I've begun to question whether my investments are disadvantaging locals in any way. I don't have any real estate in Japan but I found the farmhouses there very beautiful. And looking at the price of houses from your newsletter they look affordable to me working an entry level job in Canada. But I don't want to be disadvantaging locals/ destroying local communities. In your experience - do you see any ways in which that happens - buying real estate as a foreigner?
Really depends on your intentions. If you buy a property in rural Japan (which thanks to Japan's amazing train network can be as little as 1h from a major city), even if it's for investment purposes, I think you would do a huge service to the community. Many municipalities are experiencing serious population decline and don't have enough tax revenues to pay for public services. If you live the property, or even intend to rent it out, you'll pay taxes to the community and bring in more business.
Even investments in major tourist spots or cities can be good for the locals. For example, Chinese and Australian real estate developers have poured in money in many Japanese skii destinations (most notably Niseko) and invested massively in new skii resorts, hotels etc. Sure, it raised prices for the locals, but created many new jobs and other wealth in the process.
Real estate investments that hurt the locals are the ones that are used as a vehicle to park your money in. These investment are often focused on buying plots of land that are not utilized at all as properties depreciate in value rather quickly here. It basically creates an artifical shortage of land and houses and raises the prices on the rest of the housing stock... We're seeing a lot of this in cities like Hong Kong, London and New York, and it's one of the biggest reasons to why property prices there are so astronomically high.
Thank you so much for giving us with Konichi-valuable information!! I cannot wait to hear what arguments there are against investing in dirt cheap Japanese real estate!
But is not it too hard to find tenants in Japan unless you are in super popular area? This is what I hear from my friends in Japan. Vacancies are high. In Sydney near the beach I never had vacancy more than a month for 20 years …
Thank you for the comment! You are a 100% correct, which is why prices in less popular sites are extremely cheap in global standards. However, many of these places were blowing up with tourism right until covid hit. I have a friend who will move to Shirahama in Wakayama, a beautiful beach town around 1:30h from Osaka. He bought a 20 year old house with 2 beedroms, a living room and kitchen for around $80,000. Sure, even when tourism bounces back, it will likely be hard to rent out the place all year round, but with that price, imagine how few days a year you'd have to rent it out to break even on the property cost + maintenance.
Hello! Very informative article! Thanks you for gathering this info... I have always been interested in the opportunity of investing in the Japan real state market, couple of questions.
First Question: Once you own something as a foreigner can you rent the property? from what i know you gotta go through a lot of loops when you want to stablish a business in japan, is this the same scenario?
Second Question: What companies or where should i look into once I'm ready to start looking for houses or apartments that are foreigner friendly? Or what is are the best website you would go to start looking for places?
I've begun to question whether my investments are disadvantaging locals in any way. I don't have any real estate in Japan but I found the farmhouses there very beautiful. And looking at the price of houses from your newsletter they look affordable to me working an entry level job in Canada. But I don't want to be disadvantaging locals/ destroying local communities. In your experience - do you see any ways in which that happens - buying real estate as a foreigner?
Really depends on your intentions. If you buy a property in rural Japan (which thanks to Japan's amazing train network can be as little as 1h from a major city), even if it's for investment purposes, I think you would do a huge service to the community. Many municipalities are experiencing serious population decline and don't have enough tax revenues to pay for public services. If you live the property, or even intend to rent it out, you'll pay taxes to the community and bring in more business.
Even investments in major tourist spots or cities can be good for the locals. For example, Chinese and Australian real estate developers have poured in money in many Japanese skii destinations (most notably Niseko) and invested massively in new skii resorts, hotels etc. Sure, it raised prices for the locals, but created many new jobs and other wealth in the process.
Real estate investments that hurt the locals are the ones that are used as a vehicle to park your money in. These investment are often focused on buying plots of land that are not utilized at all as properties depreciate in value rather quickly here. It basically creates an artifical shortage of land and houses and raises the prices on the rest of the housing stock... We're seeing a lot of this in cities like Hong Kong, London and New York, and it's one of the biggest reasons to why property prices there are so astronomically high.
Thank you so much for giving us with Konichi-valuable information!! I cannot wait to hear what arguments there are against investing in dirt cheap Japanese real estate!
Yes, please wait until next week before you buy a house in Japan!
But is not it too hard to find tenants in Japan unless you are in super popular area? This is what I hear from my friends in Japan. Vacancies are high. In Sydney near the beach I never had vacancy more than a month for 20 years …
Thank you for the comment! You are a 100% correct, which is why prices in less popular sites are extremely cheap in global standards. However, many of these places were blowing up with tourism right until covid hit. I have a friend who will move to Shirahama in Wakayama, a beautiful beach town around 1:30h from Osaka. He bought a 20 year old house with 2 beedroms, a living room and kitchen for around $80,000. Sure, even when tourism bounces back, it will likely be hard to rent out the place all year round, but with that price, imagine how few days a year you'd have to rent it out to break even on the property cost + maintenance.
Hello! Very informative article! Thanks you for gathering this info... I have always been interested in the opportunity of investing in the Japan real state market, couple of questions.
First Question: Once you own something as a foreigner can you rent the property? from what i know you gotta go through a lot of loops when you want to stablish a business in japan, is this the same scenario?
Second Question: What companies or where should i look into once I'm ready to start looking for houses or apartments that are foreigner friendly? Or what is are the best website you would go to start looking for places?
Thank you!