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Apartment owners in a four-story building on the corner of a busy intersection in Tel Aviv found a quick and easy way to earn tens of thousands of shekels a month: They rented the roof of the building to the cellular telephone companies, which set up relay antenna there. Each company pays an average of $1,500 per month per antenna, netting the building's owners about $4,500 per month.

This is not an extraordinary case, either. If Tel Aviv residents look skyward they will see a veritable forest of cellular antennae sprouting from their rooftops. Silently but steadily, the cellular companies have been putting up more and more antennae. A similar sight will probably greet the watchful eyes of residents of other cities, too.

Real estate industry sources say the rental of rooftops for cellular antennae is a relatively fast and simple way to profit from a property. The cellular companies are responsible for both obtaining a permit from the local planning committee for setting up the antenna and for maintaining the site. If just one apartment owner has title to the roof, he must obtain the consent of the other apartment owners regarding the placement of the antenna. If the roof belongs to all the apartment owners, they must all come to an agreement. In many cases, tenants' fears of the hazardous effects of radiation prevents the placement of an antenna on their roof.

Billboard boost

Alon Waxman, a real estate assessor and marketing manager for Real Estate Participations, which specializes in property improvement, explains a few other ways of earning money on a property. One is by allowing a billboard to be hung on the side of the building. According to Waxman, billboard companies are prepared to pay up to $6,000 per month, a sum that is split among the building's tenants.

"This is an option that can net a tremendous amount of money, depending on the location of the building," says Waxman. "Along the Ayalon route in the Dan region, for example, the payment for the placement of a billboard on the side of a building can top $10,000 per month."

In addition to the tenant's consent, the hanging of a billboard on the side of a residential building requires a permit from the municipality and the payment of a billboard fee.

Another way of increasing revenues from a property, and which does not require a special permit from the local authority, is to split an apartment into smaller units to be rented separately. Still, says Waxman, if there are separate entrances, the split requires a permit from the municipality.

Beyond the quick ways to increase revenues from a property without obtaining special permits, there is the bureaucratically more complicated method of maximizing land use or increasing construction percentages (building additional stories). Other ways include the rezoning of the land or the designation of the property (such as from industrial to commercial).

Waxman explains that the value of a property is based on its designation - residential, business or commercial - and on the land's potential for a specific designation. The potential uses for land are determined by its physical characteristics - its location and the planning and construction laws that apply to it. These are usually included in the town plan prepared by the local authorities and approved by the regional and state authorities.

Changes in a town plan can increase or decrease the value of a property. Town plans are freely accessible at local authority offices, so when a buyer purchases property he must check the plans that concern the property in order to weigh the possibility or risk of future changes. A buyer should also ask the local planning committee about plans that have been filed for approval in the surrounding area.

Under what circumstances can a property be improved?

Waxman: "In principle, almost any property can be improved in keeping with its designation, its use and that of the surrounding properties. Improving a property is also subject to the owner's approval and the applicable laws."

What are the stages and timetable for improving a property?

"Any interested party, and of course the landowner, can initiate a specific plan for a property [increasing building percentages, changing its designation, etc.] or ask for a permit for an irregular use not included in the town plan.

A landlord who wants to upgrade his property must first check what he is permitted to do under the existing plans, and then submit a detailed alteration plan accordingly. The plan, which is prepared by an architect, must first be approved by the local committee, and where necessary, by the regional committee of the national planning and building council. The time it takes to obtain approval varies from one committee to another, depending on their work load.

In cases in which all the building rights have not been fully exploited, only the approval of the local committee is required, usually expediting the improvement process. Plans that require the approval of the regional or national committee usually involve zoning changes or increasing building rights. For this reason, the approval process can take a long time, particularly if the plan requires local or regional council approval. This can lead to a long drawn-out and exhausting process, since various organizations may file objections to a plan.

A year to 18 months is considered short for the approval of a plan by the local and regional committees. Some plans may even take many years to get approval. In the big cities obtaining approval for improvement plans is particularly time-consuming.

How much does it cost to improve a property?

"There is no fee for filing the plans with the committees, but the consultants, architects and assessors charge for their work in keeping with the size of the lot and the scope of the construction, and their services can cost between NIS 20,000 and NIS 300,000. The defense and housing and construction ministries have formulas for calculating the wages of consultants."

Fees and taxes

After a plan has been approved, the developer must pay an improvement tax, which is levied by the local authority when the value of a property rises as a result of improved building rights and/or land rezoning - such as from agriculture to residential or commercial purposes. The tax is 50 percent of the value of the improvement, and must be paid when the landowner exercises the approved rights or acts on the rezoning change.

The value of the improvement is determined by an assessor who works on behalf of the local authority. The law allows the property owner or other concerned parties to submit a counter-assessment within 30 days. The assessors hired by the two sides then try to reach a compromise on an agreed assessment, which then serves as the basis for the improvement tax. If the sides cannot reach an agreement, the authority appoints another assessor as an arbiter.

Waxman offers two examples of property improvement in which Real Estate Participations is involved: A 2.5-dunam (.625-acre) lot in the light industry zone in Ramat Hasharon currently has a built-up rental area of 1,400 square meters (15,000 square feet). The existing one-story prefabricated structures will be torn down and replaced with a four-story building with 4,000 square meters of offices and commercial space. The rent revenues for the new space will be $1.5-$2 more per square meter than before, and the landowner will enjoy revenues from the additional 2,600 square meters of new rental space.

The second example is of a building in downtown Tiberias, where some 1,110 square meters were added to an existing building, increasing revenue potential by about 35 percent.