The Advantages of single-unit Japanese Real Estate for Foreigners
It is possible to start investing in low-risk real estate. However, this is generally applicable to beginners, or for those who own 10 or more properties. There is a possibility that those who purchase whole buildings as opposed to single-unit buildings will also earn an advantage.
For example, if you plan to purchase a whole building in Tokyo, the purchase price will most definitely exceed over 100 million yen. However, you can purchase a single-unit property starting from around 10 million yen.
There are also plenty of single-unit properties compared to whole buildings available for purchase; you can lower various risks such as vacancies, declining rent, etc. by choosing a good location from the large pool of available properties.
Also, if you have multiple properties in different places, you can reduce the risk you are taking on through diversification. A single-unit property will allow you to save on repair costs and calculate future earnings with less complication as well. However, if the investment amount is small, naturally, the income-gain will be decreased, so purchasing whole buildings for investors with previous real estate experience is recommended.
Concerns Foreigners have About the Japanese Real Estate Market
There are many concerns from foreign investors about eviction and delinquency of rent. Practices concerning evictions and delinquency of rent are very different in Japan compared to other countries. Overseas, you will receive litigation and collection right away if you do not pay rent, but in Japan, you will not be kicked out so easily even if you do not pay your rent on time. In Japan, if the lessee disappears and leaves any belongings, the landlord can not throw away the items because the lessee has partial ownership.
Protection measures for lessees are quite active in Japan, and it can be difficult for some foreigners to grasp the lessee and landlord relationship in Japan.
Can Foreigners without Permanent Residency Get Local Financing for an Investment Property?
Yes, it is possible. Several financial institutions offer loans to those who do not have permanent resident status. However, if you do not have permanent residency rights, the examination criteria for loans tend to be highly strict. Or a loan amount may be surprisingly low while the burden on cash increases heavily.
The recent trend has shifted due to the growing globalization of Japan, where many financial institutions have begun to respond to foreign languages and begun to develop services for overseas investors and buyers.
My company LINC specializes in activities utilizing the sales route to foreigners as a real estate agent specialized for foreigners. When you want to assess your precious property, please ask our agent.
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