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The pros of buying and renting

Posted by Judith Ben Avi on May 1, 2016
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Real estate is one of the most popular types of investment these days. In the uncertainty of our current economic situation, it seems that owning land or an apartment in a high-demand location is the most secure way to return the investment and ensure a profit. Is that so in Jerusalem?

Facts about Jerusalem real estate market to consider

Jerusalem is one of the largest real estate markets in Israel, as well as one of the most expensive ones. But by calculating carefully, you can make wise decisions and maximize the potential this city has to offer.

Pros of buying and renting apartments in Jerusalem

  • Jerusalem rentals can be marketed to different groups: students at the Hebrew University, tourists, young families and so on. Each has its own advantages.
  • The prices of Jerusalem real estate rarely drop severely, so chances are that the value of your purchase will eventually rise over time.
  • The creation of new high-profile projects (such as Holy Land and others) have led to a decrease in prices in the older neighborhoods, allowing you to make profitable investments.
  • Various real estate services can help you manage the units without you necessarily being present.
  • The improvements in local public transportation (the light rail line) enable easy access to many parts of the city, and connect points of interest with the outskirts of town.

Possible cons

  • Jerusalem is the first to suffer when tension escalates between Israel and the Palestinian Authority, so it’s best to find areas that are close to central points of town.
  • Relying on tourists as the main candidates for rentals might be problematic for the same reasons.

How to pick the right neighborhood for investment?

Jerusalem real estate can be defined as standard and luxurious. If you decide to go for the standard offers, you could choose from distant locations, such as Pisgat Ze’ev, where the prices are declining, allowing a profitable investment. It is safe to say that almost every neighborhood in Jerusalem is suitable for purchasing real estate; the question is whether the balance between income and your investment is working in your favor. Luxurious apartments are priced much higher and are riskier, because each month they go unrented causes the owners to lose money, so the safest way to go is to buy in the outlying neighborhoods where the prices are neither rising nor declining. The bottom line is that it’s all about demand. Locations that are close to the main points of interest in Jerusalem or to central transportation are in high demand and may produce higher profits.

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