I am sitting in the office looking out the window at the rain, going over in my head the last trip with a client to Athens. He insisted on traveling to meet the owner of a building, whom he had been negotiating with over the previous two months to buy it, even though it was clear to both of us that we could not make much progress because of the price gap between them. From the other end of the phone, interrupting my train of thought, someone who identified himself as Ofir explained that he had come to me after devoutly reading my stories every Saturday in one of the Facebook forums. Ofir asked to come with his wife to a consultation meeting, and explained that he is of Romanian origin and wants to buy an apartment in Romania but his wife is worried. We set a date for the meeting, and I went back to sinking into my thoughts.
When Ofir and Shir arrived at the meeting, I met a couple in their late thirties, academics, who had saved a little money.
“I've been looking for an investment channel for a while, and because my parents immigrated from Romania in the 1970s I started looking for opportunities there. I found an apartment that costs 45,000 euros, we have 35,000 and I'll cover the balance with a loan,” he opened, while I saw Shir shrinking in her chair.
“What bothers you? Why are you opposed?” I asked Shir.
“I'm not opposed in principle to buying a property in Israel or abroad, but if we don't have enough money to buy, I prefer not to take loans to finance this fantasy,” she replied.
“Before we get into an argument,” I interrupted Ofir, who was about to reply to her, “I want to understand why you decided to buy this specific apartment,” I asked.
“What do you mean? I have a certain amount of money and I'm not going to go buy an apartment for 80 or 120 thousand euros now with the 35 thousand we have,” he replied.
“Excellent. I have a client who bought a hotel at a ski resort in Montenegro and sells apartments there for about 30 thousand euros. Why don't you buy there and not have to take a loan?” I asked, deliberately, to try to challenge the couple, and especially Ofir, since my suggestion removes the element of Shir's opposition, so they could buy the apartment without an additional loan.
“You see, I have a connection to Romania. My parents came from Moldavia in Romania in the 1970s,” Ofir replied. “I want a property in Romania. I'm less interested in Montenegro, Bulgaria or Hungary.”
“So in any case we will buy a property only in Romania, even if we discover it's less suitable for us,” I challenged.
“I don't understand what you're getting at,” Ofir burst out.
“There are so many things to consider,” I replied, “before the question of price. Price isn't everything. I would suggest that you think about why you want to buy the apartment. What need it answers for you, and after that we can check whether the specific apartment in the specific location answers your needs.”
“I don't understand,” Ofir tried to insist. “There's an apartment at a price that suits me, in the country where I want to buy, why not buy it?”
“Because price isn't everything,” I repeated the answer, deliberately ignoring the question of the country, and for the first time I saw a smile at the corner of Shir's mouth.
“What are the costs involved in buying the apartment? Did you take into account the lawyer's fees, notary, taxes? What about furnishing the apartment? And I haven't even gotten to the questions about the apartment's location and how much it can be rented for,” I continued.
Ofir sat across from me like a scolded schoolboy, and I felt I really could not let him go home like that, so I added: “I'm sure the apartment you found is one you can buy and get both enjoyment and a return from, but I believe that both of you need to be at peace with the move, and if Shir has any concern, it's worth stopping for a moment and checking. I have a document here that I give to clients so they can define for themselves their goals in buying the property and their needs, and that way the property can be better matched to them. I suggest you sit at home and fill out the questionnaire, and if you wish we'll hold another meeting and see how to proceed.”
Ofir and Shir did not come back for another meeting. I'm also not convinced that they bought the apartment in Romania. A few weeks later I had a conversation with Ofir, who called to ask about an apartment offered to him by an Israeli marketer, and once again the conversation dealt with the issue of price and their ability to afford it. I tried to understand whether he knows, or had learned, a bit about the place or the project in which he was offered to buy, but he avoided answering on that.
Price is not everything in a real estate deal. There are so many parameters worth taking into account when buying an apartment as an investment (in Israel too, and especially abroad). Start by defining your goals: Why do you want to buy an apartment abroad? Is it for living, investment, a flip, passive income or vacation? What is your budget? How long do you plan to hold the property? What level of risk are you willing to take? A clear definition of the goals will help you find the most suitable property.
In the next stage, research the real estate market in the country, in the city and in the specific neighborhood that interests you. Understand price levels, taxation, ownership laws and potential yields. Include a physical visit to the property, walk around the neighborhood, understand who lives there, check with local brokers the purchase and renovation costs (if needed).
Don't rush. Buying an apartment, in Israel or abroad, is a significant decision. Don't let social pressure (“everyone is buying abroad”) or aggressive marketing influence you. Take the time to research, understand and weigh all the options.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית