Renting Property in Israel: Comprehensive Guide

Renting property in Israel can be an exciting experience, whether you are a local resident or an international newcomer. With its diverse neighborhoods, vibrant cities, and rich cultural heritage, Israel offers a wide range of rental options to suit various preferences and budgets.

However, navigating the rental market and understanding the necessary steps can sometimes feel overwhelming. In this article, we will provide you with a comprehensive guide to renting property in Israel, covering everything from preparing for your search to signing a lease agreement. This article aims to equip you with the knowledge and insights needed to make informed decisions and secure your ideal rental home in the dynamic Israeli real estate market.

Let's start with some major differences.

A. Furniture

In Israel, most rental properties are typically unfurnished, unlike many other countries. Limiting your search to furnished options may significantly reduce the available choices. However, furnished apartments can still be found, albeit at a higher cost.

B. Guarantees

Landlords often require substantial guarantees to secure the contract and the apartment, especially for tenants who are new Olim (immigrants to Israel) without local income. Common types of guarantees include:

  • Cash deposit: Typically 2-3 months' rent, held directly by the landlord.
  • Bank guarantee: The bank issues a guarantee by either freezing the specified amount in your account or charging a higher fee without any deposit.
  • Guarantor: A person who vouches for your fulfillment of the contract.

It is also essential to have a checkbook for monthly payments and advance securities. Otherwise, you may encounter difficulties in finding a property or be required to pay rent several months in advance.

C. Utilities

Tenants are usually responsible for paying all utilities. It is important to transfer all utility bills into your name as soon as you enter the property.

D. Unprotected Tenancy Agreement

Every rental agreement includes a clause stipulating that you are obligated to vacate the apartment at the end of the lease term, without any inherent right to continue residing in the unit or pass the tenancy on to family members.

E. Fair Rent Act

All residential long-term rentals are subject to the Fair Rent Act, regardless of any contradictory clauses in the contract. For instance, the lessor is responsible for repairing reasonable wear and tear, even if the contract assigns that responsibility to the tenant.

F. Luxury Properties

Luxury apartments, with monthly rents of 20,000 NIS or more, are not subject to the Fair Rent Act. Therefore, it is crucial to pay close attention to the contract terms when renting such properties.

Now, let's delve deeper into the step-by-step process of renting a property in Israel.

1. Location

When choosing the perfect location to live, consider the following factors:

  • Weather and environment: Determine if you prefer mountains or proximity to the beach.
  • Public transportation and traffic: Decide whether immediate access to buses and trains or the convenience of driving your own car is more important.
  • Occupation: Take into account the location of your job and the commute time you are willing to tolerate.
  • Schools and community: Consider the social environment in which you want your child(ren) to grow up, such as living in a neighborhood with other English speakers, a religious community, or a secular one.
  • Relatives and friends: If applicable, living near relatives or close friends can provide occasional support during your early months in Israel.
  • Future plans: Renting in the area where you plan to buy property allows you to become familiar with the location before making a long-term commitment.

2. Budget

Establish a budget that aligns with your financial capabilities and suits the area you are interested in. Take into account ongoing payments such as Arnona (land tax), Va'ad habayit (tenants committee fees), and utilities (gas, electricity, water).

3. Search

While many apartments can be found online, it is important to note that a significant portion of English listings, even on Israeli websites, may be outdated or unavailable. A reliable agent can help you find real and available options, saving you time and reducing frustration. Consider enlisting the services of a reputable agent who can negotiate on your behalf.

4. Contract

Most rental contracts are in Hebrew, but you can request a second version in your native language or opt for professional translation services. It is crucial to review the contract carefully with your agent or a knowledgeable real estate lawyer to ensure compliance with rental laws. Luxury properties may have additional clauses outside the scope of the Fair Rent Act.

5. Option to Extend

Some contracts include an option to extend the rental period for an additional year before the initial term expires. If you are granted this option, ensure that it is one-sided and binding on the landlord without limitations. Also, confirm that the rent amount for the next year is specified.

6. Payment and Guarantees

Rent is typically paid monthly in advance. Most landlords require 12 postdated checks for the rental period, which serve as either a deposit or a guarantee. Additional checks may be required for security purposes. Serious guarantees may be necessary for new Olim or expensive rental properties. According to the law, the landlord must return all guarantees within 60 days after the end of the rental period unless specified otherwise in the contract.

7. Moving In

Schedule the move-in date with the landlord in advance to avoid any surprises. Take note of water and electricity meters and ensure that the apartment matches the agreed-upon terms, including furniture, appliances, cleanliness, and paint condition. Transfer all bills into your name promptly, usually within seven days, as stated in the contract.

8. Repairs

Effective communication with your landlord or a reliable intermediary is essential in addressing any issues or repairs that may arise during your tenancy. While the lessor is responsible for reasonable wear and tear, ongoing maintenance and specific repairs are typically the tenant's responsibility.

9. Consider Buying

If feasible, consider purchasing a property. Even with non-local income, it is possible to obtain a mortgage. Property prices in Israel tend to increase continuously, so delaying a purchase may result in significant additional expenses in the long run. For assistance, contact Sabras.

10. Moving Out

Ensure all bills are settled before moving out, leaving no debts behind. Return the property in the same condition as received, including any necessary cleaning or painting. Schedule a final property tour with the landlord to address any concerns and ensure a smooth departure.

11. Bonus

Learning some Hebrew in advance can be beneficial, both for better understanding your surroundings and for creating a positive connection with the locals. Resources such as language-learning apps, private tutors, or audio courses can help you acquire basic language skills before your arrival.

Good luck! If you require assistance, Sabras is ready to help make your dreams of finding a home in Israel a reality.

How to buy property in Israel?

For a comprehensive guide on purchasing property in Israel, please click here.

1) Preparing:
   a. Determine your budget.
   b. Consider obtaining a mortgage.
   c. Identify preferred areas, cities, or moshavim.
   d. Take into account factors such as weather, schools, community, and public transportation.

2) Search:
   a. Create a list of properties to visit with your agent.
   b. Calculate the final cost of the property, including all fees and taxes.
   c. Consider factors like land tax (arnona) and maintenance fees (va'ad habayit).

3) Contract:
   a. Engage a real estate lawyer to protect your interests. Consult with your realtor for recommendations.
      * It is crucial to have a lawyer specializing in real estate matters.
   b. Ensure agreement on the payment schedule and delivery dates.
      * Note that the developer may have a two-month grace period for delivery.
   c. Sign the contract and proceed with payment and/or mortgage transfer.
   d. Congratulations! You are now a property owner in Israel.

Generally, the process of purchasing property in Israel becomes less complicated with the support of experienced professionals such as brokers and lawyers. By finding a reliable real estate agent, you can navigate the entire process smoothly.

Can a foreigner rent a property in Israel?

Certainly! Non-Jewish foreigners and non-residents are eligible to rent properties in Israel. In order to meet the landlords' requirements, it is usually necessary to have a bank account, a checkbook, and sometimes a guarantor in Israel.

What are the additional payments to consider?

In addition to the monthly rent, there are several additional payments to consider:

1) One-time payments:
a. Agent fee: Typically equivalent to one month's rent plus VAT (17%).
b. Contract translation: Approximately 200-500 NIS, depending on factors such as contract size, language, urgency, etc.
c. Lawyer fee: Approximately 500-2000 NIS.

2) Ongoing payments:
a. Arnona (land tax): Approximately 400-500 NIS per month for an average 4-room apartment. The amount may vary based on the property's size and location.
b. Va'ad habayit (tenants committee): Approximately 300-350 NIS per month for an average building with an elevator. In luxurious buildings with extensive facilities, the cost can be several thousand shekels per month.
c. Utilities (gas, electricity, water): Approximately 600-700 NIS per month for a family of four. Actual costs may vary depending on usage (mainly A/C) and the number of occupants.

It's important to take these additional payments into account when budgeting for a rental property in Israel.

Is early termination of the lease contract possible?

In general, yes.

If your contract includes a clause regarding early termination, you will need to provide the landlord with a 60-day notice before leaving the property.

Alternatively, you can advertise the property and find a suitable tenant who meets the same requirements and guarantees and can assume your position in the contract (subject to the landlord's approval of the new tenant).

Can I hire a property manager for my rented apartment?

Certainly! Our property management services are available for personal use apartments as well. You can find more information about it here.

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