Land prices are up in Japan

Land prices are up in Japan

If you follow what we do at JPI, this will be no new news. But it is always nice when a reputable news agency agrees with you. This week the Nikkei Asian Review ran a great story on Japanese Property.

As the article confirms land prices are on the up in Tokyo, Osaka and Nagoya and have been so for the past six years in a row. But now we are seeing the increase of land values outside of the traditional investor areas.

While interesting it doesn’t impact the JPI strategy, which is to purchase as close to a busy train station as possible, no more than 7 minutes walk to be precise. But what the latest figures do tell us is that investment in land and property is on the up. Not just the mega corporations either, individuals are buying investment properties or second homes and earning great returns.

Low interest rates and tourism are fueling these off the beaten path investing. There is a well documented lack of hotel rooms and an historic high in tourist numbers visiting Japan, meaning places we have never heard of are now investor hot spots.

But JPI will never chase those shiny new investment areas, instead we will continue to focus on our core area in Kansai and our core tenant profile, single, professional or student. These factors have built JPI up slowly and steadily and we look forward to announcing more expansion very soon.

For now though, enjoy the article, it makes solid happy reading. And when you have done reading contact us today to see how you can ‘invest together and grow together’ with us, [email protected]

Here’s that article;

Osaka is the place to invest!

Osaka is the place to invest!

Sim and I are well aware of the goldmine that is Osaka and Kobe. We will back this up with some big news about a new investment coming up in June. But for now, great to see others getting involved.

As you know, JPI invests in single let apartments, no more than 7 minutes walk from a station. Small, clean, centrally located apartments that appeal to a wide range of good tenants. So why write about hotel investments? Of course, we are a few deals away from being hotel investors. But this week I read an interesting article on direct investment by Best Western Hotels.

Not the only company piling money into Osaka and the Kansai region but an interesting article about the reasons for their decision. In short, Osaka is booming, the World Expo is on its way in 2025. The worst kept Japanese secret is that the first Casino in the country will be built in Osaka. An as more and more tourists repeat visiting Japan their desired locations are spreading, away from Tokyo and Niseko to the more interesting and sometimes more vibrant destinations, Osaka fits that bill.

What does this mean for JPI? Well more tourists, more jobs, more tenants looking for great reasonably priced accommodation. It is a win-win. Contact Sim or I today to find out more;

[email protected]

…and here is the article I referenced about,

Poor old Purple Bricks

Poor old Purple Bricks

Another busy week in Japan. The weather is heating up nicely. Soon though it will be too hot to move!

This week I read, with some sadness the decline of Purple Bricks. For those of you reading that live outside the UK, a quick introduction to Purple Bricks. Started in 2012, at the lowest point in the UK property market, this online real estate agent changed the way people in the UK bought and sold property.

After 5 phenomenal years of growth Purple Bricks was floated on the London stock exchange in 2017 with a valuation of £240 million. Purple Bricks went on to expand in Australia, the US, and Canada. This rapid growth, ultimately would bring about the near downfall of the company.

Though never a shareholder, I followed Purple Bricks as the company the founders disrupted a well-established market in the UK. Consumers were desperate for another option when selling their homes and Purple Bricks was the silver bullet. The initial success and growth in the UK lead to overseas expansion which, in the end, the company could not support. Not quite all over for the company but some hard work ahead to pull things around.

Here at JPI we always talk about the slow, low-risk opportunity for wealth creation that property brings. Purple Bricks was in the real estate sector and should have learnt form the product they were selling. Slow down, due diligence first and then proceed slowly. I hope we see Purple Bricks bounce back, they offered an option instead of the expensive high street real estate agents but only time will tell.

You can read the whole article here and find out more about Purple Bricks by googling them.

There is never a “right” time to invest. Invest now

There is never a “right” time to invest. Invest now

Many people will come up with reasons of why they shouldn’t invest. Every year brings its own unique set of crises and lots of reasons not to invest.  

But so many times the question is asked when is the `right time to invest`? The general answer is:
When you can afford to do so, rather than trying to time the market.

The property market rarely has perfect conditions (high capital growth, low interest rates, high rental yields, plenty of property available; and, relative ease to borrow money from the bank). In addition, it is nearly impossible to accurately predict movements in the property market.

Most countries do not have a uniform market, but instead have numerous markets that operate differently. Even if property price growth for the year is forecast at zero, some properties might drop by 5-10 per cent, whilst others might rise by 5-10 per cent giving a net result of no growth.

Delaying your decision to invest can be costly. If you decide to wait for a potential drop in the market and it doesn’t happen, you could face more expensive property prices and higher interest rates, making it more unaffordable to invest.

If you can afford to invest in a property this year, don’t put off your decision to buy.

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.

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