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Hello everyone!

We are here to talk about the hot topic of real estate investment overseas.

We will continue the series today. Some of the contents are the same as last week's article, but please read on.

What are the risks and disadvantages of overseas real estate investment?
While overseas real estate investment has the potential to yield higher returns than domestic real estate investment, there are also risks unique to overseas. Let's take a look at some typical risks and disadvantages.

Risks related to information gathering
Unlike in Japan, there are risks associated with overseas real estate investment that make it difficult to gather necessary information. In Japan, it is easy to obtain detailed information on properties for sale. It is also easy to make comparisons by area and time series, so you can make projections for future transactions based on market conditions.

On the other hand, this is not the case overseas. Although a certain amount of information is publicly available, you need to actively search for it, and you also need to be able to speak English. Especially in emerging countries, there are many countries that do not have regulations regarding online advertising of real estate, so there are many unreliable information sources.

Although the hurdles to gathering information have been lowered considerably with the development of the Internet, there are limits to the level of information that real estate companies can gather on their own, so consult with a real estate investment company that is strong in overseas real estate to increase your chances of success.

Difficulty in obtaining financing from local financial institutions
Unlike Japanese buyers who purchase real estate in Japan, it is difficult to obtain financing from local financial institutions before you have a good track record in overseas real estate investment.

However, major Japanese financial institutions such as ORIX Bank and SMBC Trust and Banking Corporation, as well as the government-affiliated Japan Finance Corporation, offer financing services for overseas real estate investment. It may be possible to obtain financing by using such services.

Risks Related to Rental Management
When investing in overseas real estate, it is important to be aware of the risks associated with rental management. In many cases, management is outsourced to local real estate companies, but unfortunately, some local companies take advantage of the fact that the owners are overseas and manage their properties in an inappropriate manner.

This is especially true of private brokers, but it is important to be aware that there are cases in which they suddenly lose contact with the owner. If the rental management company is not competent enough, the risk of vacancy also increases, and the expected income gain may not be achieved. In order to reduce such risks associated with rental management, it is advisable to outsource the management to a Japanese company that has a local network.

Risks Specific to Emerging Countries
Emerging countries are promising investment targets for those seeking large returns, but it is also important to be aware that there are risks specific to emerging countries.

For example, in the case of emerging countries, there is a method of purchasing a property in which you can start paying for the property before it is completed.

There are also cases that are usually unthinkable in Japan, such as when a problem is discovered after the property is completed, fraudulent trouble, or when you are forced to sell the property due to changes in real estate laws.

How to choose a real estate investment company that is strong in overseas real estate and checkpoints
It is important to choose a real estate investment company that is strong in overseas real estate in order to avoid unnecessary problems as well as to learn about the local area and market conditions.

In addition to having a real estate company act as an intermediary, another major method of purchasing overseas real estate is to purchase directly from a development developer. However, purchasing directly from a development developer is difficult and uncommon without local information gathering and connections, so next week we will discuss how to choose a real estate company that specializes in overseas real estate to broker your property.


This is a good example of the global situation.

We think this is useful information for those who are considering overseas real estate as a source of income in the future.

Please look forward to next week's edition!


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