Globes, Guy Lieberman, 15.03.2020
About ten years ago, Niv Savyon from Ramat Gan purchased an investment apartment on the bustling Katznelson Street in the neighboring city of Givatayim. Dironat would be the more accurate definition since its size amounts to only a room and a half. Savion paid NIS 400,000 for the property he purchased, and the rental income was also modest and stood at NIS 1,000. "I had friends who said, for NIS 1,000, are you dealing with that?", He recalls, and immediately adds when the sound of victory is felt in his voice. "Today it is NIS 3,200, and I estimate that the apartment is worth NIS 1.3 million."
Why did you choose this apartment?
"My wife and I have come to the conclusion that it is worth investing and buying an apartment. Maybe you will have children, we may have a pension. Precisely, you released some education fund, and then the amounts were much more reasonable, not like today for you to start an apartment.
How much have you invested in this apartment to date?
"I didn't invest anything. Air conditioner here, there repair. Minor things. Nothing significant."
Have you got a ten-year apartment without depreciation?
"I have no depreciation and all the time she has been leased. The advice I have to tell people about this is that I had a very good tenant, but at one point she had a financial problem, and I told her, 'I'm ready to drop a bit, just stay.' To lower the price, it is important for peace of mind to keep good people. "
When you say "go down a bit", what do you mean?
"It was ten percent and it was temporary."
Savion explains that he used to invest in various channels in the past, but he feels more comfortable in real estate. "I believe real estate doesn't go down, and even if it goes down it doesn't go down drastically. It goes down a bit and fixes itself. We've hit a couple of very significant declines that you don't know how to deal with. And in the end, you have some property you can always rent. It can be given to one of the children or it can be used for your pension and usually the value increases. "
"We were unable to find students at the BA"
We met Savyon as part of the Globes Real Estate Investment Podcast, "Money in the Wall," where people who decided to invest in real estate were hosted. When we asked to find out what his first investment in the field was, we heard from Savyon that the beginning was not really successful.
"20 years ago I was already interested in apartments in Be'er Sheva. I even bought an apartment with my wife's family," he says. It was a three-room apartment in the fourth building, near the university. "If I remember correctly, it cost around $ 50,000," he says, frowning in an attempt to recall the exact price.
"For some reason, I couldn't find tenants there. The ideal was to find student renters, and I couldn't find one. I found a new immigrant who had trouble paying and disappeared with the key."
You're the first to say that he couldn't find a student in Be'er Sheva.
"Probably so," he laughs, adding: "In the end we sold the apartment. Because we didn't want to mess with it too much." "Distance was also a consideration:" I don't like to buy distant things. Don't like the trips. I would not buy overseas, neither in Germany nor in the US, where I constantly receive offers to buy properties. "
Savion speaks diligently, but as we try to find out more about the issue of overseas investment, he explains that his approach has sharpened after testing a real estate deal in Berlin a decade ago.
"One of the companies selling Israeli apartments offered me to buy an apartment there and I even went there. I think the price was 1,500 euros per meter. The graffiti on the building was obviously not in their prospect, but I saw it. Like any Israeli, I started talking to people on the street, and I was told "The logical price is actually € 1,000 per meter - so I dropped the deal. In retrospect I may have made the mistake that prices in Berlin have gone up, but at the same time it seemed a bad investment to me."
"In the end I bought myself an office"
Beside the apartment Savyon owns in Givatayim, he also owns the office in which he works in Tel Aviv, which he also purchased as an investment for everything. "I've always rented rooms in other offices. On one hand you have everything, and you don't have to deal with electricity, management fees and property taxes - you pay one payment to the landlord and that's it. Buying my own office at the Maariv junction. " It's a relatively small office, "30 feet gross, and 20 feet net," he explains.
Savion said the investment was already successful for him. "The office cost me NIS 300,000 and I refurbished it to my taste because I knew I was going to be sitting there. Today I think it can already be sold for NIS 500,000. In my estimation the price will still rise."
Why?
"What is good about the Maariv junction is that within two minutes you are in Ibn Gvirol, and everywhere in the city. It is a fantastic location. Soon the light rail also gets there - there is a large station with the intersection of two lines. In my opinion it will only cost."
Alongside the numbers that worked out for Savyon well, he admits he was another factor that "helped" the deal - his wife. "The only question was that the deal was complicated. There was an entrepreneur who took an option on all the offices on the floor and he actually sold some subdivisions, so it wasn't really clear to me who I was doing the deal with. I didn't understand all the legal aspects, and that's a little bit I was pressured, but my wife gave me the push and said 'In the worst case, we lost the money. It won't knock us, so go ahead.' "
Quite brave, it's NIS 300,000.
"She's a brave woman."