Overseas real estate investments have become an increasingly attractive option for Israelis in recent years. To many, buying property abroad sounds like an attractive and easy step: prices that seem more affordable than in Israel, the promise of higher returns, diversification of investments across countries, and sometimes even a gateway to personal opportunities such as a vacation home, a property for future children, or even a base for relocation. But behind the dream of an apartment in Athens, Porto, Larnaca, or Bucharest lies a process that is far more complex than we might think. Beyond choosing the country and the apartment itself, an Israeli investor entering into overseas real estate transactions must deal with issues of taxation, regulation, legal due diligence, money transfers, registration, remote management, and reporting to Israeli authorities. Many guides focus on where to buy, but in practice, almost every destination in the world involves a set of recurring steps and decisions. This is precisely the starting point of this guide: to map out all the steps common to nearly every overseas real estate purchase, so that investors understand not only what to buy, but also how to properly manage the entire process from start to finish.
Start with the goal, not the apartment
One of the most common mistakes made by novice investors is to start by asking, “Which property looks good?” instead of asking the more appropriate question: What is the purpose of the purchase? There is a fundamental difference between an investor seeking a current rental yield and someone looking for a property to renovate and sell, a vacation home for personal use, or a property that could serve as a future residence or facilitate a move abroad.
Defining your goal will influence nearly every decision you make going forward. Those looking to buy an apartment abroad with a passive approach will generally prefer a stable market, a property that is relatively easy to manage, and an area with proven rental demand. In contrast, those willing to take on more risk in exchange for higher profit potential may consider more emerging markets, neighborhoods undergoing transformation, or projects in the early stages of construction.
At this stage, you also need to set a realistic budget. This doesn’t just refer to the price of the property, but to the total cost of the transaction: purchase tax, attorney fees, document translation, inspections, banking fees, a real estate agent’s commission (if applicable), initial renovations, furniture (if needed), and a contingency fund. In practice, many investors find that the gap between the property’s listed price and the actual final cost can be very significant, so it’s important to establish a broad financial framework right from the start.
Choosing a Destination: A Strategic Decision
The next step is choosing the country and city, and for those wondering where to buy an apartment abroad—it’s important to remember that the choice isn’t just a matter of calculating the return on an overseas real estate purchase on paper. A good investment destination is one that offers a combination of stability, transparency, accessibility to foreign investors, relatively easy management, and a level of risk that suits the investor’s profile.
The first step should be to check the regulatory requirements: Are foreigners even allowed to purchase property in that location, and are there any special conditions? In some countries, a foreign resident can purchase property almost as easily as a local citizen, while in others, a local tax ID number, a local bank account, close legal representation, or additional approvals are required for the purchase.
It is equally important to examine the tax structure. With any overseas real estate purchase, you need to consider several layers of taxation: purchase tax at the time of purchase, tax on rental income during the holding period, and sometimes also capital gains tax upon sale. In addition, you must take into account municipal fees, ongoing maintenance costs, and sometimes registration fees. This means that a return that seems attractive during the marketing phase can be significantly reduced after calculating the actual costs.
Another consideration is ease of management. A destination with a difficult local language, opaque bureaucracy, or a less organized market may be less suitable for an Israeli investor seeking income-producing real estate abroad through a passive approach. In contrast, markets where it is relatively easy to find professionals, receive service in a familiar language, and work with clear registration systems make the entire process much easier.
Choosing a Property: It's Important to Focus on Functionality
Once you’ve chosen a destination, it’s time to select the property itself. At this stage, it’s no longer enough to know that the country is of interest or that the return on investment in a particular city looks promising; you need to examine the specific property, the street, the neighborhood, the level of maintenance, and how well it aligns with your predefined goals.
At this stage, it’s important to distinguish between an “attractive” property and a “suitable” one. A beautiful, large, or impressive property isn’t always a good investment. Sometimes, a relatively standard investment apartment abroad, located in an area with stable rental demand, will be a better fit for an investor than a unique property that will be difficult to sell or rent in the future.
It’s also worth considering the type of property in relation to the target audience: Is this an area suited for local renters, families, students, high-tech professionals, tourists, or retirees? Each of these groups is looking for different features, and the gap between a theoretical assumption about demand and the reality on the ground can be significant.
Another point to consider is marketability. A good property is not only one that generates a return, but also one that can be sold relatively easily if the investor wishes to exit the investment. In foreign markets, especially for foreign investors, liquidity and the ability to exit a transaction within a reasonable timeframe are of great importance.
Due Diligence: The True Heart of the Deal
Once you’ve found a suitable property, one of the most critical steps follows: due diligence. This is the stage where you stop relying on presentations, promises, and site visits, and begin to systematically examine what you’re actually buying.
The first step is a legal review. You must verify that the seller is indeed the legal owner of the property and that there are no liens, foreclosures, debts, third-party rights, building code violations, or zoning issues that could hinder the use of the property or its future sale. These are precisely the risks involved in buying an apartment abroad that come up time and time again—and while the legal documents and terminology vary from country to country, the principle is always the same: you must not rely solely on the seller’s or the real estate agent’s word.
At the same time, a physical inspection of the property is required. For an existing apartment, you should check the condition of the infrastructure, moisture, waterproofing, electrical system, plumbing, general wear and tear, and expected maintenance or renovation costs. When dealing with a new property from a contractor, the focus shifts to vetting the developer, permits, timelines, guarantees, and the developer’s track record.
The third aspect is financial. It is important to verify whether the transaction price truly reflects market conditions, whether the listed rental rates are realistic, whether management costs are reasonable, and what happens in less optimistic scenarios, such as periods without tenants, falling prices, or extraordinary expenses. This is precisely the point at which a responsible investor should try to validate the deal, but also try to refute it.
A Lawyer Specializing in the Laws of the Destination Country: Not a Recommendation, but a Necessity
One of the most important steps in any overseas property purchase is choosing a lawyer to represent the buyer’s interests. Legal guidance is crucial, because investing in real estate abroad involves a different legal system, a different language, and, in most cases, procedures and registrations that differ from those in Israel.
Some Israeli companies, which offer properties in projects they have developed themselves, employ lawyers from the target country and, as part of their services, provide comprehensive legal support that includes assistance from a specialized lawyer throughout all the necessary steps in the process.
When purchasing a pre-owned apartment from a private seller, it is important to choose a lawyer who is familiar with the laws, regulations, and latest updates in the destination country. The lawyer’s role is to conduct a legal review, review the contract, verify that the property title is clear, examine the payment terms, handle the required documents, and sometimes also handle or oversee registration with the Land Registry or local registry. In many cases, the lawyer is also the one who explains to the investor the practical implications of contractual clauses that may seem innocuous but could be critical.
Management Company: A Decision That Begins Even Before the Contract Is Signed
Many investors view the choice of a management company as an issue that arises only after the purchase, but in reality, it’s a decision that should be made while the deal is still being evaluated. The reason is simple: the property’s actual return, the quality of maintenance, and operational peace of mind depend largely on who will manage the property going forward.
A property management company typically handles rent collection, finding tenants, addressing repairs, overseeing maintenance, communicating with tenants, and sometimes also representing the owner before local authorities or service providers. For an investor who owns apartments abroad as an investment and does not have a permanent presence there, this is often the only way to make the investment truly passive.
However, not every property management company provides the same level of service. Therefore, it’s important to check in advance what’s included in the management fee, what the reporting routine looks like, who handles emergency issues, how extraordinary expenses are approved, and how success is measured in terms of occupancy and tenant retention. A poor management company can quickly erode your return, even if the property itself is good.
Money Transfers: A Technical Step with Major Implications
Transferring funds abroad may seem like a technical step, but in practice it is one of the most sensitive aspects of a transaction. An international transfer involves fees, exchange rates, processing times, regulatory requirements, and sometimes even verification of the funds’ source by the bank or the recipient.
To avoid delays, it’s important to plan ahead. You’ll typically need a signed purchase contract, the recipient’s account details, identification documents, and sometimes a full explanation of the purpose of the transfer. Furthermore, the availability of the funds is of great importance: if the capital is held in a deposit account, an investment fund, or another financial instrument, it may take additional time before it can actually be used for the purchase.
Another important aspect is reporting in Israel. According to information published by professional sources, an Israeli resident who has transferred a total of 500,000 shekels or more abroad over a 12-month period may be required to report this to the Tax Authority; therefore, it is important to carry out these transfers in a documented, organized manner and in coordination with an accountant or appropriate advisor.
Signing the Contract: The Moment When the Small Details Make All the Difference
Once the due diligence is complete and the funds are ready, it’s time to sign the contract. This is the stage at which the transaction moves from a process of due diligence and making offers to a genuine legal and financial commitment; therefore, every detail in the documents must be clear, agreed upon, and supported by evidence.
The contract should specify, among other things, the payment dates, the delivery date, the allocation of liability between the parties, the condition of the property at the time of purchase, penalties or damages in the event of a breach, and whether there are conditions precedent that protect the buyer in the event of a last-minute problem. In international transactions, legal wording is particularly important because terms that appear standard may have a different meaning under local law.
In many countries, additional documents will also be required, such as a local tax ID number, a valid passport, bank statements, and sometimes even a power of attorney for the lawyer so that he or she can act on behalf of the buyer. The earlier an investor prepares and gathers all the necessary documents in advance, the lower the risk of last-minute complications.
Property Registration: Ownership Must Be Valid on Paper as Well
Even after the contract has been signed and the money paid, the transaction is not fully complete until the property is registered in the buyer’s name with the appropriate registry. This is a crucial step, as it establishes the buyer’s right to the property and allows them to sell, mortgage, or bequeath the property in an orderly manner in the future.
The registration process varies by country, and sometimes even by city or property type. In some markets, it is a relatively quick process, while in others, registration can take weeks or even longer. Therefore, it is important to understand in advance what the timeline is, what documents are required, and whether there are any fees, taxes, or additional approvals that might delay the completion of the registration.
Here, once again, the importance of a local attorney becomes clear. Beyond the initial review, it is usually the attorney who ensures that all documents have been submitted, that no forms are missing, and that the buyer’s rights have been secured not only substantively but also formally. An investor who fails to verify that the registration phase has been completed risks the transaction remaining “up in the air” for longer than expected.
Life After the Purchase: Management, Reporting, and Maintenance
One of the major differences between buying a property abroad and purchasing a property in Israel is that the process doesn’t end at the moment of purchase. Even after the property is registered, you need to manage it, track income and expenses, keep records, and ensure compliance with legal requirements in both the destination country and Israel.
From an operational standpoint, it is important to establish a clear process for handling tenants, maintenance issues, payments, and periodic inspections. Even if there is a property management company, the investor needs to understand how decisions are made, who is authorized to approve extraordinary expenses, and what level of reporting they receive. A property that is not well managed may lose yield, suffer physical damage, or become a constant source of unnecessary expenses.
From a tax perspective, it is important to note that Israelis who own property abroad may be required to file annual tax returns, report rental income, and reconcile taxes paid abroad with their tax liability in Israel. Properly maintaining contracts, transfer certificates, invoices, and management reports is not merely an administrative recommendation, but rather part of sound financial management.
Mistakes That Keep Happening Over and Over Again
In addition to the structured steps, it’s also worth being aware of the common mistakes that many investors make. One of the most notable is making a decision based on aggressive marketing or the promise of high returns, without delving into the details of management, costs, and legal structure.
Another mistake is to rely solely on a real estate agent or marketing firm, without building a support network of a lawyer, an accountant, and other professionals who represent the buyer. Even if the deal itself is sound, the lack of an independent review may expose the investor to problems that weren’t apparent at the outset.
Finally, many people underestimate the associated costs. The difference between theoretical and actual returns lies precisely there: in taxes, maintenance, management fees, money transfers, and periods when the property is not rented out. An investor who understands this from the outset plans more effectively, makes more careful choices, and enters into a transaction with fewer illusions and more control.
An Overview of the Process
Ultimately, buying an apartment as an investment abroad isn’t a single step, but rather a series of decisions that begin long before choosing the apartment and continue long after receiving the keys. Those who manage the process correctly start by defining a goal and a budget, continue by selecting a destination that suits the nature of the investment, conduct thorough due diligence, build a high-quality professional support system, prepare properly for the transfer of funds, and pay full attention to both the registration phase and life after the purchase.
You can expand your knowledge and gain tools for investing in overseas real estate through an overseas real estate course, which includes lectures and hands-on experience in transaction analysis, taxation, and risk management.
What almost all overseas real estate markets have in common is that, whether the property is in Greece, Portugal, Cyprus, Romania, or the U.S., a successful process is based on the same principles: due diligence, documentation, professional guidance, careful planning, and patience. Those who understand this from the outset not only minimize risks but also increase the likelihood that investing in overseas real estate will truly pay off—and become an asset, rather than a source of costly surprises.
Frequently Asked Questions
1. Is a local tax ID number required to purchase property abroad?
Not in all countries, but in most European countries (such as Greece, Portugal, and Malta), a local tax ID number is required to purchase real estate abroad. The tax ID number is required to pay purchase tax, report rental income, and handle the property registration. Usually, the local attorney handles this during the process.
2. Can Israelis buy property abroad without being residents there?
Yes. In most countries, foreigners can purchase property without having to be residents, but there are countries where special permits, a local bank account, or legal representation are required. It is important to check the specific regulations before making a purchase.
3. What are the management fees charged by an overseas asset management company?
Management fees typically range from 2% to 10% of the monthly rent and vary depending on the services included (collection, maintenance, tenant screening, and handling of repairs). Full-service management includes more services and may be more expensive.
4. Do I need to report overseas property to the Israeli Income Tax Authority?
Yes. Israelis who own property abroad are required to file an annual report on rental income and, in some cases, on capital gains upon sale. If you transfer a total of 500,000 NIS or more abroad over a 12-month period, you are required to report this to the Income Tax Authority.
5. Just like when buying a property abroad, can I get a mortgage?
In some countries (such as the U.S., Portugal, and Greece), foreigners can obtain a mortgage, but the conditions are more stringent: a high down payment requirement (20%–40%), proof of employment, and, in some cases, special regulations. In Israel, it is more difficult to obtain a mortgage for an overseas property from Israeli banks. Palmo offers an Israeli mortgage for the purchase of property in Greece in partnership with Loanwise.
6. Is it a good idea to buy a property abroad without physically visiting the location?
In many cases, this is possible, but it depends on the destination. In transparent markets with a clear registration system and the ability to manage properties remotely, it is possible to purchase a property without visiting it in person. However, in complex markets with unclear bureaucracy or a less organized market, an on-site visit and local professional expertise are critical to protecting your investment.
