China and Japan on the same page?

China and Japan on the same page?

I wish it were not the case but politics and investing go hand in hand. As a savvy investor, you must pay attention to politics. What is going on in the country you invest in? Who outside of that country can effect change? What will the ripple effects of decisions made internally and far afield effect the investment appetite and opportunity?

Until recently Japan has been very insular. Japanese politicians have been slow to see the need to internationalise at home and welcome ideas from abroad. In my 18 years here I have seen a slow glacial pace change but a change. Japan is accepting more and more change. This week I went to my local noodle shop and the entire staff, 6 in total were Vietnamese! Unremarkable outside of Japan but this is a big deal here. The staff were courteous, welcoming and spoke fluent Japanese. Seamlessly slipping back into their native tongue to pass orders up and down the noodle line. I was impressed with the workers and happy to see the customers not batting an eyelid at the scene.

And so I read this weeks featured article from WRAL.com with great interest. It seems that Japan is reaching out to China, not an easy thing for either side!

Japan has identified closer ties with China as a potential to push a joint economical agenda at a time when the World’s economy is missing direction. It is an obvious move but without understanding the history between these two countries, it is hard to understand the gravity of the talks. It could indeed be beneficial to both sides and I will be watching the initiative with interest.

How can this benefit investors in Japan? Stability, one of the key investment criteria we at JPI continuous promote. A friendlier relationship between China and Japan will better enhance the stability in the region and would certainly benefit both countries. Let’s hope for a positive outcome.

Read the full article here.

Vietnam, why would you?

Vietnam, why would you?

Before you leap to respond, I love Vietnam. Lovely friendly country on the up with hard working people so please, don’t bash me… yet!

Reading this article a couple of days ago and just thought to myself, why do Japanese investors need more help investing in Vietnam? Why would they look to Vietnam when there are cheap, stable investments on their doorstep ready to go?

It all comes down to education. Something that Sim and I blog about regularly. You don’t know what you don’t know. So take some time to learn about the huge number of investment strategies that are out there and then decide. What works for you? What are your absolute must haves or must achieve through an investment? And how are you going to get there?

It is a shame for the Japanese investors that they don’t look around and see the options available in their own back yard. But it is also a huge opportunity for the few enlightened investors to make great solid returns. And of course foreign investors are turning toward Japanese property in ever growing numbers.

Contact me today to see how we can ‘invest together, grow together’ and make a difference in your life. [email protected]

Always follow a system

Always follow a system

We have often explained that building a property portfolio is a slow and steady process. It is not a get rich quick scheme. To make this type of investment effective you must develop and/or follow a system.
Let’s be honest, almost anyone can make money during a property boom because the market covers up most mistakes. But when the market turns the other way many investors without a system found themselves in trouble.

Warren Buffet explains it simply

 “You only find out who is swimming naked when the tide goes out.”

In other words, if you aren’t following a system that works in all market conditions you will be caught naked when the market changes.

Strategic investors follow a system to take the emotion out of their decisions and ensure they don’t speculate.

Now, you might be thinking `How do I develop a system?’ Generally if you are asking this then you need to either educate yourself or hire a professional to guide you.

Embezzlement!

Embezzlement!

What, really? This was a sad article to read from a few weeks back. Daiwa House, Japan’s largest homebuilder has got it wrong in a big way.

News came out that of a suspected US$211 million embezzlement by three employees at Daiwa’s joint venture company based in China. The case goes back to 2015, which in itself is incredible. Daiwa have already decided to write off half of the missing money as it investigates criminal proceedings.

What does this have to do with you and me? Small to midsize investors moving ahead but not quite at the point where we can invest US$211 million! Well as investors, we know that investing alone is lonely and slow. Have a joint venture partner or partners that are on the same path is motivating and fun. However, you must know the person you are investing with, do your due diligence on the property, your joint venture partner and the figures involved. If any of these do not work out, step back and step away if necessary.

Over the years JPI has turned people away because the fit was not good. Perhaps they couldn’t afford the investment or had unrealistic ideas about how the investment would go. Both sides have to be comfortable when investing together. Being honest now save pain later and may mean that when circumstances change, the investment partnership can flourish.

Good luck with the investigation Daiwa, of course your war chest of coins will survive but “Ouch” and don’t forget the due diligence in the future!

Not all properties are “investment grade”

Not all properties are “investment grade”

Not all properties are made equal and not all properties are “investment grade.” Actually, many are not!

Investment-grade properties should double in value every 7 to 12 years which equates to around 7% to 10% annual compounding growth rate. In many countries, however, probably less than 5% would be regarded as investment-grade. This means not every property will double only a select few.

Any property can become an investment – just move the owner out, put in a tenant and it’s an investment, but that doesn’t make it an “investment grade property”.

What items make an investment grade property

  • Appeal to a wide range of affluent owner occupiers.
  • Have a level of scarcity.
  • Are in the right location – one with strong prospects on long term capital growth.
  • Have street appeal and offer security.
  • Have a high land to asset ratio – this is different to a large amount of land. I’d rather own a sixth of a block of land under my apartment building in a good inner suburb of a city, than a large block of land in a country area.
  • Have the potential to add value through renovations.

The most important factor is to focus on quality.

Many of us are not able to find “investment grade property” therefore it is important to seek professional advice.

Japanese Land Prices Rise Again

Japanese Land Prices Rise Again

Official confirmation this week from the Nikkei Asian Review that land prices have risen for the fourth year in a row. And as we often comment, tourism has been playing a major role in the rise.

Predictably Hokkaido and Okinawa saw increases, two of Japan’s most popular tourist destinations. The rises here make these areas Japanese fastest growing real estate markets.

The article says that Tokyo, Nagoya and Osaka saw 5.1% growth, the greatest growth since 2008.

According to the article, the flow of foreign investment has slowed. Whilst that may be true in general throughout Japan here at JPI we do not see any let up in the demand for property in Japan. We still receive the same amount of requests from all over the globe.

One area of real estate seeing a slight dip is new apartments in the Tokyo area which fell 6.7% last month. We always advise our investors to look away from Tokyo. It’s natural to look to the capital for investments, we get that. But JPI will always look for deals with the best cash flow to maximise returns. So join us in Kobe and Osaka to “Invest Together, Grow Together”.

Here’s the full article from our friends over at the Nikkei Asian Review.

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