Since Japan’s asset bubble 30 years ago Japanese building values have been stagnant, however those days are over and Sapporo has been named as the City with the highest yearly real estate appreciation for 2021 and 2022, further to that Sapporo enjoys the highest ROI on real estate property in Japan.
Having seen crypto fortunes vanish in a puff of digital ink, the question of “what is a solid and real investment?” comes to mind. The stock market can generate wealth till the next crash. Crypto is like a game of musical chairs, except the last chair explodes. Then there is real estate. Unlike other investments which are essentially just pixels on a screen, real estate has value because it is a physical thing. It will always be there. Historically, you will find that all lasting intergenerational wealth is backed by real estate.
Rental Properties in Japan
Buying rental properties in Japan is a very effective way to invest in real estate and immediately start generating a cash flow. There is no waiting, the existing rental income gets directed to your bank account from the day of title transfer. There are rental properties to fit all budgets and competent property management companies to keep the rooms full, the lights on and income flowing.
Since Japan’s asset bubble 30 years ago Japanese building values have been stagnant, however those days are over and Sapporo has been named as the City with the highest yearly real estate appreciation for 2021 and 2022, further to that Sapporo enjoys the highest ROI on real estate property in Japan. Many retirement age Japanese have discovered that they can enjoy a much nicer life with a bigger home for less money than they can in the Tokyo area and escape the oppressive heat of a Tokyo summer.
Japanese buildings value is generally based on what ROI they produce. As it should be. It is a business and business values should be based on the wealth they generate. So where are the opportunities for profit. Firstly, you are buying an immediate real estate backed cash flow well above bank interest rates. Secondly, if you have a real estate asset generating, for example, a reliable 8% return, you can sell it as a reliable 6% return and book your appreciation at 25% all the while enjoying reliable yearly appreciation on top of that.
Japan’s real estate market has remained free of the wild speculation happening in other countries. Many financial advisors point out that renting in some cities in California is your best option because the rental payment is half the mortgage payment on the assessed value of the building. What does that say about long term sustainability? Wild price increases are generally a function of investment capital looking for a place to call home. We believe, and it is coming true, that some big Capital firms are looking to Japan as the next big thing.
What is best for me?
We recommend the hands-off investor look at low maintenance, reenforced concrete buildings under 25 years old. These are built to Japanese earthquake resistance standards. These buildings are strong, and there is every possibility to believe these structures will outlast the Pyramids. We recommend buildings containing 1 or 2LDK (1 or 2 bedroom) units. These have a higher turnover rate but are easily filled with less demanding younger renters.
You do not need to reside in Japan or have a visa for Japan to own apartment buildings in Japan. You can register it to an individual at a foreign address or a foreign company.
Japan has very reasonable taxes for landlords. There are no specifically punitive measures toward foreign ownership. For example, Canada added a 20% ‘foreign owners’ tax and then banned foreign ownership outright. Japan welcomes foreign ownership with open arms / bureaucratic indifference.
Call for more information to get in early on this next great opportunity. H2 CIRE has access to hundreds of rental properties that are not on our website. Contact us directly and we will find a rental property that will fit your needs.