“That night in Tel Aviv was my last in Israel, at least for now. I had a plane ticket for this morning, 1,000 euros in cash in my bag, and the video from my 17-year-old that I had promised to watch every evening: ‘Mom, I'm proud of you. Come back to us a winner.’” - Ilana Cohen, a co-founder of “Ogen Global” for real estate investments
“It all started when I stood on the balcony of a cheap hotel in Bucharest, staring at the rain that hadn't stopped for three days,” Ilana tells me in a small café on Dizengoff Street, a day before her return to Romania. “I felt like an economic refugee. Two weeks earlier, the bank had announced it was enforcing the lien on my apartment in Bat Yam. The family business had collapsed and left me with debts of over a million shekels.”
Her espresso had already gone cold, but the fire in her eyes burned fiercely as she told me her amazing story.
The point where everything changed
“Noa, my daughter, was the one who forced me to take a time-out. ‘Mom, let's go to Romania for two weeks, just to breathe a little.’ We used my last credit line - 7,000 shekels.”
A smile began to spread across her face as she reached the turning point in the story.
“The apartment we rented on Airbnb was awful. A mattress that felt like a water bed, mold in the shower, and a kitchen that looked like it hadn't been cleaned since the days of Ceaușescu.” She laughed. “When I called to complain, the owner said he'd refund me 20% of the amount. Out of sheer anger we decided to leave.”
Ilana's luck started to change when she met Victor, a 57-year-old local taxi driver.
She demonstrates with her hands and imitates the heavy Romanian accent: “Madam, you see that building? Young people rent apartments there at rock-bottom prices, paint a few walls, buy furniture from IKEA, take nice photos, and rent them to tourists for twice the price!”
Her moment of silence was dramatic.
“At that moment I felt as if an invisible hand had shaken me. I looked around at this city that I've known since childhood - I was born in Romania, and my parents immigrated when I was a very small girl. Suddenly I saw not a foreign city, but a playground of opportunities.”
According to a 2023 study by McKinsey Global Institute, the real estate “arbitrage” model - exploiting price gaps between long-term and short-term rental - has become a growth engine of micro real estate entrepreneurship, with average yields of 38% in major cities in Eastern Europe.
From apartment battles to a micro empire
Noa returned to Israel, but Ilana stayed. With 5,000 euros that she managed to raise from her sister, she found a studio apartment in a terrible condition in the historic Lipscani neighborhood.
“The owner, Petru, thought I was crazy when I offered to renovate the apartment at my own expense, a rented apartment. The place was a hole - leaking pipes, peeling wallpaper, the smell of a wet dog. But the location... within walking distance of the old city, the river, all the attractions.”
With a sly smile she pulls out her phone and shows me “before and after” pictures that make my jaw drop in amazement.
“A month of nonstop work. I brought in professionals for electricity and plumbing, I painted myself, bought and hauled furniture. I slept on an inflatable mattress on the floor during the renovation.”
The “after” picture shows a modern, clean and inviting studio apartment - with clever design touches that hide the modest renovation budget.
“The first month was crazy. I paid Petru 300 euros rent, and earned almost 700 euros from the guests. In the second month it was already 850.”
The empire expands
Ilana shows me the app on her phone - five rented apartments, all with a rating of 4.8 stars and above, monthly income of thousands of euros.
“There are days I walk around Bucharest with a smile that doesn't leave my face, with a bunch of keys to five apartments, going from apartment to apartment to check that everything is fine, and I pinch myself. The woman who only 36 months ago cried into her pillow from fear of being evicted from her apartment now runs a small real estate empire of her own.”
She rolls up her sleeve and shows me a small new tattoo - a phoenix bird with the date on which she first landed in Romania.
“My first tattoo, at age 52. To remind myself that you can always start over.”
Not all rosy
Her face sours. “Don't get me wrong, it's no bed of roses. There were guests who left the apartment wrecked, an old neighbor who complained to the municipality that there was a ‘brothel’ in the building because she saw different people going in and out.”
She tells of the night she woke at two in the morning, while actually in Israel, to a panicked call from a French couple of tourists whose key had broken inside the lock, about the complex Romanian bureaucracy, and about the empty periods in winter when tourism fades.
According to data from the European Independent Hosts Association (EHHA), 72% of hosts report at least one incident of significant damage to an apartment in the first year of their activity, and 31% consider giving up the business at this stage.
The theory of real estate arbitrage according to Ilana
“So what does it take to replicate your success?” I asked.
She counts on her fingers: “Sharp eyes to identify opportunities. Thorough market research - I spent two weeks going through hundreds of apartments on Airbnb, checking prices, occupancy and locations. Courage to deal with uncertainty. The ability to see potential in properties in poor condition. An understanding of the local laws - and that's critical!” She points at me for emphasis.
“And above all... presence. You can't manage this remotely. Either you're there, or you have a local partner you trust one hundred percent.”
She falls silent for a moment and looks at her watch.
“In 14 hours I'm in Bucharest, I need to receive a furniture delivery for the new apartment. This time - the sixth apartment, and also the first one I'm buying, not just renting.”
As we part, she says to me: “Come visit. I'll host you in one of my apartments. And who knows, maybe you'll fall in love with the business model and join me?”
Is rental arbitrage your opportunity?
I am left with my cold coffee, musing - how many of my readers are looking out the window right now and imagining themselves in Ilana's shoes? How many are thinking about their last trip abroad and wondering whether they missed a similar opportunity?
The advantages are clear:
- Potential for an especially high return in major cities and tourist areas.
- Quick entry into the international real estate market without the need for high equity for a purchase.
- Operational and managerial flexibility.
But from my experience accompanying many investors, I must warn about the challenges:
1. A regulatory maze - Research the local laws thoroughly! Many cities restrict short-term rentals, require special licenses or even ban the phenomenon entirely. In Paris, Berlin and Barcelona, for example, there are severe restrictions. The fines? They can be dramatic.
2. Remote management is a real challenge - Think about receiving guests at irregular hours, urgent problems in the apartment, cleaning between guests. Will you hire a local management company? That will significantly reduce profitability.
3. Unstable cash flow - While with a regular rental you receive a fixed sum every month, in short-term rental occupancy varies with the seasons, local events and competition. Have you prepared a budget for the “lean” months?
4. Relationship with the property owners - Make sure your lease agreement explicitly allows subletting! I have seen investors who had to pay heavy fines or even were evicted in disgrace after it was discovered that they were renting out the property in violation of the contract.
A 2024 study by HEC Paris found that 43% of real estate arbitrage ventures fail in the first two years, mainly because of ignoring local regulation and underestimating operating costs.
After many years of accompanying real estate investors abroad, my conclusion: rental arbitrage can be an excellent strategy for those who do their homework. It requires in-depth research, careful planning, familiarity with the local market and regulation, and above all - physical presence or a reliable local partner.
Ilana succeeded because she identified an opportunity, knew the language and culture, and was willing to move and manage the business up close.
Rental arbitrage in real estate abroad is not magic. It is hard work. It is obstacles. It is sleepless nights. But for people like Ilana, it can be the way to start from zero and build something meaningful.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית