The Israeli government has announced new regulations to double municipal property taxes on empty apartments from January 1, 2014.

The Knesset Finance Committee has approved proposals initiated by Finance Minister Yair Lapid to allow local authorities to impose double property tax on properties that are vacant for 9 months of the year. This proposal was first suggested during the social protests in the summer of 2011, to help young people by increasing the number of rental properties in Israel’s cities.

The new regulations will be tested for two years (2014 and 2015). Tax officials will check which properties are empty by examining electricity bills, which has led some commentators to suggest that owners may prefer to leave the lights on in their empty apartments rather than renting them.

Shaun Isaacson, CEO of Creative Estates Investments and Management Services in Israel, says that this would be a mistake. “With average returns of 4% and up to 7% in some areas of Central Israel, it makes much more sense for overseas owners to rent out vacant apartments, rather than paying double taxes or high electricity bills.”

“We have no shortage of reliable tenants who would be happy to pay good rents, particularly in Israel’s central region where the local economy is strong. Property owners can not only make a profit for themselves through expert property management,  but can also help young Israelis who are keen to set up homes of their own – it’s a win-win situation. These new regulations mean that now is the ideal time to rent out your empty property in Israel.”

To find out how Creative Estates can manage your property in Israel and earn you excellent rental income, contact Shaun@CEIsrael.com

Israel’s property market offers solid returns on investment. As very cautious lenders, Israel’s banks protected its property market from the worldwide crash in 2008 , but prices are now rising steadily throughout the country.

People often ask where they should invest in Israeli real estate. Jerusalem is usually the most popular destination, but many cities in the centre of Israel have benefited more from steady economic growth in hi-tech, retail and industry. The natural gas dividend is further expected to fuel consumer and commercial confidence.

So, here are our four top tips for Israel property investment in 2014.

Ir Yamim in Netanya is the most sought-after neighborhood along Israel’s Gold Coast, and particularly popular with English-speaking visitors and retirees. New skyscrapers are springing up, with 4,500 new apartments at an average price of 2.3 million NIS ($600,000). As this neighborhood develops, now is a great time to buy a property in Netanya’s newest seafront community.

In Ra’anana, demand for property has been outstripping supply, but new communities are now being developed in the north of this favourite English-speaking city. The opening of Route 531 during 2014 will ease congestion at the entrance to Ra’anana and make it an even more popular place to live. Talk to Creative Estates about the various real estate projects currently available for investment.

Tel Mond is a popular suburb, located between Netanya and Ra’anana, with large new family houses being built all the time. Currently a newly built 6-room home will cost 2.7 million NIS ($770,000) and an older house of the same size costs 2.4 million NIS ($686,000). Families are moving to Tel Mond for the strong Anglo-Israeli community and great lifestyle.

Kfar Saba is our top tip for 2014, with 5-room apartments still available for 2 million NIS ($570,000). With exciting urban renewal plans, this city is 15 minutes from Tel Aviv and conveniently close to the facilities in Ra’anana, but prices are still reasonable. Don’t wait for that to change!

Talk to Creative Estates today about investing in properties in Kfar Saba, Tel Mond, Ra’anana and Netanya, and in cities throughout Israel.

I received a call last week from one of our tenants who had received a visit from a gas company technician. He came to carry out an official annual check of all the gas appliances and pipes in the apartment. He told her that the gas outlet located inside the property was in a dangerous place, behind the stove, where it would be impossible to reach and disconnect in an emergency. He told her that it would cost money to move the outlet to a safer location, but it was a legal requirement to do so.

The tenant realized that such an expense should be met by the owner of the property or the management company, and asked the gas company technician to write down an explanation of the problem and a price quote that she could send to Creative Estates, the management company that takes care of her apartment. Suddenly the technician decided that it wasn’t so important after all and left the apartment.

Quick thinking by this savvy tenant clearly saved her and the property owner and management company from getting suckered by an opportunistic workman, who was trying to make money by carrying out unnecessary work!

Sometimes a tenant is so happy in his apartment that he refuses to leave at the end of the tenancy. In one unusual case, our tenant had invested 40,000 NIS of his own money in various unauthorized improvements to the apartment, and refused to leave until he was fully reimbursed. Creative Estates took him to court and sued him for vacancy.

The Judge awarded a compromise settlement of 20,000 NIS and required the tenant to leave the property within 30 days. We asked the Judge to add a condition that the apartment must be left clean and habitable, or he would not receive the money. After 30 days the tenant left and we entered the empty apartment to find it smashed up and impossible to rent. We were not liable for the money, but Creative Estates had to renovate the apartment completely before it could be rented again. (This cost us less than the money that we would have had to pay the tenant had he left the apartment in a reasonable state!)

Generally we have very good relationships with the tenants in the properties that we manage, and we usually agree to pay 50% of the cost of reasonable modifications requested by long-term tenants, since they generally increase the value of the property, but they must speak to us before spending their money on improvements!

Tenancy disputes arise very rarely, but at Creative Estates we have the legal background and experience to be able to come up with creative legal solutions when required!

Creative Estates was asked to take over the management of an apartment that had been vacated by its elderly tenant because it was uninhabitable. The lawyer who previously managed the apartment was not aware that a pipe had burst, causing mold to spread through all the walls.

We sent in our contractors to remove and rebuild the infected walls, replace the pipes, replace the rotten kitchen, and fit new flooring. It cost 40,000 NIS to restore the property to a livable condition, in addition to the lost rent while the work was completed. Because the previous manager had not insisted on arranging insurance for the property, the owner had to pay out. Fixing the burst pipe when it happened would have cost just a few thousand shekels, or just the excess on the insurance policy.

At Creative Estates, we always insist on insuring every property that we manage. We generally arrange the insurance policies for all our properties, negotiating a competitive bulk rate and saving our clients money. We also take care of burst pipes when they happen, which saves our clients even more money.