Top 5 Reasons Why Real Estate Investors have their Eye on Kumamoto
Affordable HighYield Properties
Where there is a surge of population in a developing area, investors can find affordable, high
yield properties. It’s first come first serve for the rare availability of one room apartment units
(“mansion” in Japan) on the market in Kumamoto. Prices can be as low as 2.4 million to 2.8
million JPY (USD $21K to $25K) at between 7.5% to 9% yield net pretax, approximately USD
$150 to $240 net income per month.
Secure Returns
Governance in Kumamoto supports subsidized employment and volunteer opportunities as well
as rehabilitation and housing services for first offence excons, the destitute and homeless.
Therefore, along with great price and high yield, unlike other parts of Japan, the government
pays rent directly to the landlord. In fact, some realtors and property manager offices specialize
in buying vacant buildings to rent entirely to welfare recipients because of the high and secure
returns.
Occupancy
From our experience we have never had a vacancy longer than two months in this city. Part of
the reason is that properties are generally within ten minutes walking distance to the nearest
train station. By comparison, Sapporo has five to six month vacancies, despite its size, high
returns and white collar industries, and similar vacancies in Nagoya, the industrial powerhouse
city.
Construction Standards
Investors often ask us about the effect of earthquakes in the area. Again, from our personal
experience, on the 14 properties under our management, approximately only USD$500 in
damages and that was to one window frame and some flooding under it. Even if there had been
more damage, investors would have been protected under insurance.