Property Investment should be like a Business

Property Investment should be like a Business

Becoming financially free is a goal many of us aspire to but despite living in affluent countries many never achieve financial independence. We work for 40+ years, earning several millions over a lifetime but very few become financially free

Most people retire just above broke, often relying on state provided pensions for income.

The desire for financial freedom is the reason many investors become involved in property. However, 92% of property investors own never get to own more than two properties and less than 1% of property investors own six properties. Sadly the majority of property investors never achieve financial freedom. Most business owners, self-employed people, employees and property investors never become financially free.

The ones who do achieve financial freedom do so through owning successful businesses. There is also a group of people who are employees that treat their investments like a business.

One of the best ways to earn more and work less is by owning a business, because the “the tax system” favours business people and disadvantages employees.

Successful business owners understand the system of finance, tax and the law and have it working for them. They realise that it’s not how much money you make that is important but how hard that money works for you and how much you keep that counts.

The average employee earns money, pays tax and spends what is left over; while a business owner earns income, spends money and pays tax on what is left.

So does this mean you need to set up a business?
Not necessarily but what it does mean you need to treat your investment portfolio like a business.
Most small business go broke in the first five years and many of those that survive close down in the next five years.

But some property investors, those who treat their investments like a business, become very, very rich by growing a multi-million dollar investment property portfolio.

They do this understanding “the system” and getting the right type of finance, setting up the correct ownership and asset protection structures and knowing how to legally use the taxation system to their advantage.

We all have the ability to become financially free by becoming property investors who treat their investments like a business.

And you can set up your own property investment business while you are still an employee or self-employed.

What almost every wealthy property investor has done is built their wealth by growing their real estate portfolio one property at a time. While this was going on they lived off the income they earned from their day job. They started off with one property, then leveraged off its capital growth to invest in another and another until one day they found themselves with a true property investment business. One that gave them financial freedom and choices in their lives

The Reiwa Era is here!

The Reiwa Era is here!

This week’s news from Japan has all been about change at the very top. After 31 years of peace, Emperor Heisei (often translated as peace everywhere) has stepped down. The last time a Japanese Emperor abdicated the throne was more than 200 years ago. Emperor Heisei or Akihito, to give him his birth name relinquished the throne on Tuesday, April 30th to make way for his son, Naruhito. Crown Prince Naurhito is now Emperor Reiwa (beautiful harmony).

But what does this mean for the average person in Japan? Well for a start 10 days of no work! Yep, you read that correctly, a HUGE deal for Japan, a country with a word for death by overwork! The planned changing of the Emperor meant that timing could fall within “Golden Week” when four national holidays fall in a row. By adding on a few new days for the new Emperor and the weekends we enjoyed 10 days of no work, quiet morning trains and a real sense of happiness in the air.

How long will this last? Of course no one knows. The new Emperor is being touted as a man of the people. But his people are facing some real challenges. Emperor Heishi led Japan through some of the worst natural disasters the country has ever seen. The Hanshin Earthquake of 1985 and the Tohoku Earthquake and Tsunami of 2011 as well as numerous large typhoons and flooding. And quietly behind all of this, a massive shift of wealth from the many to the few happened during the Heisei period. The Heisei period began in January 1989, and a few short years later the Japanese economic bubble burst in 1992.

As investors, we know that change brings opportunity. The Japanese asset bubble bursting in 1992 sent regular Japanese running from real estate investment, sprinting away from stocks and shares and diving for cover from any bond or currency investing. Where did they go? The average Japanese stuck all their available cash into the post office! I kid you not. Now 30 years later the Japanese post office is one of the largest saving organisations in the World paying 0.000001% interest (my estimate!) to those savers.

So what happened to all the real estate and other investments? Big Business happened. Unlike average Japanese, businesses know the difference between assets and liabilities and slowly bought up as many real estate investments as they could over the years. Leaving the avergae person to ‘invest’ in their own home, which we know is the very lowest investment an average person can make.

So back to our new Emperor Reiwa. He does appear to be a man of the people, he married a commoner, he raised his own children and this article even suggests he did his own laundry!!!

Economically Japan has some real issues around ageing population, restrictive labour laws, ageing infrastructure. But Japan also has real resilience, perseverance and good old gumption.

The Emperor alone does not rule Japan, in fact he has very little power but I for one am looking forward to what Reiwa brings. I know at JPI it will bring more investment in Japanese Real Estate and great partnerships for you, me and Sim.

Join us to “invest together, grow together” in this new exciting Reiwa Era.
Beware of negative predictions

Beware of negative predictions

The media loves to report on negativity and use fear, a very powerful emotion to grab our attention. It’s far more interesting to print `property values will plummet’ than to promote something positive. Friends, colleagues and family can also have this affected on us.

Fear is what can stop us moving ahead.

  • Fear we may fail
  • Fear of being swindled
  • Fear of being inexperienced
  • Fear that the numbers are no right.
  • Fear I might lose everything
  • Fear of making the wrong choice

Many people missed out on the opportunity to develop their financial independence because they listen to these messages.
Try and avoid these stories or research if it really is the truth.
Remember, there is always more than one `property market’ and that each market has different qualities and characteristics.

What do Japanese Tenants Want?

What do Japanese Tenants Want?

So you’re thinking of investing in Japanese property, well done! A great choice. Gentle stable wealth creation awaits you.

But wait… you’ll have Japanese tenants, what now?

A great article this week by Ziv Nakajima-Magen, a friend of ours and fellow investor based in Fukuoka on the southern island of Kyushu. Ziv deals with plenty of tenants and asked the question, “What do Japanese Tenants want?

Take a look at the full article, we will post it at the end. If you are invested in your home country and now beginning in Japan, some good news… tenants across the world want similar things, clean, well maintained property in a great location (differs on the country) with good terms and conditions. Not that hard, right? My UK tenants have different value and expectations to my Japanese tenants but the base is the same.

So what might be different? Well firstly, as Sim and I have written about, proximately to a station is gold! 5-7 minutes walk is fine. Beyond 10 minutes and your potential rental pool just dried up!

Japanese tenants are not that demanding. They will certainly bring their own white goods, light fixtures and even a/c units. Saving you the investor money.

Some things that must be in place to maximize your potential rental field include a washing machine pan. Back in the day tenants would go to a coin laundry or set up a washing machine on the balcony! Now they expect a washing machine pan in the apartment. Autolock and coded entrances are becoming standard. Ironic that in such a safe country these features are sought out, but make sure you have them! Try not to purchase your Japanese rental property on the first floor, these units are much less desirable.

The list goes on but the basis of Ziv’s article is… do your due diligence to maximize your profits! And if you don’t want to do your due diligence, partner with someone who will, perhaps with JPI?

Ziv’s Article is here.

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 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]

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