Remodel or Upgrade?

There are two prevalent situations presently in Israel, buying a new apartment from a builder where your competition is the builders standard and existing like apartments in the area.  Upgrading from the builders standard is necesssary, not only for your enjoyment but to set your property apart for future resale.  Presently, the phenomenon in Israel is that the apartment bought in the pre-built stage will be worth more than you paid for it when it is completed, so invest in upgrades that will set your property apart! Except for luxury buildings, builders standards in Israel are only worth sticking with if you want the property strictly as a long-term rental investment, not resale.

The basic rule in real estate is that you should not upgrade beyond the class of your neighborhood competition if you are looking at resale in a few years.  Upgrading too high will not regain your investment, in other words a buyer will not pay your remodeling bill.

For existing older apartments, a conversation with a bank executive revealed to me that at the present time “flipping” apartments that are old and worn out is a strong market in most city areas of Israel if you simply update the basics, plumbing, electrical, paint and kitchen and bath fixtures. 

Areas such as Raanana and Herzlyah, older neighborhoods of Tel Aviv, where land for development is essentially boundaried, investments in upgrades and remodeling can well pay off!  According to Haaretz buying and selling in Ramat Gan, where demand exceeds supply, will pay off regardless of condition.

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