Co-op Olympia Apartment Building in Shibuya, Tokyo
Editor?s note: Kenneth Arbour, President of Century 21 SKY Realty, has?more than 20 years in the Tokyo real estate and relocation business. Mr. Arbour previously wrote about?what it was like getting his real estate business off the ground in the bubble years?and the secrets of his success, even after the bubble burst. In this article, written in 2007, he gives some tips for buying property in Tokyo. Even though this was written a few years ago, many of these basic rules still apply!
With people looking into purchasing a home in Tokyo, we suggest that they stay in central Tokyo (the Shibuya, Hiro, Roppongi and Akasaka neighborhoods), with a focus on reasonably new properties when possible.
With property values going up in the central area, of course money will go further in the areas outside the JR Yamanote Line train loop. All that said, if a home-buyer only has JPY20 million, JPY30 million or even JPY80 million, they have to face the reality of not being able to afford anything big in Tokyo. Then there are the particulars of personal real estate in Japan including getting nailed with registration taxes, inheritance taxes, etc. Next, potential purchases should determine whether they are buying a property for
living or as an investment. Quite a few members of the international community buy properties they intend to live in, rather than with an eye on leasing them out. It? s good to keep in mind though that you don?t have to stay in Japan once you?ve purchased a property. You can buy it as an investment and then leave the country.
It is almost always a better bet to start with a real estate agent rather than trying to browse on the internet. While an online search might give you a general idea of availability and prices, the devil is in the details, especially when sinking US$1million to US$2million into a property.
As one example of what home seekers are going to encounter, it is highly unlikely they will find a Western-style house he or she wants to live in. Japanese contractors, in general, don? t build these homes for foreigners ? they are built for Japanese tastes. In these cases, expect the ceilings to be too low, the rooms too small, and there will probably be only one bathroom.
One thing that should be understood is that anyone is eligible to buy real estate in Japan.
If you don?t need to get financing from a bank, for the most part there will be no problem. The main problems which people have often heard of involves securing loans from banks. However, that situation has changed tremendously in the past few years with banks loosening their requirements for foreign residents seeking credit.
In general, I would say it is essential that you have either permanent residency or a long-term visa when applying for a loan. If a person doesn?t have permanent residency, banks probably won?t be interested in dealing with you, although some banks will talk with you if you are not a permanent resident. It should be expected that all the banking transactions and documentation will be in Japanese.
Other factors include how much the property?s owner and the banks want to sell. In the bubble era, there was a significant amount of property that just sat there for 5 or 6 years. If an owner really wants to sell it, then they?ll be more cooperative in helping you secure loans. That makes life quite a bit easier. Once financing is secured and you know what you want, there shouldn?t be any problems.
After that, everything related to the transaction can be completed in as short as a month.
Photo credit: Harani0403 via Wikimedia Commons
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