The apartment is sitting empty? This is how incorrect pricing harms your yield in Tel Aviv

The real estate market in Tel Aviv is one of the most dynamic and sought-after in Israel, and sometimes it seems like “every broom shoots” and every apartment is snatched up at any price. However, as those who live the field at NADLANSKY and accompany dozens of apartment owners, we often encounter property owners who make one critical mistake: Overpricing.

The desire to maximize profits is natural and understandable, but when looking at the dry data and the bottom line in the bank, it turns out that sometimes it is precisely the high price that causes the biggest cumulative loss.

The “Empty Month” Trap: The Mathematics That Doesn’t Lie
Let’s break this down into real numbers. Assume you own a 3-room apartment in South Tel Aviv.

• The real market price: 8,000 ILS per month.

• The price you are asking: 8,500 ILS per month.

You insist on the additional 500 ILS. Meanwhile, the apartment sits empty for one extra month while you screen tenants or wait for someone to agree to pay. The meaning: You lost 8,000 ILS in income in the first month. To recoup this loss with the 500 ILS addition, you will need the tenant to stay in the apartment for 16 consecutive months just to reach the break-even point. If the tenant leaves after a year, you will have lost money, even though “on paper” you received a higher price.

2.The Economic Risk of the Wrong Tenant
Fair and accurate pricing does something else: it automatically screens out a certain type of population and attracts high-quality, stable tenants. Good tenants, who are looking for stability for years, know the market prices. When they see an overpriced apartment, they skip it. Who is left? Often these are tenants who are under pressure, or those who have no choice, which increases the risk of:

• Difficulties in collecting rent.

• Accelerated wear and tear on the property.

• High turnover (which again entails brokerage fees, painting, and repairs).

3.The “Burnt Listing” Effect
In advertising systems and classified boards, a listing that stays online for a long time raises suspicion. Potential tenants ask themselves: “Why hasn’t anyone rented this apartment for two months already?” As time passes, your bargaining power decreases, and eventually, you might have to compromise on a price even lower than the original market price.

How do we at NADLANSKY help you? Our expertise lies in surgical market analysis. We check the actual rental price of similar apartments (not the advertised price, but the price they were closed at) in the South Tel Aviv and Center area. Our goal is not just to find a tenant, but to find the right tenant at the right price, while maintaining fairness that will ensure your peace of mind.

Legal Disclaimer: The information in this article is provided for general knowledge only and does not constitute legal, financial, or appraisal advice. The data and examples presented are for illustrative purposes only. Any action taken based on the information in the article is the sole responsibility of the reader. It is recommended to consult with professionals before executing any real estate transaction.