Tag Archive for Property investment

Is only Tokyo worth investing in Japan ?

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(Fukuoka city: Image was provided by Fukuoka city official site)
As we discussed in the previous post, we always recommend
foreign investors to start looking at Tokyo as the prime location to invest
in properties however, in addition to Tokyo, there are a few big local cities
where attractive investment opportunities exist.
Fukuoka city in Kyushu island is one of them.
Where is Fukuoka city ?
Fukuoka city is one of twelve government-designated cities
(namely large cities) such as Yokohama, Osaka, Nagoya
and has a population of 1.53 million people.(vs. 9.21 million in Tokyo 23 wards)
Here is the latest official forecast of its population and household
in the future announced by the Fukuoka city official.

(Please click the image to enlarge)
Its population will increase until 2035 and
notably the number of household (another important indicator for real estate
investing) will continue to grow until 2040 (or possibly beyond)
In Japanese real estate investing, the population matters so their
future is very bright.
Its gross population is ranked 5th in the government-designated cities.
In terms of population increase and population growth rate,
Fukuoka city tops in twelve cities.
From the global perspective, in ‘Livability ranking’ published by
MONOCLE magazine in London, Fukuoka city is ranked
14th in the world.Read more

How is the institutional investor looking upon the Japanese market ?

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Many foreign investors may be hesitant to buy real estate in Japan where the declining birthrate
and the aging population are progressing. Compared with the emerging
Asian market such as  Thailand and Vietnam,in terms of the macro view, you could be right.
However it is also true that real estate investment should be aimed at
generating stable earnings from a long-term perspective.
It is said that the stability and transparency of the Japanese market is
very attractive for foreign investors.
I mean the market growth is not everything.
Today we will discuss the strategy of a major Japanese real estate
corporation, Mitsui Fudonsan that can be a good measuring instrument to assess the real estate market in Japan.
Individual investors also can leverage such information and better understand
the market in Japan.

Read more

Where you should buy your house in Tokyo ?

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Do you want to buy a house in Tokyo ? Which area do you want to buy your property  ?
I believe understanding the location is a key to being successful
with buying a house (or apartment).

In Japanese big cities such as greater Tokyo, Osaka, Nagoya,
people do not commute by car but by train or subway.
They get on and off train every single day.
If the number of residents increases, the station nearby flourishes and
the vibrancy is born in the town.
On the other hand, if the number of station users decreases, we could see the
recent issues like “vacant house problem”.
Empty houses problems are even becoming serious  in the area of Denenchofu station, Tokyu Toyoko Line,
which has been admired as said a prestigious residential area.
This is because the wealthy people who live in Denenchofu are moving into
high-rise apartments in the center of Tokyo.
When buying real estate in Tokyo,  it is extremely important to check the trend of
passengers of the nearest station.
Unlike large cities in the US and Europe, there are few business people
who commute to work by car in Tokyo.
The convenience of commuting to work and the convenience of shopping are directly
linked to the value of real estate in Tokyo.
Read more

Acquisition cost: Understanding the tax angles when you buy the property in Japan Part-1

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One of the principal rules of property investment is
that no property should cost more than it produces.
You obviously want to see the positive cash flow every month.
But from the tax management point of view, that is not the case.
When you are filing a tax return in March, you want to appear to be in red or break even.
The Japanese government in fact encourages investors to book the depreciation
that allows you post a deduction for the certain portion of the value of your property.
Tax code in Japan changes very frequently, almost every year.
I strongly advise that you should check with your broker or tax specialist
(tax accountant,  CPA) before you take a significant action.
Tax is the biggest cost in the property investing.
Tax management therefore is a key for successful real estate investors.
Today I am going to discuss the taxes that investors need to pay when they
buy the real estate in Japan.
The following discussion is based on the tax laws which are applicable
as of end 2017.Read more

How is Japan population evolving in terms of the real estate investment ? – Intra migration dynamics-

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Overall, Japan looks to be shrinking but big cities are expanding.
How does it have an implication on the real estate in Japan.
I have been hearing a question repeatedly from a number of my
foreign friends (and Japanese friends, too), that is “Why do you
want to invest in the property in a country where the
population is decreasing ?”
It is very true that overall Japan is shrinking but when it comes to the real
estate investment such naive macro view could mislead your decision.
The population growth is one of the biggest factors in the property
investment in deed and a growing population should give you the opportunity
to raise rents over time and also should enhance values of your property.
However you need to see the numbers in depth.
The Japanese Government recently announced the official intra
population movement report(statistics of intra-prefecture migration)
in 2017.
Based on the investors view, here are your takeaways from the announcement.
1. Tokyo area (greater Tokyo) won’t stop growing
According to the report, the greater Tokyo area (Tokyo, Saitama, Chiba, Kanagawa)
was in “net surplus” in which the number of the net inflows stands at 117,779.
Net surplus (net increase of the population) in the greater Tokyo area has posted
for 22 consecutive years, net surplus number (growth) has also
increased since 2009.
Looking at the each number of  domestic migration by prefecture in 2017,
only seven prefectures of Tokyo, Chiba, Saitama, Kanagawa, Fukuoka, Aichi
and Osaka are in net surplus. The largest number of net inflow is shown in Tokyo
as prefecture (net 75,598 surplus), followed by 16,303 in Chiba and 10,423 in Saitama.
You can find the stark contrast among the prefectures in the following chart
which was published by Statistics Bureau of ministry of the internal affairs
and communications on January 29, 2018. Read more

Notorious inheritance tax: Is it high ? -Brief on Inheritance tax in Japan as of 2017-

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It comes to my attention that many foreign nationals who live in Japan
permanently or (semi-permamently) are
concerned about Japan’s inheritance tax.
I will give you some good guidance about it as follows.

1) Do we all have to pay
    the inheritance tax ?

There is growing concern about the inheritance tax in Japan. In 2013,
the Japanese government passed the bill and lowered the deductible amount
 for charging the inheritance tax　(hence effectively raised the tax rate).
The new law became effective from 2015.
However one statistics say the currently only
about 8 out 100 taxpayers in Japan are actually imposed the inheritance
tax so majority of usdo not really have to worry about it
unless you are very high net worth investors or entrepreneurs with
the net taxable asset which is well over 100 million yen or so.Read more