Oren is an accountant, forty-something, the kind who checks every investment three times before moving. He has a family, he has savings built through hard work, and he has no intention of throwing them away on a pretty promise. He is not the type who jumps at opportunities.
He sent me a screenshot of the brochure before he even asked a question.
“Look at this,” he wrote. “The whole market talks about a 5% yield. Here they promise double.”
I knew that tone. Not a question, excitement looking for confirmation.
The brochure did a good job. Pictures of a penthouse apartment with a rooftop jacuzzi, a neat yield table, and a “frequently asked questions” section that looked as if they had thought of everything.
He asked me to go over the contract before he signed. I did, but not only the contract, I asked to see the presentation itself, the table underlying the promise.
That is where the real story began.
The nightly rate appearing in the table was taken from the most expensive apartment found in the area - a penthouse with a jacuzzi, near the metro, of the kind priced far higher than an ordinary first-floor apartment. Oren had bought a standard unit. Not the one in the picture.
That was only the beginning.
I asked him: “Is the price in the table what the guest pays, or what you receive?” He didn't know there was a difference.
There is a big difference. The price that appears on booking sites includes cleaning fees, includes local taxes. In practice, what reaches the apartment owner is less than half of the sum you see in the table. And from that, about 25% more goes to the management company. And from that, water, electricity, building committee fees, internet.
I showed him the calculation on paper, line by line. The 10% yield presented to him, after we removed everything the brochure “forgot” to mention, shrank to something close to 4%.
Oren was silent for a long minute. Then he said something I didn't expect.
“I know it isn't double. Even with 4% I know how to live. But understand my equation: with this money I can't even raise equity for an apartment in Israel. And if I do buy in the periphery, for an amount similar to what I'm putting in here, the yield in Israel will be lower than what I get there, even after all the deductions you showed me.”
That stopped me for a moment. Because he wasn't wrong.
I checked his numbers with him against the Israeli market, and it wasn't hard to agree with him. In the periphery, at a price he can afford, the real yield is usually lower than what he gets there, even after we removed all the layers. The investment still makes sense for him. Just not for the reason the brochure tried to sell him.
And that is exactly the point I wanted him to understand: the number he needs to decide from is not the 10% promised to him. It is the real 4%, against his real alternative. Two completely different decisions, even if the final outcome is the same.
I also checked something else that Oren hadn't thought to ask - who is buying in this project. It turned out that all the units are marketed exclusively to Israelis. That sounds convenient, a developer who speaks Hebrew, support in Hebrew. But it means something else: when you want to sell in a few years, who is your potential buyer? Only another Israeli, who will go through exactly the same process you went through now. A closed market doesn't build liquidity.
In the end Oren did not give up on the investment. He bought it with eyes open, at the real price, not according to the presentation, and out of an honest comparison with his alternative in Israel, not against an inflated promise. He sleeps well at night because he knows exactly what he has, and why he bought it.
I think about that conversation a lot. The problem isn't that developers present an optimistic picture, everyone does that to some degree. The problem is when a single figure is presented as fact, without disclosing where it came from, and without giving you the tools to compare it correctly with your real alternative.
If you are shown a yield table, ask: is this price the area average, or its peak? Is it before expenses, or after? And most importantly - what am I really comparing it against?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית