Commercial Purchase
Commercial purchase
Buying real estate in Israel is something that many people do or have done in the past.
On the other hand, buying commercial real estate is something else entirely. Typically, these are investors looking for commercial premises to buy. Commercial properties are recognized as long-term and stable investments.
Large companies that want to settle somewhere to stay permanently also buy them, but this is rarer. Commercial real estate includes industrial buildings, shops, offices, restaurants-cafes-bars, shopping centers, office buildings, etc.
Buying a commercial property is a high-yield investment. Taxes on residential investments are increasing and therefore it is an alternative worth considering. The prices of these premises are almost always lower than those of residential premises. Not only that, the gross rental profitability is around 8 to 10%. Which is double the 3 to 5% that residential rentals bring in. In addition, there is less risk of non-payment of rent and the security of the investment is better.
How and where to buy commercial premises
To enjoy the benefits that renting a commercial property offers, you must first choose its location carefully. Buying a commercial property for an investment means that at the end of the road the investor will have a profitable investment. To do this, the property purchased must be located in one of the best-placed commercial locations. Whether in the center of the country or elsewhere, the property must be located at a strategic point. It must be well served by public transport and easy to access.
To buy a commercial property it is better to do it with the help of a lawyer and/or a real estate agency. This will allow the buyer to find a wider choice and to have the advice of experts in this field. It is also possible to search on the Internet, but only if the buyer is already well-versed in real estate. All cities in Israel have many small and large commercial spaces for sale. The trick is to find the best located and most profitable ones.
The advantages of commercial leasing
- Profitability of commercial premises is higher than that of housing
- The leases for these are always long term, so no frequent changes of tenants.
- The details and clauses of the lease for commercial premises are much freer
- Interior and/or exterior development work is the responsibility of the tenant
- Maintenance and management costs as well as housing tax are the responsibility of the tenant.
The purchase contract
For the investment to be profitable and secure, certain clauses must absolutely be included in the purchase contract. First of all, it concerns the duration of the rental, the longer it is, the more secure it will be. Then, the strongest possible guarantees are needed to avoid later problems. And finally, and most importantly, you must choose a suitable tenant.
For this it will be necessary to check the backgrounds of these, both private and professional. Also check that they do not have a criminal record or other problems with local or national authorities.
