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Real estate investment can be divided into two large categories: Income Gain, purchasing a residential or commercial building and renting it out for rental income, or Capital Gain, purchasing a property with the intent of reselling it at a higher price.
There are many attractive real estate investment opportunities in Japan for residential units or entire buildings which may already have a stable rental income. Since there are no restrictions for non-residents to purchase property in Japan, with the right information, becoming an investor in Japan can be relatively smooth and easy for foreigners.
There are many pros for investing in Japanese real estate including having a stable political system; low to moderate transaction costs for purchasing a home; low effective rental income tax, and mostly a strong rental market in Tokyo.
Due to the strong rental market in Tokyo, obtaining a investment property with the purpose of an income gain is recommendable. In Japan, it is possible to purchase a unit that has an existing tenant, referred to as an “owner-change”. This allows you to generate revenue immediately when the property has been transferred to your title. Another option is to purchase an old property and renovate or rebuild it, and then sell or rent it out. For this option, it is advisable that you understand all of the legal restrictions involved with the property and land as Japan has many strict building standards, height restrictions, etc. Please feel free to contact us if you are interested in learning more about these processes.
Jumping into real estate investment opportunities in a foreign country can be overwhelming when local real estate norms and legal systems are not fully understood, compounded by cultural differences. In order to minimize risk, you must fully evaluate and understand the property and the yield and/or capital gain opportunities before making your investment decision. At Japan Sotheby’s International Realty, our real estate professionals can navigate you through this entire process so that becoming a foreign investor in Japan can be a stress-free process. Please feel free to contact us for questions or consultation.
