HOW TO PURCHASE AND MANAGE AN INVESTMENT PROPERTY IN JAPAN PRITI DONNELLY
Find a Local Proxy/Agent
The first step is to find a local bilingual (JapaneseEnglish)
proxy/agent who will help you familiarize yourself with the
property market. Look for someone who is available to you,
communicates well and who can provide you with
information in a timely fashion. Consider your proxy as an
extension of yourself. Expect transparency about their
services, keeping you informed at all stages of the
purchase process and clearly explaining the management
process. Don’t hesitate to ask for client references.
1981, have been retrofitted to bring them up to code. Next,
Familiarize Yourself with the Market
you may have a certain size and features in mind – one
room with a living room, kitchen and dining room, close to a
There is no need to travel to Japan to scout the area,
train station is ideal for a student, single or elderly person.
unless you want to. Your experienced and trusted proxy will
Two or more rooms could suit a family. Of course, your
work with you to familiarize yourself with the market. They
budget and yield are naturally of significance.
should have strong knowledge of locations, in particular,
areas with population growth to ensure tenant demand.
Analyze the Numbers
Ask about properties close to shopping districts, schools
and hospitals where tenant demand would be higher.
Once you have a good idea of the features you have
Another factor to consider is the age of buildings. In 1981,
in mind, your proxy will send you analyses of
the building standards act changed their policies to ensure
properties to suit your criteria and break down the
earthquake resistant construction methods. This is the
numbers (price, costs, yield, etc.) For example, with
turning point that some buyers look to when purchasing an
the exception of Tokyo, investment properties across
apartment, although many older buildings built prior to
Japan range from $40K to $60K at 6% to 12% yield.
In the center of big cities, or first tier cities
such as Fukuoka and Nagoya you can
expect a yield of 6% to 8%. In second tier
cities such as metropolitan Sapporo, you
will find properties with a yield of 9% to
10%. In the third tier are smaller
townships, albeit with good profiles, 10%
to 12%, all net pretax. With an occupancy
rate of 93% to 94% in these areas, you will
generate immediate income of $250 to
$400 a month, on average.