Remember those exciting times in your late 20s and early 30s when you were eager to settle down and buy your first property? It was a period filled with hopes and dreams, but also financial realities. Interestingly, many individuals find themselves in a similar situation later in life, desiring to establish a home in Jerusalem. However, they soon realize that it can be quite challenging to navigate the financial aspects of this endeavor. Starting afresh in Jerusalem introduces a unique dynamic to the equation.

What does starting in Jerusalem actually look like? Unlike the availability of starter homes in the range of $150,000 to $200,000 found in some markets, such options are scarce in Jerusalem. It presents a similar predicament faced by young couples aspiring to enter the housing market in America.

I firmly believe that unless you have substantial funds readily available and are willing to spend over $3 million, a more feasible approach is to begin by purchasing a pleasant property in Jerusalem for $1-$2.5 million. This initial step allows you to establish a foothold in the market, and later, when you decide to relocate and sell your American home, you can upgrade to a higher value property in Jerusalem.

There are several reasons why someone might opt not to take a mortgage in their late 50s, and that is perfectly understandable. Another factor could be financial limitations, as it’s essential not to overextend oneself.

Now, let’s delve into why I believe it is advantageous to enter the market:

Sometimes, you purchase an apartment and gradually develop an attachment to it. You might realize that you don’t actually need to buy a larger apartment when you move to Israel. Allow me to share a prime example: my parents bought an apartment approximately 15 years ago. While they were aware that it was a sound investment, they weren’t particularly set on the apartment and could have chosen a more charming property in Baka for a higher price. However, they decided to go with the more affordable option. Fast forward to today, and they have grown to love their purchase, having resided in it for the past five years. They hope to never have to move because they genuinely adore their current property.

Investing your money in the market you are in is a wise move. Consider this scenario: you purchase a property for $1.5 million, and over the next 10 years the market experiences a consistent annual growth of 10-15%. By investing in the market where you plan to upgrade or downgrade, your money grows at the same rate as the market. If you eventually decide to downsize, you have made a solid investment. On the other hand, if you choose to upgrade, your funds have appreciated at a similar pace. This approach is preferable to investing in another market where the performance could be unpredictable.

In my opinion, this strategy represents a prudent investment. Get into the market, even if it means buying a three-bedroom property instead of the four-bedroom one you initially desired. It allows you to establish yourself in Jerusalem’s real estate landscape, benefit from market growth, and make informed decisions about your future property needs.

In conclusion, embarking on the journey of settling down in Jerusalem’s real estate market is an exciting but challenging endeavor. By approaching it with a well-thought-out strategy and considering the benefits of establishing a presence in the market, you can make informed decisions that align with your goals and financial circumstances. Remember, it’s not just about the number of bedrooms; it’s about building a foundation in a market that holds potential for growth and personal satisfaction.

This article is based on the opinions of CapitIL Real Estate CEO and Co-Founder Ben Levene.

Ben Levene is a Jerusalem real estate expert with over 10 years of experience specializing in helping Anglos purchase real estate in Israel. To start your Israel property search, contact Ben at +972-53-822-4336 or [email protected].