A Win-win Situation for the Working-class Israeli Resident

Subletting apartments while the tenant travels abroad has become the rage in recent years.

The e-mail was titled "I'd move back to my parents' house for the week," and it contained a tempting offer: "For all of you living in Tel Aviv. Are any of you interested in receiving 700 euros and have an empty apartment that could house four people from Holland for week in July?"

What a great idea, I thought: 700 euros - that's NIS 3,500 - without raising a finger, aside from the risk that I'd go crazy back at my parents even for only seven nights. My apartment is large enough for four people. The catch: My roommate might not appreciate being kicked out. Prices are still going up and that includes home prices, which ultimately pushes up rents as well. It seems that Israel just keeps getting more expensive, and people are looking for ways to keep their heads above water.

Tel Aviv residents understood long ago that you don't leave an apartment sitting empty when you go abroad, and trading apartments when traveling has become accepted practice here, too. But now this trend is being increasingly driven by economic need, and no small number of people are going beyond renting out their apartments when they go abroad - they're renting them out when they're still in Israel.

Rami, 36, said he and his wife hadn't considered renting out their apartment in central Tel Aviv when they went to India three years ago. "We didn't look into that option at all, but we saw a flyer offering students extra money, and it turned out to be about an offer to rent apartments to French tourists who were willing to pay a lot to be close to the beach. At the time we were paying NIS 4,500 a month in rent, and a couple plus their 20-year-old daughter paid us NIS 13,500 for the month they stayed in our apartment. It covered our entire trip and even left us with extra," he recalled.

They had no qualms about leaving all their property in the hands of strangers. "This wasn't the first time we let other people stay in our apartment when we went abroad. Beforehand we'd lived on Nachmani Street [in Tel Aviv], and an Israeli couple who lived in London rented the apartment from us for NIS 6,000. In the next apartment, next to the sea, we realized we were sitting on a gold mine, since French tourists loved the location and were willing to pay lots to be there. For that price, we decided to take the risk, and they looked to be decent people. They even left us a gift: a copy of Lonely Planet's guide to Laos, perhaps to hint that they wanted us to go away next year, too."

Their landlord realized they had subletted their apartment, but didn't care, they said.

"We told him that they were family," said Rami.

Nowadays, he and his wife have children and live in an apartment far from the center of the country. They no longer rent out their home. "I wouldn't recommend doing it if it means returning to your parents' house, but if you're going abroad it's a good deal," he said.

Zehavit rented out her apartment in an attempt to save it when she found herself in a financial crisis. "I'm self-employed and found myself without projects, and thus without money. I want to keep my apartment, so when a friend asked me to watch his apartment in Givatayim for a month, that was my lifesaver. I moved into his apartment in order to watch his cat, and rented out my apartment to a guy who was moving to Tel Aviv and waiting for his permanent apartment to free up. It suited both of us. It's not nice to exile myself and I don't want to leave Tel Aviv, but I pay NIS 4,000 in rent before starting on luxuries like food, cigarettes and alcohol. This was a financial opportunity."

Zehavit says she had rented out her apartment in the past. "The first time was when I went abroad for work for three months, and rented my home to a friend who had just broken up with his girlfriend and was coming with nothing more than his underwear. The next time I flew abroad knowing that since I was between jobs, it was cheaper simply to be abroad. I made a rough calculation of how much it costs to live in Tel Aviv for a day, and looked into how much I'd need for some relatively cheap destinations abroad, including the flight. Travel always wins. Every time the bug bites me, I rent out my apartment and fly somewhere."

Her last tenant didn't pay in full and left a mess in his wake. Since then, Zehavit has started collecting rent money in advance and making her subletters sign contracts, she said.

Setting the price

The subletting market has taken a more formal form over the past few years thanks not only to forums and Facebook groups but also through sites such as Airbnb and Tellavista.com. Airbnb offers a platform for people to rent out apartments around the world to travelers, while Tellavista is an Israeli site that offers short-term rentals in and around Tel Aviv. It recently expanded to other countries, and now offers rentals in Barcelona and Berlin, among others.

"The idea was born three years ago," said CEO Roee Ziv. "We wanted to connect people who were leaving their apartments for the summer with people who were looking for short-term apartment rentals instead of hotels. We conducted some market research and found that no one was offering this service. There were Internet boards, but their information was inconsistent. We wanted a platform that took responsibility and could be used to actually rent a place."

This means that renters pay Tellavista instead of giving their money directly to the person renting out the apartment. "This way, neither the apartment owner nor the renters can be defrauded," he said. "An apartment owner who tries to rip off a tourist won't see any money. And our interface is simple and convenient: If you see an apartment you like, you can launch a chat with the apartment owner or just reserve it with your credit card. We also tightly control the reviews about each apartment and make sure that only people who lived there can write about it. The apartment owners can respond if they like."

The apartment owners are the ones setting prices, and there's a wide range. "You can offer a room within an apartment for $20 a night, or a luxury home in Neveh Tzedek for $300," says Ziv.

Some of the prices are surprising. A four-room apartment that looks mediocre based on the photos is being offered for $133, for instance. Yet four tourists already rented and reviewed it.

There are a range of people renting out their homes, said Ziv. Some rent out a room, while others rent out their entire apartment. "We have a lecturer who splits his time between Israel and the United States, and when she goes abroad she rents out her flat. We also have flight attendants who rent out their homes or their rooms when they're gone for several days. Some people go abroad for the summer and just don't want to leave their homes empty, and for others, this is their business. There are even companies with multiple apartments, anywhere from five to 200."

The concept of subletting has gained significant prominence over the past year due to the economic situation in Europe and Israel, he added. "People are looking for a way to make money, to travel cheaply or to have a more unique vacation. This lets you stay in a neighborhood that lacks hotels. The supply has significantly increased over the past year."

The sites offer a wide range of options, including apartments where someone is renting out the couch or places that look lived-in and are apparently being rented out as a one-off. In some of the ads, the owners state that they will be staying in the apartment and present themselves as friendly and helpful to tourists.

Dimitry rents out his family's apartment via Tellavista when they go abroad. He charges $100 a day. Before leaving, the family locks its most precious possessions in a room. "Of course I'm worried about damage, but how much can you worry? I'm covered by insurance and deposits. It's worth it, since every rental translates into another vacation. When we come home, we don't talk about how much we spent but rather how much we made," he said.

Not only French tourists

The market isn't confined only to Tel Aviv. French tourists also like the cities of Netanya and Ashdod, and since the latter lacks hotels, a thriving vacation rental market has arisen. Valerie, a real estate agent at Maxim Home, says local landowners charge about 2,000 euros to rent out their apartments for two to three weeks. Valerie says that nowadays she offers tourists only vacation rental homes, since she ran into problems over quality when renting out apartments that were otherwise lived in.

Other real estate agents actively seek out city residents who are willing to rent out their homes for several thousand shekels a month. "Apartments near the marina, with a view of the sea, are in high demand," said Re/Max realtor Avi Alook. "Sometimes realtors even go knocking on doors and offering residents as much as NIS 12,000 to rent out their flats. Everyone profits."

Meanwhile, in Netanya, a four-room apartment in the city center close to the beach can rent for 500 euros a week, said a local realtor.

Living like kings

This easy money has a few catches, however. First off, if you rent your apartment and are not actually the owner, subletting it may be a violation of your rental contract. Most of the people listing rentals on these websites own the apartments, said attorney Ofer Even. "Most rental contracts specify that subletting is forbidden. If the landlord comes and finds someone else living in the apartment, he can cancel the contract," said Even. "[Subletting] is a major risk for apartment owners, since they could find someone they didn't rent to living in their apartment. And if the subletter doesn't want to leave, the owner has no way of forcing him. Renters often don't sign contracts with their subletters. If the apartment is damaged or someone is injured in the apartment, insurance won't cover it unless the rental contract specifies that the renter can sublet. So if a subletter causes damage to the apartment, it's the renter who has to pay."

This applies even if the renter says he's letting a relative stay at his apartment. "Most rental contracts state that you can't let someone else live there, paying or non-paying," said Even. "Even if you're renting out a room, you need the owner's approval." Doing otherwise is illegal.

Likewise for apartment swaps. "If an apartment owner finds his apartment listed on one of these sites, that's grounds for canceling the contract," says Even. These cases don't usually make it into court because owners generally have some form of deposit from their renters; they cash it in and simply find new tenants, he said.

Tellavista explicitly states that anyone listing an apartment needs the legal rights to do so, although Ziv noted that the company does not ask to see actual contracts. Liron said that she received her landlord's blessing when she wanted to rent out her apartment when she and her boyfriend flew to India for three months. Not only that, he suggested that they charge more than the NIS 5,000 a month that they were paying him, she added. "For NIS 15,000 we can live like kings in India," she said.