A businessman who lives abroad most of the year has rented a 950-square-meter (10,225 square feet) mansion in the north-of-Tel-Aviv coastal town of Herzliya Pituah for around NIS 160,000 a month. The one-year lease is thought to be among the highest amounts paid for a residential rental in Israel.
The house, on a two-dunam (half-acre) lot on Hanassi Street, is owned by an American businessman who lived in the property until recently. It features a pool and a whirlpool spa in the yard, parking for four cars and a finished basement with a bar and both poker and pool tables. The main level contains a living room, kitchen, dining area and a television room that at the tenant’s request was converted into a bedroom and bathroom. There are five additional bedrooms upstairs. The yard is landscaped with fruit trees and extensive lawns.
“Luxury leases don’t happen every day,” said Uri Tal, the owner of a Herzliya Pituah real estate agency that was a partner to the deal. “Usually such renters are Russian businessmen who, because they haven’t decided whether to live in Herzliya Pituah or in Tel Aviv, live here for a time before buying a home.”
Tal said that employees of foreign companies such as banks, technology and energy companies on short-term assignment in Israel generally rent homes that cost between $5,000 and $10,000 a month.
Foreign ambassadors generally aim for the $15,000-$25,000 a month range of temporary luxury accommodations, Tal said. He added that he recently brokered a lease for $25,000 a month, for a European embassy.
Or Zohar of Israel Habitat, another Herzliya Pituah real estate office, says the agency brokered a 25-day rental in August to a French businessman for $43,000, about NIS 160,000. Zohar notes that very short-term stays are always more expensive than longer contracts.
According to Tal, the main determinant for rental prices in Herzliya Pituah is the quality of the property itself. “While in homes for purchase location is a major factor, for home rentals, since it’s for a limited period, the standard of the finishings and construction are much more important,” he said. In Herzliya Pituah, he said, the distance from the beach does not greatly affect rents.
Some local homeowners whose homes are very valuable rent them out rather than selling them, Tal notes. He says this group includes people who have moved out of the town “due to age or a change in family status, such as divorce or children leaving home, who have decided the best way to protect their money” is to lease their homes rather than selling them.
Short-term summer or vacation rentals, particularly during the fall and spring Jewish holidays, have become a source of income for some Herzliya Pituah homeowners, Tal says. “Since it’s for a short period the prices are higher” per month than a more extended lease, he explains, adding, “A two or three-month rental can generate as much as would be paid for the property for a year.”
Tal says he knows of a local homeowner who recently turned down an offer to rent out his home for two weeks, for around NIS 400,000. “The house wasn’t on the market, but [the owner] was approached anyway because it was a special property,” Tal says, adding that some homeowners jump at such offers.