Many buyers will be unsure what type of property to buy in Japan. I have several suggestions which will make you reflect more on your decision. The most important factors are:
1. Neighbours: Foreigners in Japan are subjected to discrimination in Japan. The nature of discrimination I don’t find terribly intrusive or threatening. Its more of a quiet detachment which makes them more scared of you. When you do something wrong you will probably never redeem yourself, and being in a strange country you will probably make an error. If you have a Japanese partner, then of course it makes a great deal of difference, particularly with the women. Since you are buying foreclosed property you want to avoid the possibility of angst from the previous owner. You therefore want to avoid properties with a legacy of family ties, like neighbouring brothers and sisters, etc. You are safe from a family legacy if you buy in a subdivision. You are not buying in non-urban land. A reader made a good point. Being in a rural area means you become the focus of attention.
2. Charges: Charges on property in Japan are relatively low compared to other countries. Insurance costs are low, small lots mean that land taxes low, though there is also a tax on land improvements, so it is variable. Apartments or ‘mansions’ carry a very high charge to cover future improvements, as well as on-going maintenance. This charge is excessive and is justification for avoiding such strata-type property.
3. Depreciation: Japanese buildings depreciate significantly after 12 years as a result of the aging style and finish of the building. This ‘aging’ is because Japanese property is built for ‘function’ rather than lifestyle or aesthetic. For this reason I would caution against buying property which is going to deteriorate in value faster rate than your return on investment grows. The implication is that you want to buy a property with a high percentage of land value. This is likely to occur closer to the city centres. Mind you, modern buildings are better designed, so will likely keep their age better in future. The alternative is buying land with an old building on it and giving it a face-lift when required. If taking this approach I would tend to opt for one-story houses to avoid stress on the wooden frame and potential risks of poor design or workmanship.
4. Land area: Attempt to get as much land area as possible. Westerners are not accustomed to living on top of each other. If you are placed in the position of having neighbour problems, better to have some space between them and yourself.
5. Improvements: I would caution against buying property in rural areas which is outside a subdivision. There are several reasons:
a. Short cuts: There is the possibility of short cuts being taken with respect to property approvals. i.e. Unlicensed water tank.
b. Shared infrastructure: The old way of building was not regulated. For instance, if you buy a farm house, the septic or water might be connected through a neighbour’s property (i.e. a relative of the previous owner). The property was thus designed as part of a community. It is preferable to avoid this style of property if there is any uncertainty about the existence of such ‘shared’ infrastructure.
c. Property boundaries: The property boundaries in the case of rural property are not so clearly established, so I would suggest avoiding rural property if the land area is small, or any improvements are close to the property boundary. There will not be any property disputes if you buy in a subdivision.
6. Geological risks: I would be inclined to avoid some of the subdivisions one finds perched on the sides of mountains on the fringes of cities. Japan is a geologically unstable area, so any building on or near step structures poses risks. The risk of land slide arises due to unstable slopes, but also because of rising hydrostatic head as water builds-up behind retaining walls. There are drainage holes to avoid this risk, but some structures are better designed than others.
For these reasons I consider properties in the 12-18yo age range as the best buys in semi-rural settings. Certainly I would be looking at the younger end of the market for rental properties, though ultimately it’s a question of how well the property has been maintained. One of the properties we purchased was 12yo old, however internally it looked brand new after we painted the wallpaper. The cost of building in Japan is very high so I would be looking at 'liveable' structures which can be renovated by recladding than building a completely new structure.
Refer to our Japan foreclosed property report for more details.
1. Neighbours: Foreigners in Japan are subjected to discrimination in Japan. The nature of discrimination I don’t find terribly intrusive or threatening. Its more of a quiet detachment which makes them more scared of you. When you do something wrong you will probably never redeem yourself, and being in a strange country you will probably make an error. If you have a Japanese partner, then of course it makes a great deal of difference, particularly with the women. Since you are buying foreclosed property you want to avoid the possibility of angst from the previous owner. You therefore want to avoid properties with a legacy of family ties, like neighbouring brothers and sisters, etc. You are safe from a family legacy if you buy in a subdivision. You are not buying in non-urban land. A reader made a good point. Being in a rural area means you become the focus of attention.
2. Charges: Charges on property in Japan are relatively low compared to other countries. Insurance costs are low, small lots mean that land taxes low, though there is also a tax on land improvements, so it is variable. Apartments or ‘mansions’ carry a very high charge to cover future improvements, as well as on-going maintenance. This charge is excessive and is justification for avoiding such strata-type property.
3. Depreciation: Japanese buildings depreciate significantly after 12 years as a result of the aging style and finish of the building. This ‘aging’ is because Japanese property is built for ‘function’ rather than lifestyle or aesthetic. For this reason I would caution against buying property which is going to deteriorate in value faster rate than your return on investment grows. The implication is that you want to buy a property with a high percentage of land value. This is likely to occur closer to the city centres. Mind you, modern buildings are better designed, so will likely keep their age better in future. The alternative is buying land with an old building on it and giving it a face-lift when required. If taking this approach I would tend to opt for one-story houses to avoid stress on the wooden frame and potential risks of poor design or workmanship.
4. Land area: Attempt to get as much land area as possible. Westerners are not accustomed to living on top of each other. If you are placed in the position of having neighbour problems, better to have some space between them and yourself.
5. Improvements: I would caution against buying property in rural areas which is outside a subdivision. There are several reasons:
a. Short cuts: There is the possibility of short cuts being taken with respect to property approvals. i.e. Unlicensed water tank.
b. Shared infrastructure: The old way of building was not regulated. For instance, if you buy a farm house, the septic or water might be connected through a neighbour’s property (i.e. a relative of the previous owner). The property was thus designed as part of a community. It is preferable to avoid this style of property if there is any uncertainty about the existence of such ‘shared’ infrastructure.
c. Property boundaries: The property boundaries in the case of rural property are not so clearly established, so I would suggest avoiding rural property if the land area is small, or any improvements are close to the property boundary. There will not be any property disputes if you buy in a subdivision.
6. Geological risks: I would be inclined to avoid some of the subdivisions one finds perched on the sides of mountains on the fringes of cities. Japan is a geologically unstable area, so any building on or near step structures poses risks. The risk of land slide arises due to unstable slopes, but also because of rising hydrostatic head as water builds-up behind retaining walls. There are drainage holes to avoid this risk, but some structures are better designed than others.
For these reasons I consider properties in the 12-18yo age range as the best buys in semi-rural settings. Certainly I would be looking at the younger end of the market for rental properties, though ultimately it’s a question of how well the property has been maintained. One of the properties we purchased was 12yo old, however internally it looked brand new after we painted the wallpaper. The cost of building in Japan is very high so I would be looking at 'liveable' structures which can be renovated by recladding than building a completely new structure.
Refer to our Japan foreclosed property report for more details.
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