Investors in Japan?

Question

James Frazee · Answer

I'm interested in Japan real estate. My wife and I want to build a portfolio of rental properties there, generating enough cash flow to get us to permanent residency status within a one-year time frame. I've heard conflicting reports, concerning how difficult or not difficult it is for foreigners to obtain financing. Can anyone confirm, one way or another?

Also, has anyone had success pursuing equity financing to build their portfolios? Aside from Tokyo, Osaka, Kyoto, and Fukuoka, one of the areas I'm looking at is Sapporo. Any thoughts on these areas? What are some other ones you would recommend?

Daniel Infante · Answer

@Dylan Tettemer

Hey Dylan, dont live in northern japan but in hiroshima.  Which part are you in? Tohoku?

Koh Shida · Answer

Hi James,

I am highly interested in Japan.

I am looking into getting into multifamily. Do you have any agents or connections? Thanks!

Account Closed · Answer

Following. Currently in Korea.

David Gotsill · Answer

@James Frazee - Hey James.  If I understand your ask correctly, you're wondering about your ability to borrow from Japanese lenders against properties in Japan?  And you're starting out, but want to build a portfolio that would allow you to obtain PR in 1 year?  Is that right?

I do have some thoughts, and there are also a handful of other Japan-based investors on BP who may want to add their thoughts as well.  FWIW, I have borrowed in Japan for personal and investment purposes.

If you're trying to get PR, then I am guessing you're in Japan on some other status? I am not aware of any specific threshold for real estate holdings that would, in and of itself, qualify you for PR.  Is there such a rule?  If so, what is the threshold?  For example, do you prove you own/control sufficient real estate based on the market value of the properties?  Or do you have to show sufficient positive annual cash flow (such as to support your lifestyle and show you won't be a burden on society)?  I'll admit that I don't follow the regs that carefully, but I would be cautious about placing all of your eggs in that basket.  And the 1 year time frame - do you have any basis for this?  Seems a bit aggressive to me.

Among my (admittedly limited) circle of friends and acquaintances, only those with PR have been able to borrow from Japanese lenders.  The exception is that I know a couple of people who did not actually have PR when they got their loans, but they had applied for PR (and had shown their lender proof of such PR application) at the time of the loan.

I would note that to many lenders having PR or not may be less of an issue than an ability to communicate in and read Japanese.  Based on what I have heard, most banks won't entertain the idea of lending to a borrower that doesn't speak Japanese.

Assuming you could get loans, you would still have to pony up the equity portion/down payment.  I don't know what nationality you are, but if you're American (most BP-ers are), then I would strongly encourage you to consider deploying capital in the US before doing so in Japan.

For markets - I think you hit the big ones.  You can include Sapporo in there as well, from what I understand.  Assuming you're looking at residential real estate, then population growth (or at least limited population decline) must be a key metric.  The cities you listed tend to do OK on that front.

I have a number of other questions/concerns, but I don't want to come off as too much of a wet blanket in my first impression (I like to save some cynicism for later impressions too, you know? ;) ).  And I don't mean to be negative.  It seems you have some compelling reasons to stay in/come to Japan long-term.  I'm happy to share my experience to the extent is helpful for you to achieve that goal.

Alvaro Soto · Answer

Not at all, man. I'm investing in Huntsville, Alabama/ St Louis, Missouri, and Jacksonville, NC.

Daniel Infante · Answer

@Alvaro Soto hiroshima.  Are you thinking about investing in the market here?

Alvaro Soto · Answer

@Daniel Infante

I’m in Iwakuni, Japan... you

Investors in Japan?

Most Popular Reply