NEWS

Today, we will let you in on a little secret about good real estate investment in Japan that you may not have heard before!

When we look at Japan's social problems, we find that the way to solve them is to invest in quality real estate.

Investing in group homes for the disabled.

This is a blue ocean market with high demand and low supply.

This is a very simple real estate investment in which the investor builds a group home for persons with disabilities and rents it out to a management company to earn rental income.

Five points of investment in group homes for the disabled.

1. OCCUPANCY RATE

The occupancy rate of group homes for people with disabilities is very high, averaging 98% nationwide,

The occupancy rate of group homes for people with disabilities is extremely high, averaging 98% nationwide,

High occupancy rates and long-term tenancy are guaranteed.

The risk of moving out is low because residents are rarely replaced in a short period of time. The average move-out rate is 3.25 years for general singles and 4.9 years for singles in group homes for people with disabilities, a difference of 1.5 (150%). Rental income is 50% higher than that of apartments.

As with apartments and condominiums, the risk of tenants moving out tends to be low because tenants are rarely replaced in a short period of time. The probability of rent delinquency risk is low, as is the case with ordinary rental properties, so it is said that stable management of the property can be achieved.

2. OCCUPANCY RATE & VACANCY RATE

Occupancy and Vacancy Rates of Rental Apartments and Group Homes for Persons with Disabilities

Occupancy and Vacancy Rates of Rental Apartments and Group Homes for Persons with Disabilities

The risk of vacancy is low because tenants are rarely replaced in a short period of time. The average move-out rate for singles is 3.25 years, and the average move-out rate for singles in group homes for people with disabilities is 4.9 years, a difference of 1.5 (150%). Rental income is 50% higher than that of apartments.

Quote from: Statistics Bureau of the Ministry of Internal Affairs and Communications, Japan Investment support in income-producing real estate.

Quotation: From Ishikawa, Toyama, and Fukui Prefecture HP

3. yield & no rent drop

Group home for the disabled

Yield rate of 8-9%,

Almost no rent drop for 20 years.

The average yield for rental apartment management is 8.03% (in 2022). In comparison, the yield rate for group homes for people with disabilities is 8-9%, making it possible to earn a stable, fixed yield. In Japan, the rent decline rate for rental apartments is 1.7% per year from 3 to 10 years old, and about 20% per year in 10 years compared to newly built apartments. However, unlike general apartment rental management, group homes are paid for the “care and support” attached to the apartment building, even if it has deteriorated over time, The longer the building has been in operation, the more it is perceived as a place where people with disabilities can live in peace.

4. USERS

The number of people with disabilities nationwide is approximately 9.65 million, or 8% of Japan's population.

According to a report by the Ministry of Health, Labor and Welfare in 2021, the number of people with disabilities in Japan is approximately 9.65 million. This means that approximately one out of every 12 persons in the total Japanese population has some kind of disability. However, the number of users of group homes for the disabled is only 140,000, and “housing” for the disabled is still in short supply. In fact, it is said that there are approximately 4.14 million people nationwide who are eligible for group homes for persons with disabilities, but the actual number of residents is about 140,000. This is about 3% of the total.

The number of users of group homes for persons with disabilities has increased 2.2 times in the last 10 years. Just comparing the number of persons with disabilities (about 9.65 million) with the number of users of group homes for persons with disabilities (about 140,000), there is an overwhelming shortage of facilities, despite the extremely high need for such facilities. The number of group homes for persons with disabilities is currently small, and applications for admission are flooding in, filling up within one to three months.

5. BUDGET

The national government and municipalities have budgeted 3.9 trillion yen for welfare services.

Group homes for the disabled are a policy promoted by the Japanese government, and group home management companies receive only low fees from residents, but receive subsidies from the government to operate the homes. This stabilizes the earnings of the management company (lessee), and as a result, the earnings of the investors (lessor/property owner) are also stabilized.


You hear about real estate investment in Japan in many places now.

How about riding this wave?

Have a nice real estate day!

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