Investing in Japan?

Hi Jambv

I do not know much about Japan however, I do know they went into a recession years ago and are just climbing out of it.

Predications are that property prices will climb in the next few years..

I guess when investing overseas, the thing you have to pay particular attention to is the politics…. and how they feel about foreign investors ect.  As far as I know they are foreign investor friendly but make sure you do your research.

There is no point having a cashflow property with a mortgage on it that the government could cease and you have nothing.   I would not think Japan is like this but something to look into before investing into any overseas country.

Check out all the usualy stuff, vacancy rates, property management ect.

Good luck!!

I think the chances of making money in Japan are very good. However I do not know a great deal abut it. I know that prices and equal to 1980s prices their,

I recently read that to maintain the Japanese economy they need 600,000 foreign workers where today they only have around 60,000.

I had a look at that link, http://foreclosedjapan.com/openrealty/index.php?action=listingview&listingID=1044

This property is in Aichi which is a small country province. Looking at the map it is not even close to the city either. Country towns have lower population growth than the rest of Japan, Which is declining, because many young people go live in Tokyo or Osaka.

The rent seems to be pretty high too.

There are plenty of cheap places on the site though. Some as cheap as $10,000AUD.

Can you recommend anyone Nigel?  I have been looking at foreclosures in the states and can see there may be lots of opportunities there… and even more to come with a recession on the cards 

Companies like MFS specialise in Japanese ski investments (they own Mt Hotham & Falls Creek in Vic as well as a range of other leisure oriented properties) – good rentals but seasonal, prices have increased/yields decreased over the last few years however skiers other than Aussies are discovering the beauty of the Japanese slopes – snow reliability is very high, their weather comes off from Siberia aparently and produces some of the best snow in the world coupled with decent mountains. Resort facilities still have some way to go however.

How can you get a loan for a US property from a US lender if you live in Aus, Nigel?

Or, do the investors obtain loans from Aus lenders for o/seas properties? Which lenders do that? Not many I'll bet; care to comment; any of the MB's on the forum?

Not that I want to do it; just curious.

Because we have been here for over 2 years, no debts, own everything, income of over $90k per year, and because we have no debt, we have no credit score. Have been with the same bank the whole time, and even they won't give us a credit card (we don't want one, but we applied just to see what they'd say). Threy would, however, give us a "secured" credit card. In other words, a debit card that needs funds in it, but the spending is treated like a credit card so you can get a credit score. Yeah.

We can't even get a department store credit card (don't want one of those either, but recently I bought a new jumper, and the check-out person said if I signed up for their store card I'd get another 40% off the price. I thought; what the hell; let's do it. I was knocked back in 2 mins by the voice on the phone from upstairs when the check-out person made the enquiry for sign-up.

No explanation, but I did get a letter in the mail from the store a week later saying I didn't have a good enough credit score to qualify for the card. read: NO credit score).

Good luck getting a housing loan.

I appreciate that Scott,

but I want you or Nigel, or anyone, to tell us how to get around the problem of obtaining finance to invest there, as the question gets raised by peope here fairly regularly.

Nigel is always saying "come on in; the water is fine" but, you have to get the money first, and from my limited experience, it doesn't seem that easy, and I reckon it's misleading people.

I think if people are gunna spruik on about the US, they need to also put forward a footnote about the finance hoops that need to be jumped through as well.

JAMBV,

As Terry said the market in Japan is very different to OZ.

There are quite a few good bargains but getting a good property manager can be extremely difficult.
The real estate agent holds power over both land lord and tenant.
It is very difficult to negotiate rent rise or increases. (I lived in a place that has had the same rent for 25 years).
It is not uncommon for a tenant to have to pay up to 10 months bond which is broken up into 1 month present money for land lord and 1 month present money for agent, 5 months is kept for who knows what and they may get the rest back if the place is spotless.

In regards to investment properties.

An example of a property I'm currently looking at in Japan which will cost around 150K not sure of the age of the building.

It has 8 x 2 BR that should rent for around $400 per month each giving a combined $3200 per month.

The property should depreciate at around 2-3% per year until it reaches a base figure and shouldn't go down any further.

The key factor is whether the loan will be in Yen or AUD or no loan at all.

I will let or the number crunchers out there work out the best scenario and if it's worth doing.

Hi Terry,

Long time no chat.
I'm more incline to pay cash.
Land is probably around 75K which should put bottom base price around 100K after about 20 years of depreciation.

Eventually will keep one apartment vacant for rellies & and ourselves etc when we want to visit Japan.
BTW expecting the first bub in about 3 weeks.

Cheers

C2

Hi C2

Hisashiburi.

The return seems good, but at the end of the day you will be left with a depreciating asset, and have you factored all the taxes in? ANd considered the other opportunities you could be pursuing in Australia. Cashflow won't make you rick, capital gains will. (I had  a client today who sold his property for more than 4 times what he paid for in in just 4 years!).

Congratulations on the baby too.