Over the last several posts we have highlight some of the reasons why investing in the Japanese property market can be positive. Real estate investing like any investment vehicle comes with risks but the risks in property can be difficult to control. Things such as rent not being paid, tenants not looking after the property, items in the house breaking down and needing to be repaired and other issues that can cause landlord’s headaches. In Japanese properties, these issues are often absent.
- Japanese Tenants generally stay for several years allowing a steady source of rental income.
- Tenants usually are very reliable in paying their rent on time.
- Tenants are respectful to rental properties making sure the properties are kept clean and tidy. On vacating properties Japanese tenants will make sure the property is left the same as when they moved in
- By western standards, Japanese units/houses tend to be very basic accommodation. Tenants are required to purchase all white goods and furniture themselves. This even includes ceiling light fittings and fans
- Little protection for the renter at the end of the lease period.
- At the beginning of a rental period the tenant must pay on average a deposit of 2 months rent. Deposits usually are non-negotiable as they are a refundable expense that is meant to cover any damages done to the apartment outside normal wear-and-tear
- Another payment a tenant must make is called ‘Key money’ and is a throwback from the end of World War 2 when the country was rebuilding. It was a gift to the owner for allowing the tenants to live in the owner’s apartment. Although building has long since be completed, the `key money’ payment still exists and usually around 2 months rent
- Other fees charged to tenants include cleaning fees and renewal fees.