Checking a property deal: eight questions before you trust the yield

Half past nine at night, the children finally asleep, and the webinar begins. A polished deck, photos of an up-and-coming neighbourhood, a yield in large bold type. Someone explains that they "got in at the previous stage" and have not stopped being grateful since. In the corner of the screen, a timer: registration for this stage closes in 48 hours.

An hour later you close the laptop. From one end of the sofa comes "it sounds serious", from the other "it sounds too good", and the conversation ends with "let's think about it". What lingers is an unpleasant sentence: if we can't tell on our own whether this is good, maybe we're just not smart enough for this.

This is not about intelligence. Brilliant people walk into offers they never checked, and very careful people pass on perfectly reasonable deals. What is missing is not a professional investor's knowledge. It is a fixed set of questions.

A property pitch is built to make you feel, not to make you check

Offers like this lean, knowingly or not, on mechanisms the psychologist Robert Cialdini described in his book Influence: scarcity (the timer, "only a few units left") and social proof (the person who already got in and tells you about it). On top of them sits anchoring, which Amos Tversky and Daniel Kahneman described: the bold number becomes the reference point everything else is measured against. They work on all of us, because they work on how the mind makes fast decisions.

So it is not intelligence that protects you. It is routine. If you ask the same questions of every deal, you do not have to guess.

There is a part of you that wants the money to work, wants to grow, and does not want to discover in five years that the neighbourhood really did take off without you. And there is a part that suspects everything: "It's all a scam, let's not touch it." The first protects you from the feeling of missing out, the second from the risk of getting hurt. Both get a seat here: questions that respect a serious deal and your suspicion alike.

The rules that apply to any investment offer, such as time pressure, licensing and promised returns, have their own piece, when an offer sounds too good to be true. Here we ask only what a property raises.

Eight questions only a property deal raises

This piece does not assess any deal, developer, purchase group or country, and does not call anything good or bad. It gives questions, in four groups.

The property itself

1. Whose name is the land registered in? And what does title registration look like, in Israel or in the country where the property sits? What exactly do you get: a registered right, a contract, or a share in an entity that holds the property?
2. Is there a building permit? A permit, an application filed, or nothing. Three very different answers that sound alike in a slide deck.

The money

3. Where does the money sit until the property exists? In a bank-supervised escrow account (חשבון ליווי), in trust, or in the developer's own account? Kol Zchut (כל זכות), the public rights portal, explains buying from a developer and escrow accounts in Israel.
4. Who earns a commission on the sale itself? The person presenting the deal and the person profiting from it are sometimes the same. That is not wrong in itself, but it is worth knowing.

The number

5. What assumptions sit inside the quoted yield? How many months a year the property is let, what management, maintenance and insurance cost, and whether the figure is before or after all of that.
6. What currency are income and costs in, and what tax applies? In the property's country and in Israel. The Israel Tax Authority publishes the rules on income from property abroad, and currency has its own piece, currency and investment returns.

The contract

7. What does it say about delay? In handover, in letting, in the first payment. Who bears the delay, and what do you receive if it happens?
8. How do you get out? What happens to the money if you want to sell, to whom, and at what price?

Before any property deal: eight questions in writing

• Whose name the land is registered in, and what exactly we receive
• Whether there is a building permit, an application, or nothing
• Where the money sits until the property exists
• Who earns a commission on the sale
• What occupancy, management and maintenance assumptions sit inside the yield
• What currency income and costs are in, and what tax applies here and there
• What the contract says about delays in handover or letting
• How we get out, and what happens to the money if we want to sell

0 of 8 done

The answers come in writing. A spoken answer in a webinar cannot be checked. A written one can be shown to a lawyer, compared with another offer, and read again in the morning. Before investing, check licensing with the relevant authority and consult a lawyer and a licensed investment adviser; the decision is yours.

When someone promises a property yield: what to ask

When a percentage is presented as a "guaranteed yield", the first question is who guarantees it, against what, and what happens if the promise is not kept. "Guaranteed" is a word on a slide until someone shows you, in the contract, who owes what to whom, and what secures it.

The next step is to run the same yield calculation yourself, on paper, with the offer's figures and your own assumptions: months without a tenant, management fees, repairs. The piece on investment-flat yield walks through it step by step.

In AlphaHome: The properties page works out gross yield, net yield and cash-on-cash return for an investment property. Do the same sum on paper for the offer, not on that page: every property entered there counts toward household net worth, and a deal you have not bought does not belong there.

What happens to the household if the money is stuck

The last question is not about the deal but about you. Say handover slips, or the property sits empty. What happens to your month if this money is locked up for three years, earning nothing and impossible to withdraw?

The block below shows one thing only: what a sum that earns nothing is worth in today's money. We picked 3% inflation as a round assumption for the calculation, not a forecast; change it, and the amount, to see your own picture.

What money stuck without income is worth in today's terms

Years ahead3 years

What ₪300,000 then is worth in today's money

₪274,542

₪25,458 of buying power lost along the way

The rate here is an assumption for the example, not a forecast.

In AlphaHome: On the dashboard, "Free to spend until the end of the month" is the month's income minus its expenses, not your savings balance. If it is already tight in an ordinary month, the sum you are thinking of locking away for three years is also what carries the months when that number falls short.

And one house rule that saves a great deal: we don't decide inside the timer. Time pressure is a reason to take more time, not less.

The friend at Friday dinner who already made money

This is the hardest moment. Not the webinar, but a good friend at Friday dinner who says they got into a similar deal three years ago and it is doing nicely.

What helps: be genuinely glad for them, and remember that one story is not a check. Even if their deal was excellent, it tells you nothing about the one on offer to you. What you can do today: send the eight questions to whoever is offering, in writing, and let the answers decide.

And so it doesn't repeat: keep the questions somewhere easy to reach, so you never have to remember them in a moment of excitement.

The morning after the webinar

A decision made against a running timer will look like every decision made against one: quick, with the important questions asked only afterwards. That is not a flaw in you. The situation is built so that no time is left to ask.

Eight fixed questions give that time back. They do not require you to become a property expert, or to reject every offer in advance. They turn each "opportunity" into a page you can read quietly, together, in the morning, when the timer is no longer on the screen. A serious deal will stand up to the questions. One that does not has already given you its answer.

Today, save the eight questions in a note on your phone called "Before any property deal". The next time someone offers you one, they will already be waiting there, ready to send in writing.