In recent years, the real estate market in Japan has been hot, and more and more Chinese people have begun to invest in overseas real estate. But most people are ignorant when they Japan to buy a house, and they don't understand that there are many invisible pits in Japan real estate investment, which leads to many people not waking up until they have stepped on the pit after buying a house, but the money has been spent, and it is too late to regret it......
So what should you pay attention to when investing in real estate in Japan, today Xiaobian will use the real cases of friends around you to help you avoid pitfalls (pure dry goods)!
In Japan, many real estate agents, especially those for overseas customers, are mostly taking advantage of the information gap to collect money.
For example, there are often real estate agents who sell properties like the following to overseas investors:
The small apartment (1Room) near XX Station in Tokyo has already been moved in, and there is no window period, and the rent is collected steadily.
The real estate agent said that this is an item they specially prepared for overseas investors, and even in order to give the landlord peace of mind, they have specially launched a peace of mind guarantee, which can guarantee rental income for 30 years.
Small apartments have little investment, high returns, and start to make money, which sounds really good!
But is there really such a good thing?
I have a friend who has always been very diligent and hardworking, and after saving a small amount of money while working in Japan, he bought an investment 1room under the temptation of a real estate agent, which is what we often call a small apartment with a kitchen.
At that time, the apartment was sold for 12 million yen (about 576,000 yuan), with an interior of 21 square meters and a 2-square-meter balcony to dry clothes. The lighting is not bad, and it is about a 5-minute walk to JR Shin-Okubo Station. There is also a supermarket to buy groceries in 10 minutes, which is good for a suite. But the difference is that the house is a bit old, almost 40 years old.
This friend said that "stable rent collection" is actually the bait thrown by Japan real estate agent, because after removing the management fee of the intermediary company, the annual fixed asset tax, and the renovation fee after the tenant moves out, there is not much rent left in hand......
Friends said that after buying a house, I knew that Japan has "urban reopening law", so urban renewal is done thoroughly, basically more than ten years of houses in Tokyo feel very old, so such a very old small suite will face the following three major risks.
First, the risk of empty rent arrears
We can think about it, what kind of group is such an old and dilapidated child rented to?
In Japan, these small apartments are usually rented by students who have just arrived in Tokyo or those who are relatively economically disadvantaged. Of course, everyone has a different stage of life, and there is no discrimination here, but purely from the perspective of rental investment, if the tenant is relatively unstable, for example, suddenly quitting the rent for some reason, then the landlord will have a high risk of vacancy before finding the next tenant.
In addition, because Japan law is very protective of tenants, even if the landlord wants to terminate the lease agreement without paying the short-term rent, the procedure is very complicated. This leads to the risk of rent arrears.
Second, high management and repair expenses and old equipment
Large-scale renovation in Japan is carried out very thoroughly, and it is likely that the purchase of these small apartments with relatively high construction age will be due to the fact that the houses are old and need to be repaired too many places during large-scale repairs, resulting in insufficient repair funds and additional repair costs.
In addition, the indoor equipment is old, and there is a high probability that the internal equipment needs to be replaced, such as drain pipes, air conditioners, gas stoves, water heaters, etc. On top of that, there are also problems like water leakage, which are the inevitable additional costs of buying an old apartment.
Third, it is difficult to change hands
As we mentioned earlier, because Japan's urban renovation is doing very well, the price of second-hand objects is falling very quickly.
In addition, objects like small suites are all too common, ubiquitous, and lack character. For example, a house type with a 2LDK (2 bedrooms) or more is positioned in the market for families, which will be very attractive to buyers who want to start a family.
However, the purchase and sale of small apartments, the investment color is very strong, the demand for self-occupation is very small, and there are countless similar objects on the market, and there is no obvious added value, so it is relatively difficult to sell.
After avoiding the pit of the small apartment, and then avoid the pit where you can build a building as a charter public with zero principal.
You don't need to pay the principal, as long as you borrow a sum of money from the bank, you can build a building in your name to rent out. An entire building is under your name, and you can instantly go from a hard-working office worker to a chartered company with more than a dozen houses under your name. And the rent is guaranteed for 30 years, and you don't have to worry about it at all after the construction, and the real estate company will directly lease and manage it for 30 years, so you just need to lie down and collect the rent.
Doesn't that sound better than the case just now? But is this really the case?
It is true that the real estate company directly manages the lease completely, but if you look closely, you will find that the lease term is not 30 years, but "the upper limit of the lease term is 30 years".
What does this mean?
This means that the lease term of the real estate is only up to 30 years, rather than the 30 years of full lease management as claimed. There is also a "biennial" clause attached to it, which means that we have no idea when the lease will be terminated by the real estate company.
The contract as a whole limits the possibility of us as a landlord to terminate the contract, but for the tenant real estate company, the conditions for termination are quite lenient. This makes landlords not only disadvantageous, but also unstable, and you really have to be careful of all kinds of words when buying a house in Japan.
In addition, the "vacant rent guarantee" provided by the real estate company sounds very reassuring, but it is common to be more careful with the details of what is written as a guarantee.
For example, when the house is vacant, the rent guarantee sounds like when we can't rent it, as a landlord, we can still have a rent subsidy from the real estate owner. But in reality, there are all kinds of hidden pitfalls.
First, as we just mentioned, the rental income is also subject to the deduction of management fees. Therefore, if the management fee is 10%, then as the landlord, we can only get 9% of the rent, but in some contracts, the management fee is even as high as 2%, and the landlord only gets 8%.
Second, if the occupancy situation is not satisfactory, the real estate company has the right to negotiate with the landlord for rent. Simply put, it's about lowering rent. At this time, it will directly affect the landlord's income. In addition, there will be a renewal period for vacant rent guarantees like this. Generally, it is two years, and after two years, if the lease situation is not satisfactory, the real estate company also has the right to terminate the contract.
Third, in the rental market in Japan, tenants will give the landlord a one-time gift money when they move in, and there will be "renewal materials" for the renewal of the contract, but in this kind of rental guarantee contract, the one-time income belongs to the real estate company. Therefore, the rent guarantee deed actually reduces the risk borne by the real estate owner, and further compresses the real income of the landlord.
In addition, many real estate companies claim that we can manage leases on their behalf, so that landlords can hold Japan properties overseas with peace of mind.
On the surface, it sounds good, but just entrusting the management company to manage it does not mean that we can rest assured, and the management contract must be read in great detail.
In most cases, there is a separate contract for cleaning and inspection of the house, which simply means that it costs an additional fee. In addition, some real estate management companies are very keen on cleaning and repairing the house (everyone who knows it) and will propose various replacements, and the landlord who is overseas may be forced to pay an additional fee if he cannot confirm the situation before and after the construction, or just from the condition in the photos.
Investing in real estate in Japan requires caution, especially from construction to subsequent lease management, which is entrusted to the real estate owner.
This is because such a service may seem hassle-free, but it is not uncommon for real estate to work with construction companies to make investors, i.e. landlords, pay more than the market price. As investors, if we take out a huge loan for construction costs, and then encounter the situation we just mentioned that we are forced to continuously reduce rents and increase management fees to real estate companies, then we will really be stealing chickens and rice. At that time, the landlord may face the biggest dilemma, which may be to break the tail and come out, but the past rental state is not good, so the property may not be easy to sell.
At this time, if you want to replace the real estate company that leases the management, you will find that it is extremely difficult to terminate such a lease contract in Japan. Because Japan law strongly protects tenants, we, as landlords, must have a reasonable reason to terminate a tenant's lease.
For example, the reason that you want to use the property or the poor operation is not enough to legally terminate the lease agreement with the real estate company. The most common situation is that in order to replace these second-hand landlords, the rental management company even has to pay an additional "immediate refund", that is, compensation for the second-hand landlord's exit, which should be a loss of wife and soldiers......
Of course, saying so much is not to let everyone not invest, but to make everyone think twice, if it is as easy to make money as the real estate agent said, then this money will still be our turn to earn?