A Guide to the Short-Term & Vacation Rental Market in Israel

The short-term rental (STR) market in Israel, popularized by platforms like Airbnb and Booking.com, is a major segment of both the tourism and real estate investment landscapes.

For Travelers:

Benefits: More space, privacy, and amenities (like a kitchen) compared to a hotel room. It offers a more authentic, local experience.
Popular Locations:
- Tel Aviv: Beachfront areas, Neve Tzedek, Florentin, and the area around Rothschild Blvd are hotspots.
- Jerusalem: Near the Old City, Rehavia, Nachlaot, and the German Colony.
- Eilat: The number one destination for vacation villas and apartments, especially those with pools.
- The North: Tzfat (Safed) and Rosh Pina for rustic, charming “zimmers” (B&Bs).

For Real Estate Investors:

High Income Potential: STRs can generate significantly higher revenue than a standard long-term lease, particularly in prime tourist locations. The daily rates during holidays and summer can be very high.
Key Success Factors:
- Location: Must be in a high-demand tourist area. Proximity to the beach, historic sites, or major attractions is crucial.
- Property Condition: The apartment must be clean, modern, well-maintained, and stylishly furnished. Professional photos are essential.
- Management: Owning an STR requires active management—handling bookings, check-ins, cleaning, and maintenance. Many owners use professional management companies for a percentage of the revenue.
Regulatory Considerations:
- Municipal Taxes (Arnona): Some municipalities, like Tel Aviv, may charge higher commercial Arnona rates for properties used primarily for STRs.
- Building Regulations: Be aware of the building committee’s (Va’ad Bayit) rules regarding short-term rentals.
- Taxation: Income from STRs is taxable and must be reported to the Israeli Tax Authority.

Investing in a property specifically for short-term rentals can be a very profitable venture, but it requires careful research and planning. Our experts can help you identify properties in high-demand areas with the greatest potential for STR success.