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Housing in Israel

Rental Market

There's a wide variety of housing options face by the prospective tenant in Israel. Locations, sizes and characteristics of homes are as diverse as the country itself. The most important factors to take into consideration (city/ neighbourhood preference, size of apartment and available budget) are common to renting in most countries.

Someone looking to rent should begin with the city or town they wish to live in. If you have some idea of your desired neighbourhood or schools/ synagogues, that will also help narrow the focus of your search, and save time & energy for you and your agent. Most of Israel`s residential communities have a distinct character; therefore, it is critical to research the desired neighbourhood in advance. Many times, it can be a small fact or observation that will be the determining factor in a client`s decision on where to relocate, and that small fact or observation may not be easily ascertainable without the input of someone who is locally based.

Deciding on a Property

After deciding on a neighbourhood, you should zero in on the appropriate size property (number of bedrooms) that matches your budget and taste. Your agent`s knowledge of his service area is critical in choosing only those properties that are compatible to the search. Depending on your requirements, the number of compatible choices may vary.

After a suitable property is found, negotiations begin over the terms of the rental. Just about everything imaginable is subject to negotiation. Rentals in Israel are cheap relative to the value of the property.

There are two reasons for this:

(1) property owners receive a tax break on income from residential rentals, and

(2) tenants generally pay all utilities, taxes & building maintenance. Once all the details are worked out, a lease contract is signed by both parties, and the tenant takes possession of the property for the specified period of time.

Monthly Rental, Utilities & Other Expenses

Items such as utilities, arnona (municipal taxes) and va`ad bayit (building maintenance) are usually the obligation of the tenant in addition to his/ her monthly rent. On short-term rentals, it is more common for the rental to include these expenses (except telephone), but short-term rental prices are also higher than long-term, so in the end, the overall monthly cost to the tenant is very similar. As mentioned earlier, these practices vary from one property to another, and from one owner to another, and all options should be explored in the negotiations prior to signing a lease. A competant agent will provide you with enough information to know what these costs are, and whether or not there is any flexibility on the part of the owner.

Lawyers`s Services

It is common for one lawyer to serve both sides to a rental transaction in the absence of any major areas of conflict between the parties. It is also common for both parties to sign a lease without the services of an attorney. There are standard rental contracts available, which can be modified to suit the unique requirements of the specific transaction. Owners commonly ask the tenant to pay 1/2 the cost of his lawyer to draft the rental agreement. It's recommended not to agree to this demand, since the owner`s lawyer does not represent the tenant, and if something occurs requiring legal services, the tenant is left unprotected. If there is any question or doubt, the tenant should seek independent representation by a competant lawyer. The cost of such services should not exceed 1/2 month`s rent, but could vary depending on the complexity of the rental, and the issues involved.

Financial Guarantees/ Security

This will also vary from owner to owner. There isn`t a single standard, and this subject is very much open to give & take in the negotiations.

There are several options regarding security:

(1) a check put into the possession of the owner/agent/attorney with the date left open, and in an amount to be agreed upon by both parties (typically anywhere from 1-3 months rent);

(2) a bank guarantee, wherein an agreed upon sum is placed into a closed account in both parties' names for the duration of the rental (interest can be earned on this closed account, and will accrue to the benefit of the tenant); and

(3) the personal guarantee of someone willing to vouch for the creditworthiness of the tenant (any guarantor must be a local resident-from a practical point of view, trying to chase down someone abroad to make good on a guarantee is impractical).

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