Level 3

Does Japanese real estate decrease in value? Well, it’s complicated. Some parts of Japanese real estate are likely to decrease in value, while others are likely to increase. Furthermore, the statement “Japanese real estate decreases in value” is a loaded one. It assumes that in other popular investment destinations, real estate doesn’t (or won’t in [...]

Click here to Take Me Back To Part One to find out how the system works...     Previously, we learned that by law, those who live and work in Japan must join government insurance schemes. Most employees get ”Social Insurance”, which includes Health Insurance and Pension. Social Insurance is a fixed percentage and comes [...]

By law in Japan every person must pay into the government health insurance and pension scheme unless exempted. These are arguably large financial obligations. They cost a typical worker hundreds of thousands of yen per year, and the premiums are increasing. During Fiscal Years 2013-2017, premiums for Social Insurance (including health care and pension) increased, [...]

Take Me Back To "Things To Avoid In Japanese Real Estate, Part I".   A Floorplan That Is Odd or Unusual Not every home is rectangular. Some have “eccentric” designers who design them to look like a shuriken, a sausage, or an eyeball. Are the toilets, or is the kitchen, in a disconcerting place? Are [...]

Japanese real estate can be very lucrative. For example, take the current average return on investment (ROI) in the 23 Special Wards of Tokyo. Using this average ROI, for every $100,000 you invest, you’ll get $5,500 per year in passive income. This number goes up to $6,500 in the outlying areas of Tokyo. It soars [...]

What exactly are owners’ associations and management companies? When you buy a house things are simple. The building and the land are yours to do with as you please. However, when you buy a unit in a building, things get more complicated. If buying a unit in a larger building, you decide what to do [...]

Owning a house can be different from owning an apartment because apartments always have common areas. Common areas often include hallways, stairs, a laundry area, a front entrance, gardens, parking, etc. These common areas belong to all the unit owners collectively. Managing these common areas is the responsibility of the whole community, not just any [...]

You might think: “To make and maximise a property listing isn’t my job. It’s my real estate agent’s job”. In Japan, recruitment of tenants is the job of real estate agents, property managers, etc., after all. They are responsible for creating the listings that go on popular websites such as “at home”, “Suumo,” and “LIFULL [...]

The Japanese tax system allows taxpayers to reduce their taxes with deductions. This allows them to save more money for the things that matter. For example, imagine that your income is ¥10,000,000 (the 33% tax bracket). Normally, with no deductions, if you make ¥10,000, you will pay ¥3,300 tax on it:   ¥10,000 × 33% [...]

As a landlord, there might be a time when you want to, or have to, discontinue (i.e. not renew or cancel) a tenant's lease. It could either be non-renewal or cancellation. For example, maybe real estate prices have surged recently. Perhaps you want to take advantage of the current market and sell the property at [...]

Imagine that you have just bought investment real estate, a condominium, in Ginza. The condo looks down on the beautiful Imperial Palace, built in the 17th century, and there are parks and East Higashi-Gyoen Garden nearby. This area is prime real estate, so you know that, once tenanted, the condo will rent for an astronomical [...]

If done properly, becoming a landlord can be your ticket to financial independence. When you accumulate enough properties and populate them with tenants, with such a large passive income, you will no longer need to toil away at a day job. Then you can enjoy life on your own terms. However, not everyone makes a [...]

Imagine owning a luxury apartment for expats in Roppongi. You paid ¥100 million for it. Four years later, it has appreciated to ¥110 million thanks to higher demand (a foreign expat surge) and Tokyo’s rising land prices. You decide to sell, figuring on a ¥10 million profit. That’ll fund a nice Christmas vacation with your [...]

A famous idiom goes “If it isn’t broke, don’t fix it”. To apply this to real estate, if you have a tenant who is paying rent, then the property is just fine and does not require you to have someone refurbish it. However, if the real estate is vacant, or the only way you have [...]

Tax is a part of making money. The following is a list of taxes that you will incur as a real estate investor in Japan when buying, selling and owning Japanese real estate. Taxes When Acquiring Real Estate In Japan Anyone who makes money will have to pay taxes; as Oliver Wendell Holmes, Jr. once [...]

Investors have a number of ways to help them measure the value and profitability of rental income property. The most popular metric for investors is the capitalisation rate, or cap rate. The cap rate in real estate is simply the yield, or rate of return, on a property. The cap rate is calculated by dividing [...]

So, you are trying to get a loan from a Japanese bank to invest in Japanese real estate. The road ahead of you is not without its potholes and sharp turns, but with some grit and determination you will be able to navigate all of the paperwork and ultimately get access to the bank's money, [...]

One of the fundamental differences between buying a home, and investing in real estate, is who pays the mortgage. In Japan because interest rates are low, the differential between a residential mortgage and an investment mortgage may only be 1%. Given that the residential mortgage is invariably the cheaper of the two, you could be [...]

For the most part, life as we know it works on the pay-to-play system. No money, no honey. To own a one million dollar house, you will have to have one million dollars to spend. Or maybe not. We all know of at least one place that a mouse can get free cheese. Loans From [...]