Zamenhof Tel Aviv, 100m – Secondary

4 rooms, Renovated, Central
Secondary Market

Original transaction on Primary Market

  • Invested so far: 3,210,000 NIS
  • Investors so far: 21
  • Annual rent Income: 3%
  • Minimal investment: 100,000 NIS
Price: 3,210,000 NIS
100% funded
Purchased on 18 Aug 2016

Slices offered on Secondary Market

  • Last price (by index): 3,440,000 NIS
  • Last price date: 18 Jun 2017
Price Slice Investment  
3,370,000 6.2% 210,000
3,852,000 3.1% 120,000

About the property

Facts

  • Type: Residential, apartment
  • Lot: 100m (86m registered)
  • Rooms: 4
  • Baths: 2
  • Balconies: 0
  • Floor: 3/4
  • Built: 1949
  • Condition: Very good, Renovated
  • Price/sqm: 36,400

The property is located on the 3rd floor of a 4 story building, at the corner Zamenhof street and King George street (GUSH 7092, title 31, subtitle 14), at the very center of Tel Aviv city. The property has a living room, 3 bedrooms, half open kitchen, and 2 bathrooms (one connected to the master bedroom). The property's original plan was 86.5 sq meters + 13.5 sq meters balconies. The balconies are now closed and are part of the apartment, as in the whole building.

The property was fully renovated 10 years ago and is in a very good condition. After purchase, minor repairs and extra renovation will be done, before re-renting. There is no elevator at the building but the building has an approved permit for an elevator, so adding an elevator in the following years may raise the property's value.

The building's permit (#786 from 28/2/47) includes a basement, a grounds floor with 5 shops and 2 offices, and 3 more floors. During the years, according to Tel Aviv's city hall archive, 3 additional permits were given, including a permit for an elevator. On the ground floor there are commercial use properties, including food and beverage business, laundry business and shops.

The building is built in a conventional style, with concrete and plaster covered iron. All the original balconies in the building were closed with blinds or vitrines. 20 lots are listed on the building's shared listing order, and there are 19 lots actually. The 19th lot built on the roof does not have exclusive rights of use of the roof, according to land commissioner's decision (11/05).

Highlights

  1. Central location
  2. Renovated
  3. Potential for value rise

Location

The property is located at the corner Zamenhof street and King George street, at the very center of Tel Aviv city.

Zamenhof is a one way street and the car access to the property is from Bar Kiva street. Zamenhof st. is characterized by mainly residential buildings with a combination of commercial ground floors. King George is a commercial street with combined residential and commercial use, including restaurants, pubs, workshops, and shops. It is one of the city's main streets for public transport.

The environment is characterized by old residential buildings of 3 and 4 floors next to newer buildings of 6 floors. The environmental development is complete and there is a parking shortage.

Some of the city culture and leisure institutes close to the property are Habima Theatre, The Philharmonic, Rav hen cinema, Beit Lessin Theatre, restaurants, pubs, and many coffee shops.

Rent Income

According to a demand review based on similar properties at the neighborhood, expected rent is 8000-9000 NIS per month.

Monthly rent income of 8,500 NIS would bring an annual rent yield of 3.2%

Potential

  • There is no elevator at the building but the building has an approved permit for an elevator, so adding an elevator in the following years may raise the property's value.
  • The property was built before 1980 and has not yet been through urban regeneration, therefore it presumably meets the conditions for strengthening and renovating the building under Tama38 according to Tel Aviv Rova 3 plans (requires examination of the building according to 413 Standard). However, there are 2 units built on the roof and shops and offices on the ground floor and basement, which make it difficult to realize Tama38 rights.
  • The property is located at a high demand area at the very center of Tel Aviv. The supply of new properties in Tel Aviv area in the following years is limited and therefore we expect a positive price change is the long term.

Appraisal

A valuation of the property was performed by Oded Landau - certified real estate appraiser, at July 10 2016.

Key points from the appraisal report:

Based on an acquisition review of similar properties in the property's neighborhood during 2015-2016, the average price for properties on the main street (King George) was 36,000 NIS per square meter and average price for properties on the smaller streets was 38,000 NIS per square meter. Most acquisitions were during 2015 and early 2016.

According to a survey made by the government appraisal, a nominal price increase of 8% was observed in 4-room apartments in Tel Aviv from the first quarter of 2015 to the first quarter of 2016.

The registered size of the property is 86.5 meters. The appraisal was performed according to this size, as comparable property prices are taken for registered sizes as well.

The valuation performed at a comparative approach. In addition, valuation was based on location, registered size, actual size, internal condition, floor, building, price rise, planning and legislation affects, and other parameters.

The valuated price per square meter for this property is 37,200 NIS.

Total property value: 37,200 NIS * 86.5 = 3,220,000 NIS

We managed to negotiate a discounted price of 3,150,000 NIS, and since negotiations started - property prices in Tel Aviv increased even more so the actual property price reflects to our opinion a discount of 7%.

Investment Summary

Purchase Price 3,150,000 NIS
Agent Costs 0 NIS
Repairs and renovation 60,000 NIS
Funding Target 3,210,000 NIS

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