Demand for renovated apartments in Tel Aviv and other cities in the
area has recently grown, sending apartment prices up, claims Levi
Yitzhak in a periodic market survey. The current situation enables
investors to buy an apartment, renovate, and sell it in a profit
bigger than entrepreneur's regular profit.
Levi Yitzhak, publisher of a monthly magazine on property and apartment
prices around the country, gives the following example: an investor
purchased a 2.5 room apartment located on Tel Aviv's Beztal'el Street,
for US$ 88,000. He spent US$ 21,000 on renovation - also turning
the service balcony into a bathroom - and sold the apartment for US$
300,000. Purchase tax and financing expenses taken into consideration,
the profit from the investment stands at 24%, free of tax, since it was
sold as a single apartment.
Other examples:
* An investor purchased an 18 square meter, two room apartment located
on Tel Aviv's Liberman Street, for US$ 71,000. The buyer spent some
US$ 40,000 in renovating the apartment, installing new electric and
plumbing systems. The apartment later sold for US$ 218,000. Investor
profit - about 20%.
Two 3 room apartments (85 square meters each) located in the first and
third floors of a building on Arba Ha'aratzot Street in Tel Aviv, were
recently sold for US$ 258,000 and US$ 312,000 respectively. The building
has no elevator, however most of the US$ 40,000 gap stems from the
renovation of the first floor apartment.