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Real estate investment in Greece attracts many Israeli investors due to its attractive prices and tourism potential. However, like any overseas investment, there are pitfalls that can lead to failure and heavy losses. How can you avoid the mistakes that investors make time and time again?
Investing in Greek real estate has gained momentum among Israelis in recent years, but as with any complex process—especially one conducted abroad and largely in a foreign language—there are common mistakes that foreign investors tend to make when investing in the country.
To help you make wise investment decisions, we’ve compiled a list of the top 5 mistakes to avoid when investing in Greek real estate—and how to steer clear of them.
One of the most costly mistakes Israeli investors make is setting unrealistic expectations without examining the actual data on the Greek market. Many are lured by eye-catching ads promising “profitable rentals to tourists” or “X percent annual returns,” without taking the time to thoroughly investigate the reality on the ground.
The actual data tells a completely different story. In the capital’s city center, the average return on renting apartments in Athens ranges from 5% to 7% per year gross, not net. In the suburbs and on the islands, the yield can be even lower—sometimes less than 3% per year. Furthermore, some cities restrict short-term rentals like Airbnb to protect the local housing market.
The problem is even more pronounced when investors rely on year-round tourism potential. On the islands, for example, more than half of the country’s tourist visits are concentrated in the summer months alone—July through September. The result: nine months of relatively low occupancy.
The solution begins with a thorough analysis of local market data, consultation with experienced property managers, and an examination of annual occupancy rates in the specific area. It is important to remember that each neighborhood may have completely different characteristics in terms of demand and the types of tenants it attracts.
This is perhaps the most costly mistake investors make when buying Greek real estate. The legal system in Greece differs from that in Israel and involves unique complexities that require a thorough professional review before any purchase.
Tens of thousands of properties in Greece have not yet been properly registered with the Land Registry, or involve unregulated building violations. Particularly in Athens and rural areas, there are frequent cases of incomplete registrations, properties with unresolved inheritance issues, or hidden liens that are not apparent to foreign investors.
The risks include purchasing a property that does not actually belong to the seller, legal claims from heirs or creditors, delays of months or even years in registering the property in the new buyer’s name, and substantial legal expenses to resolve these complications.
A savvy investor will request confirmation that the property is free of any liens or debts before signing, will work with a local real estate attorney, and will ensure that all legal documents are in order and up to date.
The Greek real estate market is less regulated than the Israeli market, and enforcement against unlicensed brokers is less stringent. As a result, a situation has arisen in which anyone can present themselves as a “real estate broker” without having a license, professional liability insurance, or any real experience in the field.
The catch is that unlicensed brokers sometimes offer lower prices or “special deals,” but in reality, they may expose investors to significant risks. Without a license and professional liability insurance, there is no one to hold accountable in the event of a problem.
The risks include making down payments on properties that do not actually belong to the seller, entering into transactions involving properties that are subject to liens or debts, significant delays in the purchase process, and having no one to turn to in the event of a breach of contract.
The solution is to ensure that the real estate agent is licensed, holds professional liability insurance, and has a proven track record of assisting foreign investors. It is also advisable to seek recommendations from previous clients and check their reputation in the local market.
Furthermore, compared to Northern Europe, where winter heating costs can reach astronomical amounts, Greece’s Mediterranean climate significantly reduces the need for heating. This translates into savings of hundreds of euros during the winter months.
Apartment prices in Athens may seem attractive, but many investors focus on the purchase phase and overlook the equally important phase—the day-to-day management of the property. Investing in real estate from a distance—when the investor lives in Israel and the property is located in Greece—requires a professional and reliable management system.
Ongoing maintenance costs in Greece may be higher than expected: maintaining a short-term rental apartment in Athens can cost €1,000 or more, while maintaining a villa on the islands can be even more expensive. These expenses include taxes, building maintenance, cleaning, routine repairs, insurance, and the annual ENFIA fee.
Without professional management, an investor may face many problems: bills that aren’t paid on time and hefty fines, tenants who are late or fail to pay rent, maintenance issues that aren’t addressed promptly and lead to greater damage, and long periods of vacancy due to a lack of attention to tenant turnover.
The solution is to choose a professional property management company that provides regular reports, effectively collects rent, promptly addresses maintenance issues, and handles all bureaucratic and legal matters.
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This is one of the most common mistakes made by investors around the world. Investors see an ad that says, “Apartment in Athens for only €55,000!” and rush to jump on the deal without realizing that the purchase price is just the beginning.
Related Costs associated with buying a home in Greece amount to an average of an additional 10%–15% of the property price. For example, an apartment priced at €100,000 may actually cost around €112,000–€115,000 after purchase taxes (3% on resale properties or VAT on new apartments), professional fees for lawyers and notaries, and registration costs.
It is equally important to set aside a budget for renovating the property, which could account for around 40% of the total investment. In addition, it is important to keep in mind the annual ENFIA tax and the ongoing costs that will be incurred after the purchase.
Investors who fail to plan ahead may find themselves short on funds as early as the purchase stage, forgo essential services such as legal counsel “to save money,” or take on a property without the financial means to maintain and manage it properly.
A successful real estate investment in Greece requires thorough preparation, professional due diligence, and guidance from experienced professionals. Successful investors are those who understand that the investment process begins long before the purchase and continues long after it.
It’s important to remember: Any of these mistakes can lead to a failed investment, but they can all be avoided with advance planning, professional guidance, and a deep understanding of the local market. The best investment is one made in an informed and professional manner.
The information contained in this document is intended for general purposes only and does not constitute legal, regulatory, financial, or tax advice. The authors do not warrant that the information is accurate, complete, or up-to-date, and assume no liability whatsoever for reliance upon it. Before taking any action, it is recommended to consult with an attorney or a qualified professional advisor. Nothing herein constitutes an offer or recommendation to make any investment, and any action taken is solely at the reader’s own risk.
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