If you have a bit of extra money on your hands and are looking for new investment possibilities, you should consider the possibility of real estate investment in the Kobe area. Now is a prime time to invest in the Kobe area where the prices are relatively low compared to real estate investment in other countries and the ROI can be relatively high.
Foreign real estate investment in Japan has soared in the past few years. Real estate deals in Japan in 2014 totaled JPY 5.6 trillion, representing an increase of 16% over 2013. One reason for this unprecedented level of foreign investment was the 14% plunge of the value of the yen against the dollar. In addition, the size and scale of property purchases by international investors have increased as well.
Purchasing property is one of the biggest and most difficult investment decisions to make, more so in a foreign country. Below is a list of items you should consider.
In the Kansai, your best bet is to consider small residential units, such as studios and 2LDK apartments in buildings that were built after the adoption of earthquake-resistance regulations in the 1980s and thereafter. Residential units that are located within 10 minutes of the train station are particularly desirable. In the Kobe area, the Kasuganomichi area has many attractive investment units. Neighborhoods closer to Shin-Kobe station also have units that attract tenants looking for a more suburban ambience.
Generally, yes. This means that after you purchase the unit, the tenant will stay. The only change will be the change of owners. Before buying the property, you should check the following:
As a general matter, you should be in a position to invest at least JPY5 million for a residential unit. Additional fees that you will need to pay include a 3% purchase fee, plus JPY60,000 and fees for the services provided by a shihou-shoshi law (司法書士, a judicial notary public), and stamp tax.
Although this will vary depending on the property, the ROI of return for a studio or 2LDK generally ranges from 6%-8%, which is slightly higher than the average national rate.
Although there are no legal restrictions on the ownership of real property by foreigners, obtaining a mortgage from a bank may be somewhat problematic. However, recently some banks are becoming more flexible about lending to foreign buyers. Purchasers can be either a foreign individual or a foreign company.
The real estate agent can help you locate potential investment property, negotiate with the owner, and provide you with information about the property, the building, or the management company that may not be publicly available. Please note that the level of required disclosure in real estate transactions in Japan may be lower than that in other countries. Whatever information is available is available only through real estate agencies. Independent sales are very uncommon in Japan.
