FOREIGN INVESTORS APPROACH TO REAL ESTATE INVESTING UNDER $50K PRITI DONNELLY
Earthquake Concerns
While the recent earthquakes have not deterred
investors from properties in Japan, we have had
concerns about the effect of earthquakes on
properties. Under a standard policy, earthquake,
tsunami, volcano and flood damages are covered
by insurance policies and insurance is surprisingly
inexpensive, only a few dollars a month. Since the
building itself carries an accumulated funds pool,
any remaining losses not covered by insurance are
generally covered by the pool. As part of the due
diligence process at the time of the purchase, we
check the status of the accumulated funds to
determine whether 100% coverage is necessary.
Selling Your Property
Since the market moves very quickly in Japan, properties are listed only a few days before they are sold.
Therefore, if you decide to sell your property, there is usually a buyer ready to purchase. Keep in mind the tax
implications. A property owner, whether foreign or local, who sells a Japanese property within five years can
expect to pay 40% capital gains tax. After five years, the tax drops to 20%.