Japan Foreclosed Property 2015-2016 - Buy this 5th edition report!

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.
You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.

Download Table of Contents here.

Friday, October 7, 2016

The Appeal of Japan

There are several different motives for living in Japan:
1. Working opportunities for foreigners are restricted to certain areas like technical specialist roles, finance, academic, programming and English instruction. Japanese fluency and cultural sensitivity are otherwise major stumbling blocks.
2. Liveability. Japan offers a very desirable living environment with modern services, conveniences and cultural engage. This is the benefit of a big city and it appeals to Asian and western skilled immigrants alike. The issue is arguably the entrenchment of Japanese "polite culture". You might wonder: "Who would object to politeness?" Any outsider who arises at the conclusion that politeness equates to engaging in 'cultural rhetoric', and otherwise appealing for 'outsider consideration' by diminishing your own ego whilst venerating Japanese culture. Whilst you can spurn Japanese values, the exposure to 'difference' has its own rewards, and one can celebrate how the Japanese live. The Japanese are in effect living how we all will be living 30 years from now. I frankly wish everyone was further progressed. This says nothing of Japanese values but simply their "bureaucratic organisation". 
3. Seasonal: The country offers a departure from Southern hemisphere seasonal weather. Not that the southern hemisphere needs a respite given its relatively mild winters.
4. Safety: Japan remains a very safe place to live and hold property.
5. Investment: The Japanese economy is often considered a "basket case". The reality however is that it is priced accordingly. Property prices outside of city centres has been kept low by falling real wages and housing oversupply. Japanese don't so much 'sell houses' as buy anew: whether next door or in the city. If there is any vulnerability it is in the prospect of higher taxes as taxes on land, particularly low - end property, are relatively modest. Low end property owners can pay as little as  $150-250 a year in rates, depending on the age and size of their house and land, as well as its location. The other benefit of property is that it's a real 'hard asset', and since not overpriced, Japanese property is not vulnerable to currency debasement concerns. You might however want to consider vulnerability to major earthquakes when buying. Here again, Japan benefits from an oversupply of property and modern design and engineering standards. This has become a national imperative.
6. Expat friendly. Being a big country you might have expected Japan to be "unliveable", but fortunately many Japanese speak some English,  most things are automated (even ordering food), and there is a great deal of English signage and many 'work-arounds'. You can find great places to drink and eat when you can meet with people all around the world.
7. Cost of living and business: The requirements for a business visa are quite onerous, and whilst income taxes are fairly high, operating costs are low. The same for the cost of living. The sustainability of the old fashioned corner store is a testament to the low cost of business in Japan. The obstacle is not financial, but rather cultural. This is why most foreigners target foreigners for business.
8. Technology. Japan has lost its technological lead however it remains a substantive player and is strong on technological adoption, making it a great place to buy toys like this display model at the Nissan Show Room in Ginza, central Tokyo.

Tuesday, October 4, 2016

Buying a new house in Japan

There are other options other than buying a foreclosed property. These options include:
1. Buying a used home on the market
2. Building a new home - whether a mansion, condo, or a stand-alone townhouse in the inner or outer suburbs of Tokyo  (or other major city).

One option of buying a new home from a developer. I was out walking in the Adachi district of northern Tokyo the other day, reflecting on the appeal of this type of the proverbial stand-alone  home.

It is fair to say that these villas might be construed as making sense for some people:
1. More storage than a strata property, both for cars, toys, other possessions.
2. Proximity to schools, nurseries and parks by virtue of the space for these facilities in the district. I.e. Proximity to a river flood plain makes particular sense given the sterilization of this land by flood restrictions for anything but flood mitigation and open spaces and sporting facilities.
3. Perception that wooden houses are safer structures than strata high rise structures.  This is a question that depends on your comfort with modern engineering in the midst of earthquake events, and how that exposure might play out in terms of sustained asset prices. I would suggest that engineering standards have closed the gap. The question is whether the developer can be trusted to not take any short cuts.
4. More freedom for kids to roam, ride their bikes, and play safe. Perhaps there is  more tolerance of noisy kids if this is the targeted market for the subdivision.

Of course such subdivisions have their disadvantages:
1. What is the point of paying for land value if there is no surplus land for you to develop?
2. What is the likelihood of your vertical strata space having value in future given the ubiquitous availability of it? There is one reason for hope, and that is a good location strategy that results in your community benefiting from a new rail line. 
3. Isolation from the conveniences of the city, or even a regional city. There are of course levels of convenience. Can you ride home from the station? Will you otherwise have to pay for kids and family to travel concurrently to the city. In such cases, you are better off living near a regional city in a "modern" mansion, knowing the lifespan of older mansions is diminished by lower engineering standards.
4. The depreciation rate on new houses is very high. Marketing costs and manipulative sales strategies can see buyers pay too much compared to existing homes.  It's not necessarily that home developers are ripping off the customer, but that the costs of a new building are high, and many non-discerning buyers are prepared to make emotional or haphazard "trusting" decisions upon the urging of sales driven companies.

You can buy a modern villa of 100m2 in land area and house floor area contained in a compact 2-storey house for around Yeq 390-420,000. These are very constructed homes with a lot of space. Not so comfortable given the smallness of rooms.

One of the reasons you might welcome a villa is foe the sun and breezes, but consider your window sizes and fly screen options. Consider that your neighbor's house might be as close as 0.5m away, reducing air flow and light to lower floor. Do you want any garden?

The problem with buying new is that the fresh paint smell doesn't last.  The value of a new home will fall rapidly on purchase over the first 5 years. You might also suffer the result of poor neighbour's if their practices are evident. i.e. If they are untidy.

There are other important considerations though:
1. Are you buying on a good train line with respect to entertainment and shopping centres
2. Are personal connections served? You would hope to live there for 15 years if you are going to buy new, otherwise those early depreciation rates are going to be costly. Renting such a place is going to be costly in terms of depreciation too. Be sure to lock in a long term customer to fully realise that "new home" premium.
3. Is there scope for new train lines? A geospatial gap to fill? This creates upside for more lines and competition, which improve connections and stimulate population growth and development of services. Development is not equal. We need to make decisions that improve our odds of success.
4. Are the prices for rail reasonable? I bought on the Seibu Ikebukuro line because it's cheap. Some lines however are very expensive, like the Nippori Toneri Line. The price is a reflection of capital costs, competition, line length and the incomes of the market catchment.

There are two types of unwary people that buy villas:
1.  Young families buying their first home
2. Older couples who are looking for a retirement home close to their children & families, or plausibly a better house on their local community. Often it's a preference to remain in their home town. 

Thursday, June 16, 2016

Bike touring in Japan

One of the best reasons to buy foreclosed property Japan is to take advantage of the fabulous infrastructure for domestic travel. We all hate paying too much, and in Japan, people have paid too much for 'over-capitalised' infrastructure that borders on the insane. i.e. Looping bridges and highways that parallel the coast on pontoons. Great facilities, roads and pathways, which are a boon for bike tourers.

Here is a set of resources for bikers thinking about travelling around Japan, provided by a person who has done it. I am personally more interested in the opportunities for whitewater kayaking, and I spent a lot of time touring around on a Japan Rail Pass checking out the various rivers that run along a litany of Japanese river valleys.

Dronelius Cornelius Sminchauchan Part 1 - hints and tricks
Hints, tips and tricks to travel Japan on a very low budget. A guide to Free camping, supermarkets,…
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Wednesday, March 16, 2016

TPPA to rejuvenate Japanese agriculture in short term

One of the interesting aspects about Japan is the irony of the place. I say this for a number of reasons, among them:

  1. A nation that pays its farmers not to plant crops
  2. A nation, long famed for the most expensive real estate in the world, that perplexingly has the cheapest property, in the most convenient locations that Westerners could imagine
  3. A proud nation lacking in constituents with self esteem
  4. A considerate nation lacking in empathy for others
On this note, I draw attention to another prospective opportunity for adventurers that might gain traction, if only because it is 'counter-cyclical'. Japan is one of a number of Asian Pacific nations that is reforming its trade laws. Japan has long been open to trade reforms, however the nation has oft resisted these changes because:
  • Change was considered electoral suicide in Japan - particularly the topic of farm support
  • Food security was considered a key consideration
Today, priorities seem to have shifted, and so there is good reason to believe that Japan might in fact support agricultural and trade reform. The reasons to suspect this are:
  • The prospect of importing cheap food from abroad
  • The high cost of living in Japan due to high food costs, and its corresponding impact on low income families, who are growing in number
  • The declining importance of farming due to the aging population
  • The appeal of opening up trade opportunities for Japanese industry, even if that means corresponding closure to a long history of mercantilism on agriculture
  • The spiraling Japanese public debt, and thus the corresponding need for Japan to end its subsidies on agriculture
We might then wonder whether Japan is seeing the writing on the wall, and thus dropping its previously mercantilist strategy, for what might be construed as a far more enlightened and fairer posture to all concerned. Paradoxically, it appears this strategy is having the opposite affect. The Japanese government has increased support for Japanese farmers to stop rice farming. i.e. This funding could be construed as:
  1. A payoff to ease the burden on farmers entering retirement, i.e. The bulk of Japanese farmers are over 65yo, working small land plots compared to their competitors, with modest farm equipment.
  2. A capital incentive for Japanese farmers, where they remain committed and their farmlands prove suitable, to opt for a different type of agricultural product, that is more sustainable in a post-reform era.
The implication is clear. There will be several changes in the post-reform period:
  1. More commercial acumen as committed younger farmers and corporate farmers have positive incentives to shift to more marketable, higher margin crops. Clearly in the past, the guarantees of farm support only gave Japanese older farmers the incentive to persist in what they were doing, so they just became more 'entrenched' in protectionism. 
  2. Higher economies of scale in the new era. There will need to be a great deal of consolidation of existing farms. Most likely we might expect farmers, not to sell their land, but instead to lease lands for a modest retirement 'farmland' income. 
  3. Greater land availability. It is inevitable that some of this land will become available to 'new farmers'. The question is whether it will be quality land, and whether the 'shards of land' offered will be desirable in the new era. After all, corporate farmers will want to consolidate their interests, and not have their interests scattered across the country. There is every reason to think that they are already identifying the farms with the greatest appeal in terms of access to markets, fertility, and centrality to their existing interests. Notwithstanding the appeal of 'proximate land', the corporate farmer has a trump card up his sleeve. Japanese agricultural land is zoned for agriculture, so corporate farmers will know that, even in 'growth areas' close to cities, there will be land that retiring farmers will have no choice but to accept a 'low-price' deal in order to secure use of land. 
The opportunity of course to buy farm land in Japan is not restricted to Japanese nationals, however there is a need for any investor to pay membership dues to the Japan Agriculture Association (JA). The appeal of farming in Japan is strong for a number of reasons:
  1. Low yield, low margin rice farming lands are going to give way to higher yielding, higher margin crop selection
  2. Asian crop competitiveness is destined to fall as farms in Asia's emerging markets prefer to work in factories rather than on farms. This of course will take time. 
  3. Higher farm equipment utilization rates can be expected to cut farming costs. Historically farmers in Japan, whilst cooperative, have not been particularly engaging when in came to sharing farm equipment. This, and the smaller plot sizes, resulted in small scale farm machinery, which is an approach mirrored in Asia, and otherwise a boon for Japanese farm equipment manufacturers.

The other appealing factor is the possibility of buying cheap and moribund 'scrap' infrastructure at auction. A great number of Japanese farmers have gone broke, and retain shards of Japanese farm lands and infrastructure as a result of poor business and lifestyle decisions. Some have become alcoholics. In any case, a substantial number of properties have ended up in the courts as foreclosed properties. Given the prevailing attitudes to farming in Japan, this does offer a counter-cyclical opportunity for others. Consider that:

  1. Japan is reforming the sector
  2. Japan's hinterland has amongst the best rural infrastructure in the world, with great connectivity to the main Japanese cities, i.e. Rarely is an isolated rural hinterland more than 90 minutes train from a major city, or three hours from a mega-tropolis like Tokyo, Osaka, Fukuoka, or arguably not Sapporo (Hokkaido). Yes Sapporo is substantial centre, but the cold north is not well suited to agriculture anyway, given the cold climate, or short seasons. 

If you are more interested in Japan's farm sector, and the opportunities to buy farm land in Japan, consider our Japan Foreclosed Property guide. Most of the buyers are 'small scale' Westerner farmers married to Japanese spouses, however there is scope for those with greater capital resources to seek a business visa for the purpose of pursuing a farming business. This obviously requires vetting by the Ministry of Foreign Affairs of your business proposal.

The strategic opportunity in Japan could be considered to lie in the future of Japan. Consider that Japan is struggling to kick-start its economy. There is every reason to think that objections to immigration will be swept away by economic imperatives, and that more Indians, Chinese, Filipinos and Koreans, will mean the introduction of more restaurants with 'peculiar' or exotic food supply needs, and the expectation that this produce will be supplied locally in Japan. This is therefore an opportunity to anticipate if one sees Japan moving in the same direction as other Western countries.
It seems however that it is the Trans-Pacific Partnership Agreement (TPPA) that is to kickstart Japanese agriculture. It is probable that the opportunities to buy foreclosed Japanese rural property will be in this early stage, and that latter-day entrants will be left to fight over infertile, remote land in the 'full priced' private property market.

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Major cities of Japan

資料:各都市の推計人口(ホームページ) Japan's major cities:
札幌市 Sapporo 仙台市 Sendai さいたま市 Saitama 千葉市 Chiba
東京都区部 Tokyo-23 横浜市 Yokohama 川崎市 Kawasaki 新潟市 Niigata 静岡市 Shizuoka 浜松市 Hamamatsu 名古屋市 Nagoya 京都市 Kyoto 大阪市 Osaka 堺市 Sakai 神戸市 Kobe 広島市 Hiroshima 北九州市 Kitakyushu 福岡市 Fukuoka

Cities and towns of Tokyo

競売物件購入 keibai buttsuken kounyu 千代田区 Chiyoda-ku 八王子市 Hachioji-shi 羽村市 Hamura-shi 中央区 Chuo-ku 立川市 Tachikawa-shi あきる野市 Akiruno-shi 港区 Minato-ku 武蔵野市 Musashino-shi 西東京市 Nishitokyo-shi 新宿区 Shinjuku-ku 三鷹市 Mitaka-shi 文京区 Bunkyo-ku 青梅市 Ome-shi 郡部 Towns and villages 台東区 Taito-ku 府中市 Fuchu-shi 瑞穂町 Mizuho-machi
墨田区 Sumida-ku 昭島市 Akishima-shi 日の出町 Hinode-machi 江東区 Koto-ku 調布市 Chofu-shi 檜原村 Hinohara-mura 品川区 Shinagawa-ku 町田市 Machida-shi 奥多摩町 Okutama-machi 目黒区 Meguro-ku 小金井市 Koganei-shi 大田区 Ota-ku 小平市 Kodaira-shi 島部 Islands 世田谷区 Setagaya-ku 日野市 Hino-shi 大島町 Oshima-machi 渋谷区 Shibuya-ku 東村山市 Higashimurayama-shi 利島村 Toshima-mura
中野区 Nakano-ku 国分寺市 Kokubunji-shi 新島村 Niijima-mura 杉並区 Suginami-ku 国立市 Kunitachi-shi 神津島村 Kouzushima-mura 豊島区 Toshima-ku 福生市 Fussa-shi 三宅村 Miyake-mura 北区 Kita-ku 狛江市 Komae-shi 御蔵島村 Mikurajima-mura 荒川区 Arakawa-ku 東大和市 Higashiyamato-shi 八丈町 Hachijo-machi 板橋区 Itabashi-ku 清瀬市 Kiyose-shi 青ケ島村 Aogashima-mura 練馬区 Nerima-ku 東久留米市 Higashikurume-shi 小笠原村 Ogasawara-mura 足立区 Adachi-ku 武蔵村山市 Musashimurayama-shi 葛飾区 Katsushika-ku 多摩市 Tama-shi 江戸川区 Edogawa-ku 稲城市 Inagi-shi

Cities & Towns of Saitama

競売物件購入 keibai buttsuken kounyu 西区 Nishi-ku 北区 Kita-ku 大宮区 Omiya-ku 見沼区 Minuma-ku 中央区 Chuo-ku 桜区 Sakura-ku 浦和区 Urawa-ku 南区 Minami-ku 緑区 Midori-ku Cities (-shi) さいたま市 Saitama-shi 川越市 Kawagoe-shi 熊谷市 Kumagaya-shi 川口市 Kawaguchi-shi 行田市 Gyoda-shi 秩父市 Chichibu-shi 所沢市 Tokorozawa-shi 飯能市 Hanno-shi 加須市 Kazo-shi 本庄市 Honjo-shi 東松山市 Higashi-Matsuyama-shi 岩槻市 Iwatski-shi 春日部市 Kasukabe-shi 狭山市 Sayama-shi 羽生市 Hanyu-shi 鴻巣市 Kounosu-shi 深谷市 Fukaya-shi 上尾市 Ageo-shi 草加市 Souka-shi 越谷市 Koshigaya-shi 蕨 市 Warabi-shi 戸田市 Toda-shi 入間市 Iruma-shi 鳩ケ谷市 Hatogaya-shi 朝霞市 Asaka-shi 志木市 Shiki-shi 和光市 Wako-shi 新座市 Niiza-shi 桶川市 Okegawa-shi 久喜市 Kuki-shi 北本市 Kitamoto-shi 八潮市 Yasio-shi 富士見市 Fujimi-shi 上福岡市 Kami-fukuoka-shi 三郷市 Misato-shi 蓮田市 Hasuda-shi 坂戸市 Sakado-shi 幸手市 Satte-shi 鶴ケ島市 Tsurogashima-shi 日高市 Hidaka-shi 吉川市 Yoshikawa-shi 北足立郡 Districts (-gun) 伊奈町 Ina-machi or ko 吹上町 Fukiage-machi 大井町 Oi-machi 三芳町 Miyoshi-machi 毛呂山町 Moroyama-machi 越生町 Ogose-machi 名栗村 Naguri-mura

Cities &Towns of Kanagawa

競売物件購入 keibai buttsuken kounyu 県計 市部計 郡部計 横浜市 鶴見区 神奈川区 西区 中区 南区 港南区 保土ヶ谷区 旭区 磯子区 金沢区 港北区 緑区 青葉区 都筑区 戸塚区 栄区 泉区 瀬谷区 川崎市 川崎区 幸区 中原区 高津区 宮前区 多摩区 麻生区 横須賀市 平塚市 鎌倉市 藤沢市 小田原市 茅ヶ崎市 逗子市 相模原市 三浦市 秦野市 厚木市 大和市 伊勢原市 海老名市 座間市 南足柄市 綾瀬市 三浦郡葉山町 高座郡寒川町 中郡 大磯町 二宮町 足柄上郡 中井町 大井町 松田町 山北町 開成町 足柄下郡 箱根町 真鶴町 湯河原町 愛甲郡 愛川町 清川村

Cities & Towns of Chiba

競売物件購入 keibai buttsuken kounyu 県計 市計 郡計 千葉市 中央区 花見川区 稲毛区 若葉区 緑区 美浜区 銚子市 市川市 船橋市 館山市 木更津市 松戸市 野田市 佐原市 茂原市 成田市 佐倉市 東金市 八日市場市 旭市 習志野市 柏市 勝浦市 市原市 流山市 八千代市 我孫子市 鴨川市 鎌ヶ谷市 君津市 富津市 浦安市 四街道市 袖ケ浦市 八街市 印西市 白井市 富里市

Cities & Towns of Osaka

競売物件購入 keibai buttsuken kounyu 総 数 府 保 健 所 計 池 田 池田市 豊能町  箕面市  能勢町  豊中豊中市  吹 田 吹田市 茨木摂津市  茨木市 島本町 枚方枚方市  寝屋川 寝屋川市 守口 守口市  門真市 四條畷 四條畷市 交野市  大東市 八 尾 八尾市  柏原市  藤井寺 松原市  羽曳野市 藤井寺市 富田林 大阪狭山市 富田林市 河内長野市 河南町  太子町  千早赤阪村 和泉和泉市  泉大津市 高石市  忠岡町  岸和田 岸和田市 貝塚市  泉佐野 泉佐野市 熊取町 田尻町  泉南市  阪南市  岬町 大 阪 市 堺市 高槻市 東大阪市  

Cities & Towns of Hiroshima

競売物件購入 keibai buttsuken kounyu 県計 広島市 広島市中区 広島市東区 広島市南区 広島市西区 広島市安佐南区 広島市安佐北区 広島市安芸区 広島市佐伯区 呉市 竹原市 三原市 尾道市 福山市 府中市 三次市 庄原市 大竹市 東広島市 廿日市市 安芸高田市 江田島市 府中町 海田町 熊野町 坂町 安芸太田町 北広島町 大崎上島町 世羅町 神石高原町