Foreign owners of Israeli properties are being ripped off by unscrupulous real estate agents and negligent managers. Don’t be a fryer! !
Shaun Isaacson, CEO of Creative Estates Israel, has noticed that some overseas Israel property owners are being charged higher than normal agency and legal fees by unscrupulous agents. Because they are far removed from the Israeli market, they do not realize that these charges are extortionate.
In Israel, the standard agent’s fee for a property purchase is 2% of the sale value, or less, but certainly not the 5% commission that foreign buyers are sometimes charged. Overseas owners should also check carefully that the agent who wants to help them buy property in Israel is actually a licensed realtor and not relying on a friend’s property license.
Having invested in a property in Israel, it is important to protect your investment by hiring an experienced property manager. If your property is poorly maintained, or if the mortgage is not paid because the tenant defaults on their rent payments, owners can find themselves in a real mess. Property managers should report regularly to the owner about all income and expenditure associated with the property, as well as reporting to the Israeli tax office if their rental income is above the reporting threshold.
“Many property managers are inexperienced and incompetent, or worse”, says Shaun. “I know of owners who have been prosecuted because their negligent managers did not issue receipts to tenants and did not keep proper financial records. Sometimes tenants withhold their rental payments for several months because of something that could have been easily fixed.”
Shaun is not only a licensed realtor and experienced property manager, but also a qualified Israeli lawyer. He is only too aware of the different tricks that unscrupulous real estate agents and managers play on absent landlords. Unnecessary repairs are common, and adding kick-backs when hiring friends to work on properties they manage. That is why Shaun recommends getting references from other property owners – ideally those who live in Israel and know what is happening with their apartments.
Creative Estates manages properties all over Israel worth 350 million NIS and delivers monthly reports to each client. They have a team of maintenance staff to carry out regular and emergency repairs, which keeps costs down for the owner.
Landlords should ensure that their property is insured and, in case of a leak or other accidental damage, you need to pursue your claim aggressively to make sure that the insurers pay out. “It is very difficult for someone who lives thousands of miles away to manage their own property in such a situation. The well-meaning friend who agreed to manage your property for you would find themselves out of their depth if something went really wrong.”
In Israel, the term ‘fryer’ means someone who is easily taken advantage of, and it seems that some foreign landlords are treated as ‘fryers’ by unscrupulous Israeli agents. So don’t be a ‘fryer’!