In my book on buying foreclosed property in Japan I raise a number of strategies for buying property in Japan. This story in the Japan Times highlights the application of one such strategy when buying property. The East Japan Railway Co is building a new railway station between Shinagawa and Tamachi stations. This type of 'infilling' will become more common, so its a good idea to identify the locations in which this is likely to occur and to buy property in those locations. The sites to look at are in areas where subways might be extended or new stations added. The principle guiding your decision-making will be:
1. Local minimum population density - look at neighbouring areas
2. Distance between train stations - look for anomalies
3. Explanation for anomalies - why is there no station there? Topographic anomaly so no settlement; perhaps a park, etc.
4. Growing population density - historical evidence that the area is growing in population. High rise developments, new stores like HokkaHokkaTai and McDonalds, etc are good signs to look for, but you can also look at Japan's very good population statistics. They offer you monthly changes in demographics.
5. Space for growth - stations need to be supported by near-station development. It is harder to develop a station if the railway company cannot build some type of shopping precinct to service it.
This approach can work on outer city lines or inner city lines. Of course, our intent is to be close, but not too close to such a development. We want to live close to amenities, the railway station. There is a big periphery around a likely site, and this raises your prospects of buying such a property as a foreclosure. You will find it hard to get such a property in Kanagawa, but not in Saitama. If we are going with this model, we are buying the foreclosed property to 'hold' as a rental property as we want to profit from anticipated future development. After a proposed new station is announced, you can expect property prices to double...as your property, which might be 7km from a railway station, might now be 3km away. Clearly we do best if we buy close to an existing line, but not too close.
This strategy can be applied to both land leases and freehold properties, as long as you are able to get an extension on your land lease. Read more about the nature of this development, as it will give you an idea of the dynamics of this approach.
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