Here at JPI we are always open to new ideas. This week we came across an article on Korean property investments. Being so close to Korea here in Japan, this is the first time to read about the Korean market. Of course, there must be good investments available in Korea, we’ve just never thought about it before!
Of course, investors in Korean property look for the same thing we all do, great prices, good returns and the possibility of capital gains. We don’t know if all of those factors are in the Korean market but encouraging to learn that foreigners can buy, own and profit from Korean property.
Certain regulations seem to exist in the market but they are not too onerous and can be overcome. This is the same in any marketplace. The reason we won’t be looking seriously at the Korean market simply comes down to local knowledge and expertise. We would need to find a trusted Korean partner to help us access the market.
And of course that is what we do here in Japan, use our extensive knowledge of the local market and extensive network of contacts to help you benefit from Japanese property. We know the market, know the prices and how best to profit here in Japan. Contact us today to find out more, [email protected] or [email protected]
When we started JPI in 2016, we knew we were onto a good thing and ahead of our time.
Before starting JPI we were invested in Japanese real estate as individuals. And our experience in the market for almost 16 years gave us plenty of insights. We knew Japanese Real Estate was a great opportunity and we were right.
We have seen more and more individuals coming to us for advice and to purchase property. Throughout Japan, we have seen small investor groups popping up and a real buzz about Japanese real estate growth.
Now we see overseas investors flying into Japan to purchase great, modern, well-located property at amazing prices.
We also read about more and more companies buying up office blocks, residential towers and other different types of real estate to invest and benefit from.
So not surprisingly this week in the Nikkei Asian Review more news of foreign funds snapping up awesome deals in Japan. Major British and American funds have recently either set up funds or purchased properties some going as far as to purchase existing investment companies here in Japan, no easy task!
Indeed the Norwegian Government Pension Fund purchased five commercial properties since 2017 and intends to purchase more. This highlights exactly how safe, stable and attractive an investment Japanese real estate is.
We are in celebratory mood here at JPI after purchasing our 6th property in just 3 years.
Also somewhat reflective… feeling thankful for how we got here.
Before starting JPI both Sim and I had built our own property portfolio. Small portfolios but enough to get us started and to learn from. Now together in JPI we are building something much larger than we could alone. And at the same time helping others with our knowledge and action to start their portfolios.
But this week it got me thinking, … just what does it take to build your own portfolio. Here are six points to take into consideration if you want to join those that are completely free of their day jobs and in charge of their destiny, read on!
Get started! – easier said than done, right? But you have to move forward and get going. Sim has published about FEAR and the negative effects it has on investors. Do the due diligence but if the numbers stack up, move forward!
Leverage yourself. If you have no access to loans, look for other opportunities to get on the property ladder. Talk to friends and family, see if they will loan you money to get started. Can you find vendor finance for your first property? Or is a service like JPI best for you? We offer low buy-in and great returns to help you save for additional deposits.
Maximise your cash flow. The only way to get to property number 2, number 3… number 10 is to ensure you have positive cash flow from your first and consequent properties. Do the numbers, do they add up now? today? Don’t hope for increased rents, don’t wish for capital appreciation you are looking for growth and that only comes from cash flow.
Increase rents? If or when your tenant moves out can you make low-cost improvements that allow you to raise the rent. A great example, if it costs us ¥30,000 to replace wallpaper but we can raise the rent by ¥5,000, that would pay back in 6 months and from month 7 be all profit, well worth doing.
Manage your properties. Not necessarily fully hands on but ensure your agent is doing their job. If a tenant moves out, turn the place around quickly, start marketing the property as soon as the tenant gives their 30-day notice, ensure the minimum possible void on rental income.
Know when to get out. Not all great properties stay great forever. Situations change, yields can go up or down. So manage your properties. And be brave to sell an apartment that is not producing as well as the rest of your portfolio. Don’t let one property slow your portfolio down.
So just six points to be thinking about as you build your portfolio.
A great article this week in ReThinkTokyo by Mareike Dornhege, well worth your time and I will post the link to the full article at the end of this post.
The article compares housing stock in Japan and China. I learnt there is an astonishing 65 million empty units across China, just phenomenal. By comparison Japan has an estimated 8.5 million as of October 1st 2018. A major difference is of course that the majority of Japan’s empty buildings are old houses in places were few people want to live. In some cases you can pick up a large 3 or 4 bedroom empty house for less than US$20,000. That is great if you are looking for a slower life away from the busy city. However not that many people are.
The continued urbanisation of Japan is exactly why JPI buys apartments where we do in the locations we do. More and more people moving to the city looking for good, clean, affordable accommodation close to the city centre.
It is well know that in the 80s and 90s Japanese economy was the envy of the World, that is until the unsustainable asset property bubble burst so dramatically. Looking at China and real estate investment, it would appear the same is happening there. Young people are buying more and more expensive first apartments. Investors have fueled the bubble by buying property above the actual value. Only time will tell how this ends up.
Back in Japan, land and house prices are rising, slowly, steadily, dare I even say sustainably. Young Japanese and foreigners have access to affordable loans to help them purchase their first home. The results of the Olympic effect will be known in a few years but the upturn is not being attributed to the Olympics as it has in past host cities.
In short, obviously I am biased, Japan is THE place to invest right now. But we investors should remain vigilant and always question opportunities, if they look too good, perhaps they are too good!
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]
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;