There are so many projects going up all over Israel it is unbelievable. Driving through some of the most sought after areas, you would not believe the amount of construction that is before you. Some whole areas are just a maze of construction sites. For you as a buyer, or an investor… trying to pick the right one can be completely overwhelming. And yet these sell like hotcakes. It is amazing to watch how quickly a brand new area/building/site gets sold out within months.
How are you supposed to know which one is right for you? Which are the 'better known, well-reputed developers" good and sought after areas?
In Israel, people often buy a home on paper, i.e. a house not yet built. There are many advantages and disadvantages to buying in a new project.
Pros
Apartments are cheaper in a new project, especially if it's in a new unbuilt area – such as Ramat Bet Shemesh D. Once it's building is complete, the price instantly increases and it becomes the same price as an older home.
Payment terms are usually extremely attractive. You do not pay for the bulk of the home until it's in its final stages of completion. Most often, you can purchase with a 20% down payment, the balance only being due either 2 or 3 years later. Very attractive option from a cash flow point of view.
You can design/make changes to the layout of the home, the living room, kitchen, bathrooms etc (within limitations, of course), the way you've always dreamed your house to be.
The price of the house almost always goes up during each stage of building. You can almost always sell your house at different stages of the building and make a nice profit. For an investor, this is currently one of the most sought after options, as it allows them to hedge their bets. It gives comfort knowing if your circumstances change over time, you can always just flip it and still make a profit.
There's something really special about building a home and having a say in the finishes that are selected.
A good agent knows the developers well, understands how they work, and can often even get some sweeteners and discounts to boot.
Cons
Your home won't be ready for some time. Investors won't be able to charge rent for some time. If you want to buy to live, the wait may not work for you.
Developers are much better than they used to be. Yet, some are notoriously late and the quality can be substandard. You need to check out the developer's history
Designing your own home can be a pain in the neck. You've got so many different types of cupboard handles to choose from, do you really need to think about where to stick the plug sockets? Who knew there could be so many different types of toilet bowls and sinks!
Designing can also be expensive, choosing an upgraded kitchen, fancier bathrooms, extra electric sockets, moving a wall etc
If you don't have an agent assisting you, how will you know where to get the best air-conditioning unit, parking, kitchen upgrades and so forth? This is yet another maze that needs to be navigated.
The final price of the house adjusts, normally quite marginally, with the builder's price index.
Often you have to add items such as air-conditioning, and you hadn't factored that into the cost.
On the other hand, a second home may also need a whole long list of renovations.
There are so many issues to consider when buying a new home, and especially a Project. Contact us at Israel Properties and we'll talk them through with you to help you make the best decision for you.