What Is a Deal Evaluation and Why Is It Critical?
Deal evaluation is the structured analysis that helps you decide whether to buy — and at what price. Many buyers skip this stage and make decisions based on gut feeling. This is a costly mistake. A proper analysis will reveal whether the price matches the market, what the expected yield is, and whether there is room to negotiate.
Comparable Transactions (Comps)
The most powerful tool for checking price is comparison with recently closed deals in the market. The Madlan website publishes real transaction data (from the land registry), which can be filtered by neighbourhood, size, floor, and year of construction. Look for 5–10 similar transactions closed within the last 6–12 months, and calculate the average price per square metre. Compare this with the seller's asking price.
If the price is 5%–10% above the average — that is room for negotiation. If it is 20% or more above without explanation — the property may simply be overpriced.
Yield Calculation — The Basis for Everything
Gross yield = (Annual rent ÷ Property price) × 100. Example: An apartment at ₪1,500,000 rented for ₪4,000 per month → 48,000÷1,500,000 × 100 = 3.2% gross yield.
Net yield also accounts for: municipal tax (arnona), building fees, insurance, repairs, average vacancy, and taxes. This typically reduces gross yield by 0.5%–1.5%.
Use our Rental Yield Calculator for a precise calculation.
Appreciation Potential
Beyond rental yield, ask: is the property likely to increase in value? Factors that influence this include: planned development projects in the area, infrastructure improvements, urban renewal (tama 38, evacuation-reconstruction), and general increases in demand for the area. Also note the opposite: construction plans that could harm the view, or increased housing supply in the area that may push prices down.
Early Checks Before Making an Offer
Before making a serious offer, check: are there any debts on the property (existing mortgage, attachments, liens)? What is the status of the land registry registration? Are there any caveats registered? Are there outstanding building committee fees or upcoming major building expenses? Your lawyer will check all of this at the legal stage — but it is better to know in advance.