We are already in the midst of a stock market recovery lead by resources. I would however caution you that the recovery will be short-lived. So expect higher unemployment to sink market sentiment around Feb. This is therefore a period to trade stocks. The 'buy & hold' strategy I have debunked before, and I caution for the next 4-5 years it will make even less sense as we struggle with falling consumer confidence, rising unemployment, and eventually inflation.
If you are earning money in Japan then the local currency should hold high for the next 3-4 years, giving you enough time to flip a property, or you might like to hang onto it. I recommend flipping it unless you are buying an owner-occupied place of low value in the suburbs with little equity at stake. Otherwise you are better off buying a high yielding rural property in Western markets now, or waiting 6 months to buy one in Western cities.
Much depends on your personal context. e.g. Your career & lifestyle flexibility, your debt funding capacity, your job, whether you have a Japanese partner, how long you want to live in Japan, where would you otherwise live, whether you intend to live there long term, don't mind fixing them up (basic work), or coming back to perform routine maintenance. Its a trade off between yield income (in suburbs) or capital growth income (in the cities). For the next few years its better to go for yield. A big issue will be whether you can get bank finance. Having a Japanese partner will make all the difference, particularly if she works full time, but also because she is tied to you.
You need to make a choice between buying in the city and suburban area. I would avoid the apartment idea because you pay a lot of management fees on them. in Japan, and there is an endless supply of skyline given that the size and expansive nature of Tokyo's rail infrastructure. This makes other satellite cities better buying. Places like Mito, close to the airport, as they have lifestyle benefits, and increasingly we are working from home. You are positioning yourself for a paradigm shift, and you will more likely find a foreclosed bargain in Mito.
It makes sense to buy something in the suburbs if you intend it to be an investment, so you will get better yields by buying outside of Tokyo City wards. Further out, there is less bidding competition. Its the same further away from the station - less competition. Japanese buyers dominate the foreclosed market so we need to understand what they want to maximise our bidding success and efficacy. I look for properties which put off Japanese buyers prepared to pay a premium. focus on those where only 1-3 bidders. If you buy land value, then of course you avoid management fees. There is also greater appreciation from houses because land doesn't depreciation like buildings, but aprtments do have strategic value, but its already been priced into the property, so less gain for you. And you carry the large cost of the management fee, which is like a tax. Target 10-15yo buildings as they are cheaper, yet far from demolition. I bought one with my partner in a scenic valley outside Tokyo (Tokigawa in Saitama) for instance, but it maybe too far for you if you are living in Tokyo. Look at the smaller cities as well, and try to make it flexible, so that you might envisage living in it.
If you are planning to go back to UK, or migrate somewhere like Aust or NZ, then city properties in those countries will make sense in about 6mths, in which case you might want to hold off. The currencies for AUD, NZD will likely come off again, so good entries into these markets, whether to live or invest, the opportunity to trade the currency as well because they are off-bottoms. Depends where you see yourself being in a few years, and what doing, your flexibility now.
Agents are after rentals - true - but only ones not requiring too much work, and only those within 1-3km from the station. Find another selling point such as 'scenic location' or close to school. In rural areas, living near station is less important as they depend on cars. I like centres like Ranzen, Saitama. It has a shopping centre and Cainz home centre, so great convenience for fixing up. Great for renters as well, as more than likely the renter will work locally and not in Tokyo, so they will drive to work. In rural areas they don't need to buy a car space so you are helping them save money. Your target is older people who don't drink or families with kids over 10yo. Japanese kids tend to be well-socialised, to the point of docility. If you can get near a future train station, all the better.
If you decide to wait, stocks will likely have a post-Xmas rally. In fact its already started with resource stocks, so I'd go for another sector which has yet to recover. Look at the sector indices in your country, but only trade them as they will fall back to lows, which suits you buying property. But you are best off buying property now in Japan; in 6mths elsewhere, unless you buy in rural areas overseas then now is good too, particularly if you can optimise the forex benefit. For this purpose I recommend learning to read charts.
------------------------------------------------
Andrew Sheldon www.sheldonthinks.com
If you are earning money in Japan then the local currency should hold high for the next 3-4 years, giving you enough time to flip a property, or you might like to hang onto it. I recommend flipping it unless you are buying an owner-occupied place of low value in the suburbs with little equity at stake. Otherwise you are better off buying a high yielding rural property in Western markets now, or waiting 6 months to buy one in Western cities.
Much depends on your personal context. e.g. Your career & lifestyle flexibility, your debt funding capacity, your job, whether you have a Japanese partner, how long you want to live in Japan, where would you otherwise live, whether you intend to live there long term, don't mind fixing them up (basic work), or coming back to perform routine maintenance. Its a trade off between yield income (in suburbs) or capital growth income (in the cities). For the next few years its better to go for yield. A big issue will be whether you can get bank finance. Having a Japanese partner will make all the difference, particularly if she works full time, but also because she is tied to you.
You need to make a choice between buying in the city and suburban area. I would avoid the apartment idea because you pay a lot of management fees on them. in Japan, and there is an endless supply of skyline given that the size and expansive nature of Tokyo's rail infrastructure. This makes other satellite cities better buying. Places like Mito, close to the airport, as they have lifestyle benefits, and increasingly we are working from home. You are positioning yourself for a paradigm shift, and you will more likely find a foreclosed bargain in Mito.
It makes sense to buy something in the suburbs if you intend it to be an investment, so you will get better yields by buying outside of Tokyo City wards. Further out, there is less bidding competition. Its the same further away from the station - less competition. Japanese buyers dominate the foreclosed market so we need to understand what they want to maximise our bidding success and efficacy. I look for properties which put off Japanese buyers prepared to pay a premium. focus on those where only 1-3 bidders. If you buy land value, then of course you avoid management fees. There is also greater appreciation from houses because land doesn't depreciation like buildings, but aprtments do have strategic value, but its already been priced into the property, so less gain for you. And you carry the large cost of the management fee, which is like a tax. Target 10-15yo buildings as they are cheaper, yet far from demolition. I bought one with my partner in a scenic valley outside Tokyo (Tokigawa in Saitama) for instance, but it maybe too far for you if you are living in Tokyo. Look at the smaller cities as well, and try to make it flexible, so that you might envisage living in it.
If you are planning to go back to UK, or migrate somewhere like Aust or NZ, then city properties in those countries will make sense in about 6mths, in which case you might want to hold off. The currencies for AUD, NZD will likely come off again, so good entries into these markets, whether to live or invest, the opportunity to trade the currency as well because they are off-bottoms. Depends where you see yourself being in a few years, and what doing, your flexibility now.
Agents are after rentals - true - but only ones not requiring too much work, and only those within 1-3km from the station. Find another selling point such as 'scenic location' or close to school. In rural areas, living near station is less important as they depend on cars. I like centres like Ranzen, Saitama. It has a shopping centre and Cainz home centre, so great convenience for fixing up. Great for renters as well, as more than likely the renter will work locally and not in Tokyo, so they will drive to work. In rural areas they don't need to buy a car space so you are helping them save money. Your target is older people who don't drink or families with kids over 10yo. Japanese kids tend to be well-socialised, to the point of docility. If you can get near a future train station, all the better.
If you decide to wait, stocks will likely have a post-Xmas rally. In fact its already started with resource stocks, so I'd go for another sector which has yet to recover. Look at the sector indices in your country, but only trade them as they will fall back to lows, which suits you buying property. But you are best off buying property now in Japan; in 6mths elsewhere, unless you buy in rural areas overseas then now is good too, particularly if you can optimise the forex benefit. For this purpose I recommend learning to read charts.
------------------------------------------------
Andrew Sheldon www.sheldonthinks.com
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