Real estate has historically been one of the best avenues of investment in Israel, due to the country’s rapid rate of growth and relative scarcity of available product. Investors have profited from steady increases in value, and from returns from rentals, which as of this writing, range from 8-10% per year on commercial properties.

Many commercial properties are sold while under construction, and the purchaser pays for the acquisition in staged payments, according to the progress of construction, the final payments executed upon physical transfer of the property and formal registration of ownership. Buyers should receive a bank guarantee for all payments until receiving physical possession and registration in the land registry.

The apartment sales law requires all developers to provide special bank guarantee for payments received before delivery. This also applies to none residential deals. The cost of receiving this bank guarantee is usually born by the buyer in commercial deals, though the law obligates the contractor to provide the bank guarantee. The guarantee can cost up to 1% per annul against the value of each payment.