Anyway I wanted to draw people's attention to the 'other category' of property in the property search tool that accompanies the report. People tend to look just for residential property, but the 'other category' holds some gems because most Japanese buyers don't have a flexible objective in Japan. They just want a home. Japanese buyers, unless they are investors, don't have much flexibility with respect to location. In fact, talking to Japanese investors interested in foreclosed property, I found that they were more interested in buying property close to their home town because it was familiar than something which was going to yield the best return. There is an overarching concern with safety. Not taking too much risk... in fact most prefer to take no risk at all, and of course they content themselves with the 1% return on Postal Savings.
When I was buying foreclosed property in Japan I was quite taken by the opportunities to buy some really cheap property in this 'other category' that seemed to go unnoticed. The attraction was properties like the following:
1. A fairly new (1980s) corporate holiday resort. Such a place would not interest a business today because its a legacy of an era that has long since gone, but the same premises (500m2) would make a wonderful hotel or backpackers. I think setting up a backpackers would be an opportunity that a great many people would be interested in because there are not very many of them in Japan. More commonly called Japanese Guest Houses, they are not very cheap either. I'd be inclined to base such a property around a holiday/sporting area. My idea a few years ago was to establish a chain of such facilities which Western tourists could say at short term. eg. They fly from Denmark to Narita, use their cheap Japan Rail pass to travel around Japan, staying at my chain of holiday inns. Unfortunately that idea died when I broke up with my Japanese girlfriend. Nevermind, plenty of ideas where that one came from. I have a Japanese friend who is the vice-president of a construction company. He has such a holiday house west of Tokyo. Amusingly he would never actually go there. He was the unhealthiest person I've ever met. Over-worked, he eats poorly, goes to a bar most nights, drinks alone, and yet he has this jewel in the forest, and no one to take there.
2. The other opportunity was a love hotel in the south of Hokkaido. I was thinking to convert this old love hotel into single Japanese youth accommodation for the local university. I reckon these youth would have loved the idea of living in this retro love hotel accommodation, with mirrors over the beds.
3. Another opportunity arises for importers and exporters. Japan is a high cost centre for manufacturing, so a lot of products need to be imported. If you are interested in a product, have found a distribution channel for it, then why not buy a foreclosed warehouse and bid for it. You are best looking for one on the edge of a major city after you have established a preferred port of entry. I would think the Nagoya or Mita area makes a lot of sense, but there are other choices.
These are the types of opportunities you will find in this 'other category'.
Andrew Sheldon www.sheldonthinks.com