The phone rang at ten at night. We were in the midst of Operation Rising Lion (Am KeLavi).
“Are you free for a minute?” David asked. He didn't wait for an answer. “We've decided. We're buying an apartment abroad. We need you to help us.”
I had known David for three years. A successful hi-tech professional, a smart man, someone who doesn't make decisions rashly. But that night he wasn't the usual David. He was a worried father watching the news, hearing about the bombings, looking to do something. Anything.
“Okay,” I said. “When do you want to talk?”
“Now.”
Since the war broke out, and since Operation Roaring Lion (Sha'agat HaAri) went from a military term to a Shabbat-table topic in every Israeli home, my phone hasn't stopped. David wasn't alone. He was one of a whole wave of people who have been coming to me lately, and all of them, without exception, open with the same question:
“Which country? Which city? What's the neighborhood like?”
And they all get the same answer from me:
“Wait. Before we talk about a neighborhood, tell me what the apartment is for.”
This is not a philosophical question. It is a completely practical question, because its answer determines everything - from the country to the floor in the building.
We sat on Zoom, David and his wife Michal on one side, and me with a cup of coffee and patience on the other. “So what are you looking for this apartment to do for you?” I asked.
“That we have a place if we need it,” said Michal.
“Okay. But in the meantime, when you're not there, what does the apartment do? Does it stand empty?”
“No, we'll probably rent it out.”
“Long term? One tenant who lives there for a year? Or Airbnb, rotating tourists?”
Silence. They hadn't thought about it.
“Because it's not the same thing,” I continued. “Long-term rental - you're looking for a residential neighborhood, quiet, functional, close to public transportation, a stable tenant who pays on time. Short-term rental to tourists - you're looking for a sought-after area, the city center, close to attractions, a place a tourist wants to sleep in. And these are not necessarily the same neighborhoods. Sometimes they are at opposite ends of the city.”
But that's still not everything.
Because there is a third category, people who don't really care about current yield. They look ten years ahead. They want to enter a market that is at the beginning of a rise, sit on it, and sell after the value has jumped. For them, a “developing” neighborhood that everyone is running away from may be exactly the right place. If they understand the risk. If they are willing to wait. And if they don't fall for the superstitions of developers who sell “potential” with no target dates.
And there is the fourth category, and these, between you and me, are the most complex to work with. Those who want everything.
“We want to come there for vacations,” said David, “but also for it to yield, but also for it to appreciate, but also for there to be a place if we need it.”
I stopped him.
“David, one apartment can't serve four masters optimally. You can make compromises, but you have to decide what is at the top of the list. Because what suits you for vacations is not necessarily what suits a long-term tenant. And what yields a high current return is not necessarily the property that will appreciate the most over the next decade. When there is no order of priorities, you buy a compromise that doesn't truly satisfy any need.”
I think about another client I met months earlier. Uri, an experienced investor who came to me with a clear budget and a prepared list of questions. “I wanted yield,” he told me. “I chose by myself, without guidance, based on a recommendation in a Facebook group. I bought in a neighborhood that someone said was ‘developing.’”
Three years went by. The neighborhood developed, but very slowly. The yield was mediocre because the area doesn't attract tourists and doesn't attract quality tenants. And the appreciation he expected? “Still waiting,” he said. “Meanwhile I also bought a management headache I didn't expect.”
The problem wasn't the property itself. The problem was that Uri didn't know exactly what he was buying, and why.
I went back to David and Michal.
We spent a full half hour on just this question, what the apartment is for, and for whom. It turned out that security is the emotional drive, but in practice, they want a place they can come to twice a year, and in the meantime it should cover itself at a minimum. Appreciation - a bonus, not a goal. They don't want to be landlords managing tenants from afar. They want a managed Airbnb. They want a city that tourists come to. They want a neighborhood you can walk around in.
Only after we finished defining did we begin talking about countries. Only after choosing a country did we talk about cities. And only after choosing a city did we go down to the neighborhood level.
They sent me a picture two weeks ago. Michal with a cup of coffee on a sunlit balcony. In the background, a sixteen-year-old with headphones who finally agrees it's “okay here.”
“Finally I understand why we bought specifically here,” she wrote.
So before you ask me “What's this neighborhood like?” ask yourselves three questions:
What is the apartment for - current yield, appreciation, personal use, security, a combination?
Who manages it - you remotely, a management company, someone local?
And what is at the top of the list - because not all needs are equal, and not all compromises are equal.
Answers to these questions are worth more than any recommendation you will get in a WhatsApp group.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית