Investing in Baku with Leverage — How Israelis Leverage an Existing Property 2026
One question that keeps coming up among investors who already own an apartment in Israel is: can I use the equity I've built up to finance an investment in Baku, without cashing out other savings? The answer is yes — it's an accepted strategy, but it's important to understand in depth how it works and what the risks are before leveraging an existing property for an investment in Azerbaijan.
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Leverage, in this case, means taking out a loan — usually a loan against the existing mortgage (a mortgage refinance) or another type of "reverse mortgage"-style loan, based on the equity built up in the property in Israel — and using that money to finance an investment in Baku, instead of selling existing properties or cashing out savings. This way the investor keeps the Israeli property and adds another property in Azerbaijan, while the loan is later covered by ongoing repayments.
How Israelis actually leverage their home for the investment
The most common way is approaching the mortgage bank with a request to refinance or increase the existing mortgage, based on the equity built up in the property. The additional loan amount is intended for the investment in Baku — usually for purchasing one property or making the first payment in a payment plan. It's important to plan the new monthly repayment in advance, and make sure it doesn't hurt the family's overall repayment capacity.
The advantages of this strategy
The main advantage is that the investor doesn't have to "wait" until they've accumulated separate liquid cash — they use equity that already exists in an older property and generate an additional property from it. In the best case, if the investment in Azerbaijan keeps appreciating at a pace similar to the trend recorded (about 14%-15% in 2024 according to ABB Bank), the return on the new property can significantly exceed the financing cost of the loan.
The risks you must consider before leveraging
Leverage is a double-edged sword: if the value of the property in Baku doesn't rise as expected, or if there's a delay in the project (mainly relevant to off-plan projects), the investor still has to repay the loan against the property in Israel — regardless of how the new investment performs. It's also important to factor in currency risk and variable interest on the loan itself, and to plan for a conservative scenario, not just an optimistic one.
When leverage isn't suitable
Leverage isn't suitable for someone who doesn't have a safety reserve for the monthly repayment in case of a more difficult financial period, and also not for someone who wants to invest an amount that constitutes too significant a share of the total equity in their Israeli property. The most cautious rule: finance only part of the deal with leverage, and always make sure the monthly repayment stays comfortable, not at the edge of your capacity.
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