My name is Katie Kuo, and I'm so happy to have found the Bigger Pockets community. My family is in the initial stages of a move to Japan and applying for a business manager visa. We plan to invest in real estate and use rental income as our business’s income stream.
We’ve been gathering information about the rental property market in Japan in terms of realistic expectations for yields, as well as a reasonable timeline for getting started and generating income to support our family. I would be so grateful to connect with others who have experience with the rental landscape in Japan (whether Kanto, Kansai, Fukuoka, Sapporo, or elsewhere!).
While there is plenty of information out there, there is no substitute for real connections and relationships, so thank you to everyone who is part of this community!
Hey @Kathryn Kuo - fellow Japan-based investor here. My personal opinions below, with a lot of generalities. And with no intention of being a wet blanket...
In my experience, most US citizens invest in US properties, even when living in Japan. In my opinion, the primary reasons are financing and appreciation.
Generally, you're likely to have trouble getting financing for investment properties here. This is true even if you set up a business and establish a track record. RE loans to business usually require the business owner to personally guarantee the loan. So you're left with acquiring properties all-cash. But since J properties generally depreciate over time (not like properties back home which appreciate), the idea of sinking cash into a property that is worth less five years from now is not terribly appealing.
Like you say, then the question is what sort of yield can you get, and will it cover the deprication losses?
I have seen posts where investors seem to be having success with airBnb rentals and/or acquiring "akiya" or other extremely cheap properties. Acquisition costs are low, so easier to generate good yields. People are doing it, so presumably it works.
FWIW, I invested in Japan for a few years, but lack of rent growth, lack of appreciation, concerns about natural disasters, and just general lack of confidence in the J market led me to shift focus only to the US. Totally happy to meet up if you're in Tokyo to discuss REI.
Finally, i'll ping a few others I believe are active/interested in Japan properties and generally based here in Japan (sorry guys). - Dave
Hello, @David Gotsill, and thank you so much for your information and insight! I appreciate your reply on my post and your offer to connect further.
Thank you for sharing your concerns about paying in cash and depreciation; those are definitely something on our radar. We do expect to pay cash, understanding that the financing can be tricky, with our primary goal securing enough cash flow from a business based in Japan for a visa. Thank you for your information about akiya renovation and AirBnBs.
It definitely seems like (as with all things) there's a balance between investing time and money. In other words, we could invest less time in managing long term rentals, but would expect lower yields and need more capital to invest up front, or we could invest more time in managing a few AirBnBs but expect higher yields. Would you say that's accurate?
Thank you again for your reply to my post and for pinging the others! I really appreciate your help, and your welcome to the community!