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Hello all, I am looking for a good opportunity to learn more about investment real estate in Japan!

Today, we would like to share with you another information about investment real estate, which is very popular nowadays.

First of all, you may be wondering about real estate investment loans that foreigners can get.

It is complicated, but not impossible.

While Japanese investment real estate can be purchased by foreigners who do not have permanent resident status, it is also true that it is somewhat difficult for those who do not have enough personal funds and need to take out a loan to purchase investment real estate. This section explains loans for foreigners purchasing investment real estate in Japan.

Foreign Investors Surge in Japan's Real Estate Investment Market
For foreigners, the Japanese real estate market is one of the few attractive markets in the world where they can invest in real estate like Japanese people without any special restrictions.

With real estate prices in Japan on an upward trend since around 2013, and with the new coronavirus having had less of an impact than in Europe and the U.S., the Japanese real estate market is attracting attention, especially in urban areas, and there are increasing numbers of foreigners buying condominiums in the Tokyo area for investment purposes. It is still fresh in our minds that the amount of commercial real estate investment in the Tokyo area during the January-September period of 2020 reached $19.4 billion (approximately 2 trillion yen), making it the world's top investor. In addition, the percentage of foreign investors directly investing in Japanese real estate reached 38% in the January-September period of 2020, a significant increase in the percentage of purchases by foreigners.

With the surplus of investment money due to monetary easing by central banks in various countries due to the Corona disaster, the inflow of funds into the Japanese real estate market, with its stable political situation and large market size, is expected to continue in the future.

Advantages and Disadvantages of Real Estate Investment in Japan
Although foreigners residing in Japan as well as foreign investors living abroad can obtain Japanese real estate, it is necessary to understand the advantages and disadvantages of purchasing investment properties in Japan in order to invest in real estate with peace of mind.

Merit ❶Easy for foreigners to purchase
In other countries, there are often regulations prohibiting foreigners from owning land, etc. In Japan, however, there are no regulations for foreigners to purchase Japanese real estate. Taxes such as real estate acquisition tax and fixed asset tax are levied in the same way as for Japanese nationals, and there are no taxes imposed only on foreigners. Even if you are a foreign national, you can purchase real estate in Japan even if you do not have permanent resident status or any type of visa.

In other words, you can own land and buildings just like Japanese nationals, and the necessary fees and taxes are the same as for Japanese nationals.

Merit❷Yields can be expected at a discount.
In Japan, yields of 4-10% can be expected in urban areas, and prices are reasonable from a global perspective.

There is no country risk due to stable political, economic, and social conditions. The stable yields and the fact that real estate investment can be started with a small amount of money are the reasons for the popularity of Japan.

Disadvantage ❶
There is a risk of natural disasters such as earthquakes and typhoons.

Japan is prone to natural disasters such as earthquakes and torrential rains, and it is necessary to mitigate the risk by purchasing RC (reinforced concrete) buildings.

Disadvantage❷
Concerns about an increase in vacancy rates due to a declining population

As Japan's birth rate declines and the population ages at an accelerating pace, there is concern that the vacancy rate will increase as the population declines. It is important to purchase real estate in urban areas where rental demand can be expected, rather than in regional cities where vacancy risk is high.

We will continue next week.

This information will help you own an investment property in Japan.

Please look forward to hearing from us!


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