A promise of return in real estate is a claim that can be verified: who is committing, from what they will pay, what is written in the contract, and what is the net income after all expenses. There are no Livo returns here, and the page is based on public publications only.
Why does a guaranteed return require verification?
A JDN article from 30.4.2026 defines companies that commit to "guaranteed returns" as a "blazing red flag." According to the author, when a company promises a return, the promise may already be embedded in the purchase price. This is one author's opinion and not a general statement, so the offer itself should be checked.
Calcalist reported on 4.5.2014 about a Securities Authority investigation into funds that offered guaranteed returns. An investment manager at a pension fund said in the article: "When you are offered an annual return of 10% with minimal risk, several red flags should go up." The article is 12 years old and refers to funds, so it demonstrates a warning sign and is not a description of the Eilat real estate market today.
How to check a guaranteed return, step by step?
The check begins with what exactly is promised and in writing. A list:
- What is promised. A percentage, a fixed monthly amount, or an estimate. An estimate is not a commitment.
- Who is committing and from what. A company, property owner, or operator, and from what the amount will be paid if the property is empty. Check what happens if they stop paying. See also hotel vacation units.
- Gross or net. Net return is measured after management, arnona (municipal tax), insurance, and maintenance. JDN gives an example of 12% on paper that dropped to about 4% to 5% after expenses. For Eilat data, see returns from a vacation apartment in Eilat.
- Calculation assumptions. Occupancy and price per night by season. See seasonal occupancy.
- Ownership. According to JDN, verify that the property is registered in your name in the Tabu (land registry) and not in the name of the management company.
- Management and commissions. Can the management company be changed and what are the commissions. See vacation apartment management.
- Purchase price. Compare to published prices, as a guaranteed return may be embedded in the price. See price per square meter in Eilat.
- Permit and regulations. That short-term rental is permitted for the property. See what to check before buying.
- Source of reports. According to JDN, do not rely on reports from those who profit from the deal, and ask to speak with real clients, not sample clients.
- Consultation. A lawyer to read the contract and an accountant to check the tax.
What does the law say about presenting returns?
Section 2(a) of the Consumer Protection Law, as worded in Wikisource, prohibits a dealer from doing anything, by act or omission, in writing or orally, "that is likely to mislead a consumer in any material matter in the transaction." If you feel that the presentation of a return was misleading, consult a lawyer. What constitutes misleading in a particular offer is determined by its circumstances.
How can Livo help?
Livo does not guarantee returns and does not provide investment advice. Anyone looking for an income-generating property can leave their details on the income-generating properties in Eilat page, and a licensed Livo broker will contact them and help locate a suitable property, without any commitment to the outcome. To see what renting to vacationers looks like from the guests' perspective, check out villas in Eilat.
The information on this page is general, based on public publications cited alongside it, and is not investment advice, tax advice, or legal advice. Livo does not guarantee any returns. Before any transaction, it is recommended to consult with a lawyer and an accountant.
FAQ
Is a guaranteed return in real estate a warning sign?
According to a JDN article from 30.4.2026, companies that commit to guaranteed returns are a blazing red flag, because the commitment may be embedded in the purchase price. This is one author's opinion, so the offer itself should be checked: who pays, from what, and what happens if they stop.
What is the difference between gross and net return?
Gross return is income before expenses. Net is measured after management, arnona (municipal tax), insurance, and maintenance. The JDN article from 30.4.2026 includes an example of a 12% on-paper return that dropped to about 4% to 5% after expenses. This is an example from the article and not data specific to Eilat.
What should be checked before believing a return calculation?
Request the calculation in writing with all assumptions: occupancy, price per night, commissions, management, and expenses, and check it against published market data. Do not rely solely on reports from those who profit from the deal.
Does Livo guarantee returns?
No. Livo does not guarantee returns and does not provide investment advice. You can leave your details on the income-generating properties in Eilat page, and a licensed Livo broker will contact you.
עודכן לאחרונה: 30 באוקטובר 2026