Done Deal: Bargain hunting in Bnei Brak

Rising real estate prices are causing angry protests across the country; see what a couple of friends can do with a low budget.

Eritrean 311 (photo credit: Ben Hartman)
Eritrean 311
(photo credit: Ben Hartman)
Avi Sasi is the CEO of Housing T.L.V Ltd.

Bnei Brak has long been area high in demand among the religious community. But with real estate prices consistently rising and the few available apartments not supplying the high demand, religious people prefer cheaper alternatives such as Elad, Beit Shemesh, Kiryat Sefer Harish or other religious communities. Jerusalem is also an option, but it is just as expensive as Bnei Brak.
Location
A penthouse of 160 sqm sold by Housing TLV in a high standard building built in 2007 with an elevator, but no parking.
The penthouse is located on Eli HaCohen Street, a quiet central area with good public transportation links and good community facilities. The area attracts a target audience of buyers looking to rent, but also religious people looking to live in the heart of Bnei Brak.
The deal
The property was sold half a year ago for NIS 1.8 million. At the time, the price seemed really high for those who couldn't see the property's potential. The buyers did realize it's potential and quickly bought the place at a slightly higher price compared with its market value. It turned out to be a real bargain.
Two friends collectively bought the penthouse and submitted a request to allow them to build two units of 80 sqm each. It was a risk, but it payed off. The municipality granted them the permit. However, they still could have sold the penthouse as a single unit at a higher price of about NIS 2.1 million.   
It took some time, but eventually each buyer ended up with a four room apartment of 80sqm at a price of NIS 1.15 million while the market value for such apartments is NIS 1.5 million and higher.
Bottom line
Increasing real estate prices forces buyers to be more and more creative. This is a good thing that should be embraced by the authorities too.
If buyers have the foresight to buy private houses and split them into separate apartments, with the municipality's approval, this will improve the real estate market and make it more competitive.
For more information go to www.realestateisraelea.com – The home of premium properties.