, with the name or the legal entity of the buyer listed. Likewise, when purchasing a property in the USA, there are property records (deeds) which should be requested and provided to the buyer. If you are investing in a property as a partner in a company or a real estate-owning fund, be sure that you are a member of the group registered and recorded in the public records property register, and that the registered property is owned by the company. These two actions will ensure that you have a high level of protection as the title is registered as your property.
- Request to see the lease agreement signed on your behalf by the management company that made the investment and purchased the property.
6. Request to receive reports from the management company. All expenses and income from the property should be detailed in the report, including the monthly/quarterly/annual income, as well as the fixed and variable costs and expenses of the property.
