In recent years, as real estate prices in Tel Aviv and throughout Israel reach peaks that make it difficult for many buyers, investors are looking for alternatives and turning to overseas investments. The search for an income-producing property usually focuses on major global capitals, out of a perception that these cities "will always be in fashion" and will maintain stability. However, the important question arises: Is this a good and safe investment, or a trap to be wary of.
To ensure that your investment is safe and protected, exactly at the security level of purchasing an apartment registered in the Tabu (Land Registry) in Israel, you must act in a correct and structured manner.
Step One: Characterizing and choosing the investment channel. The first step requires characterizing and accurately choosing the target city, the specific property, the identity of the seller, and most importantly - choosing the best and most suitable investment channel for you. There are several optional investment channels:
- Direct purchase of a property: Buying a specific apartment that will be registered directly in your name. The advantage of this channel is full control over the property - you can dictate what to do with it, bequeath it, sell it or rent it out yourself.
- Purchasing shares in a partnership (financial instrument): In this channel, the partnership raises funds from investors, invests them in purchasing properties abroad, improves them and finally sells them. The investor actually purchases a financial instrument and enjoys their share of the current rental income, as well as the appreciation in value upon the sale of the property, if any.
- Purchasing shares in a venture: Entering an investment in an entrepreneurial company, in many cases through an organized prospectus mechanism.
Step Two: Examining the legal framework of the entrepreneur. If you have chosen not to purchase a property independently but to invest through an entrepreneur, it is very important to verify the seriousness of the legal infrastructure they have set up for the project. It is necessary to verify that the entrepreneur is accompanied by a leading and experienced Israeli law firm, which oversees the transaction from its inception and has extensive experience in managing transactions of this type. The Israeli law firm, which will manage the entire process, will also be joined by a local lawyer in the destination country, a professional taxation system, both under the law in Israel and in the destination country, a serious trust mechanism in Israel for the safe management of investor funds, to the extent required by the terms of the agreement, and strict drafting of the agreement system.
Step Three: Do not give up on personal legal representation - read the "small print". Here lies a major vulnerability for many investors. In cases of purchasing through an entrepreneur or joining a partnership, it is highly important to hire the services of a lawyer privately and it is definitely not recommended to rely solely on the entrepreneur's lawyer, since their role is to represent the interests of the entrepreneur, and not those of the buyer. It is important to choose an Israeli lawyer experienced in transactions of this type, who comes from a reputable firm and also, no less importantly, has professional insurance in sufficient scopes. A lawyer on your behalf will examine the "small print" in the agreements, represent the buyer and their interest all along the way, and will be there to assist and resolve disputes or problems even after the completion of the transaction.