Ask Shelly, the real estate expert

Vol XXVI: I have lived in Israel for 7 years now. Should I pay my rent in dollars or shekels? What is the benefit of either?

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May 1, 2007 11:48
Ask Shelly, the real estate expert

shelly88. (photo credit: )

For Housing resources click here. A native new Yorker, Shelly Levine is owner and manager of Tivuch Shelly Ltd., a leading real estate company that services all of Jerusalem and its surrounding areas and specializes in English-speaking clients. Click here to send us your questions for Shelly, please include your name, city and country. * * * Volumes I-XV Volumes XVI-XIX Volumes XX-XXIV * * * Vol XXVII Q: If I want to rent out a house in Modi'in, what percentage is normal for an estate agent to find a tenant. If I want management of the property what % is normal in addition. If I want management without the agent finding a tenant what is the normal % charge thank you A: The rule of thumb is you pay the agent one month's rental fee for finding the tenant. A management fee depends on the type of services given (IE from minimal to more involved) and they are calculated on a yearly fee basis. Q: hey shelly! Is there a link on the internet where I can see how Israeli real estate is doing. I would like to able to se if the prices are going up or down each year. A: You can start with www.tivuchshelly.com. The real estate market is very much a locally-based dynamic, so I recommend you do it on a city-by-city basis. The Nefesh B'Nefesh site has a solid community directory that will refer you, in turn, to many community websites throughout Israel for such a purpose Q: We hope to buy a home in Israel within the next few years. We love Jerusalem but, as we are from Kansas, we prefer to live in a less urban environment. A development known as "Har Eden" by Jake Liebowitz has caught our attention. What do you think? A: There are many suburban-like communities that would even make Dorothy feel like she's come back home. Research is the key to finding the best options. Here's what you need to look for, although I cannot comment on any specific project. 1) Proven experience and a reliable building company 2) Positive word of mouth from existing residents 3) History of the project (does it have all permits and rights to build, time-frame, has it had problems along the way?) 4) Most important, make sure that all laws applying to the building are being honored and the proper bank guarantees are included. Your lawyer must handle this point. Q: I was wondering if there is any place in Jerusalem that offers courses on how to purchase a home in Israel. I would like a course that is specifically targeted to the first time buyer/ oleh, so that I know how to get the most out of my rights. A: I don't know of any formal course per se, but a competent real estate agent will answer your questions and provide competent guidance, as will a lawyer who is especially experienced in real estate practice. Also, the Nefesh B'Nefesh site has excellent information and tips on the subject. Best regards, Shelly * * * Vol XXVI Q: I have lived in Israel for 7 years now. Should I pay my rent in dollars or shekels? What is the benefit of either? A: It depends on two things: your personal financial situation and the general economic situation in the country. Re: the first point, what is the source of your work income? Is it in dollars, shekels or another currency? Re: the latter, the past year or two have seen very volatile changes in the dollar-NIS exchange rate. FYI, not every renter is even prepared to consider both options; some may insist on one or the other. Q: I am about to inherit a furnished apartment in the center of Hertzliya. How do I go about renting it and what should be the rent? A: Congratulations on the added asset. Herzliya is the type of place where you can opt for either a long-term rental basis or if in hertzliya pituah toward the water, you can rent it out for holidays and summers. The latter (spurts) brings you much higher income, but it is also more involved to manage. The stable full-year rental depends on the specific area of the city since even within herzliya, this can vary significantly. I would check with a credible local agent to fine-tune the right number. Good luck and enjoy. Q: In purchasing a second hand apartment in Israel, by law, what is the seller committed to leaving in the apartment, i.e.: built in closets, waste disposable machines attached to the sink, etc. A: It does depend on the specific deal since two parties can agree on just about anything. It is very acceptable, generally, for the seller to leave all kitchen cabinets in place, but not all appliances. If one takes out the garbage disposal, then clearly he must install a pipe so that he house has working plumbing at the very least. Work with your real estate agent to nail down all specific particulars in the deal. If you are negotiating for yourself, tell the seller precisely what you want and he might be willing to either sell you some of the items you want to include or include them as part of goodwill in the deal. Good luck. Shelly * * * Vol XXV Q: Hello Shelly, I'm getting married B"H in July and we're planning to spend September and October on Jerusalem. We would like to rent an apartment in Ramat Eshkol. Could you give me some advice on were or how to start looking. Thank you veeery much! A: Ramat Eshkol has in recent years become a very American-yeshiva-ish area. Rentals there are hard to come by; I know because I have tried looking there. My suggestion is for you to have friends put up signs in the yeshivot and the commercial center there and hope for the best. Maybe someone there is returning to the States or somewhere for the Holiday period. Shelly Q: Why do you think that this past year has seen the most foreign residents ever to purchase second homes in Israel? Do you think this phenomenon will continue to rise? What factors explain it? A: With the serious impact of Nefesh B'Nefesh and similar movements in France and the UK, there is definitely an influx. Parents want to be close to their children and grandchildren. Anti-Semitism is rising in France and elsewhere. The Pound Sterling in the UK is especially favorable and encourages buying a home, plus the anti-Semitism and hostile media there, as well. All these factors are spurring an influx, for sure. It's also become a status symbol for religious Jews around the world who can afford to do so (more and more are able to) to own a "piece of the rock," Israel. Also, the economy in Israel is really strong and there is significant value appreciation in MANY purchases of real estate. But everywhere where overseas buyers concentrate has a somewhat negative impact as local Israelis (especially in Jerusalem, Netanya and Ashdod) are priced out of various areas. These areas sometimes become "ghost towns" with lots of people on Sukkot and Pesach, but remain empty much of the remainder of the year. In any event, these are some of the main reasons to answer your very incisive question. Q: Dear Shelly, There is a new project being built by Shikun Ovdim that we are interested in. They need a deposit and the balance can be paid upon completion in two years' time. This scheme suits us as we don't want to take a mortgage. We are concerned how this arrangement will escalate the final price due to Builders Index. Can I secure the final price upon signing the contract? A: This year the building index went up approximately 6%, in NIS. There are a few options which your lawyer can describe to you more fully. Once your payments exceed 15% of the total price, you immediately receive a bank guarantee on all your capital. This year, not only did outside buyers have to deal with the index rises, but the dramatic drop in the dollar also had a big impact on prices for people dealing in dollars. The day you sign the contract, the dollar price flips into a shekel price and stays linked to the building index. If your primary currency is dollars, you will therefore (at least during this period) pay MORE dollars to cover your shekel payments as they come due. Banks also have a system that is called 'grace,' whereby they will pay the builder for a year, and you can start paying back your mortgage when the house has been completed. The bank then takes the year of interest that has passed and spreads it out over the total payment period of the mortgage. Anytime in Israel's history, I might have felt comfortable waiting till the end for final payments, but with the dollar fluctuations, I would put a rider into the contract saying you are allowed to pay earlier than scheduled as you follow the currency changes, if warranted by the situation. Good luck. Feel free if you need any additional advice. Shelly * * * Cafe Oleh experts have been chosen for their knowledge and reputation. Cafe Oleh does not take responsibility for any advice they offer. Click here to send us your questions for Shelly, please include your name, city and country.


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