00:00:00: We would essentially, I mean one of the best ways that i know to do it is buy something thats already either fully or close to fully tenanted.

00:00:08: Let's say four out of six units have long term tenants in them and then we will quietly start experimenting with vacant unit.

00:00:18: so if its fully tenanted we'll wait for one tenant moveout And if that goes well, we'll slowly expand.

00:00:26: Basically once the long-term tenants see that the place is turning into a short term state property good half of them it's not more will probably not renew their leases when they expire?

00:00:36: Yes.

00:00:37: So then eventually clear out the rest of building for short term rentals aswell.

00:00:56: Either folks and welcome or welcome back to Nippon Trading International's Japan Real Estate Podcast.

00:01:02: I'm your host, Ziv Nakajima again And this podcast is brought you among others by Emil Gorgies of realestate.jp.

00:01:09: He's a Tokyo real estate agent who specializes in serving international or mixed nationality families Who are looking for the perfect family home.

00:01:17: So, Emile is an Australian.

00:01:18: He's been living here in Japan for over two decades now and for about half of that time he has been buying selling and managing real estate properties... ...in Tokyo on behalf his own family and the great many happy clients And also acts as a mortgage broker so he got dedicated loan officers from Japanese mega banks.

00:01:37: And if you're a regular listener of the podcast, You probably already know him from our JREP The Japan Real Estate Experts Panel Sessions.

00:01:44: Which means that your allready awareofthe fact That the man is an absolute fountain Of wisdom on all things related to real estate in japan and In particular To family homes , the greater Tokyo metropolitan area & mortgages.

00:01:57: Most importantly he's incredibly generous with his time and advice which Is more than happy to provide at no cost or commitment to anyone asking.

00:02:05: So If u've been thinking about buying your home in Tokyo, but you've been sitting on the fence for a while or just want to have chat with a real expert.

00:02:13: Drop him online at salesatrealestate.jp.

00:02:18: Hit up today and start exploring.

00:02:35: We're now working hard on the summit's downloads page, we'll have all of these recorded presentations.

00:02:40: The slide decks, the photo gallery and highlights video reel already for you in a couple weeks at most so watch this space!

00:02:59: The in-person venue will be announced as soon as it's locked, and based on your feedback forms which we're now collecting.

00:03:12: It'll probably at the Pullman Hotel.

00:03:15: Everyone who had a ticket should have received this survey link so filling is also put you in the raffle for free tickets to one of next events!

00:03:24: All our organizers, speakers sponsors Blanca Kobayashi from ArcReform Tracy Northcott from Tokyo Family Stays Emil Gorgies from realestate.jp Matt Ketchum from Akiyaz, Alicia Kinwang from Axelodl Capital Shuma Tsuopost and Brett Lee from Akyahab.

00:03:41: Mark Drabkin from Yen Loans John Cross from Mailmate Chai Kanda in the team from Shiki Properties Ben Tanaka from Retire Japan Robert Miller from Innovatious.com And Charles from Tatemono IQ.

00:03:53: We are all very grateful for your support.

00:03:56: Many of you have already attended many sessions on The Summit by now but there were sooo many new faces Both property enthusiasts into industry professionals.

00:04:06: And it was a real pleasure as always to see you all listening, chiming in asking questions and getting answers of course but most importantly meeting chatting and networking with each other.

00:04:17: So we really love this incredible community that's being built and added to every time you hold this event.

00:04:22: And yeah, again very grateful for your support and happy that we can provide this value to both informational but also in more importantly a place for you to meet and gather and meet like my folks Like yourself.

00:04:34: so simply Yeah Thank You For Another Great Event Alright!

00:04:37: So...for todays episode Two back-to-back conversations with first time property buyers In Japan.

00:04:43: This First One Is An Investor Based In Canada And he's targeting multi-unit building investments.

00:04:49: He is open to any of Japan's major cities and going to be purchasing with a combination of both cash and loan that will get back home in Canada, we discussed the strategy for purchasing a tenanted property then switching over from long term leases through short term stays or monthly releases overtime.

00:05:08: so we talked licensing practical management options whether you should target a building that's in mix of residential and commercial units, and whether he is able to at the budget that has got lined up consider smaller cities.

00:05:22: And if so what are the pros and cons?

00:05:25: We also talk about how we might be able leverage such an investment for residency purposes legal accounting considerations maintenance repairs renovations And what sort of yields can you expect to gain from such an investment?

00:05:38: We talk about when he should get started.

00:05:40: What are the next steps, how the purchase process works all the way from initial listings research through due diligence submitting and offer signing a contract and finally settlement.

00:05:50: so real nice deep dive into the multi unit universe in all its various shapes and forms.

00:05:57: enjoy this first conversation.

00:06:02: So I briefly browsed through your email.

00:06:04: I haven't, uh...I was running a bit late so i havent read all of it but i saw that you're looking at the budget over about two hundred and fifty thousand canadian?

00:06:12: And were talking abut multi-unit building mixi?

00:06:18: Yes Okay But Two

00:06:20: Hundred

00:06:20: and Fifty Thousand Canadian What's That in Japanese Yen At The Moment?

00:06:23: That's twenty eight million yen.

00:06:26: You Don't Buy A Building In Good Location In Good Quality For That.

00:06:30: Okay, so like how much do you need then?

00:06:34: They started around before lucky forty million yen.

00:06:39: I'd say normally around fifty million for good ones.

00:06:42: sometimes we get lucky with something a bit cheaper than that but i would Normally assume about fifty million yen.

00:06:48: So that in Canadian at the moment is about four hundred forty five thousand canadian let's call it for fifty with a bit of purchase costs.

00:07:10: yeah that should be okay because we me and my wife do have enough equity.

00:07:18: yep

00:07:20: so i can always pull it out right.

00:07:25: what sort of percentage are you getting from the equity though in interest terms wise?

00:07:31: um I would have to go back and back in the bank because.

00:07:34: but uh maybe five to six percent?

00:07:41: Five to six, well i mean you're only getting if we're lucky five and a bit before tax for that sort of investment here.

00:07:50: so that's almost negative geared right.

00:07:54: But thats like on after two hundred fifty

00:08:02: thousand

00:08:05: right

00:08:13: that's still a little bit under.

00:08:14: you need another hundred or so.

00:08:16: yes, yeah.

00:08:17: So um Yeah one thousand

00:08:19: with loan means he'll be paying about A quarter okay?

00:08:28: Only like a quarter would be finance.

00:08:31: So I'm guessing what about two percent?

00:08:33: Okay, that's doable.

00:08:34: then i get it.

00:08:35: okay

00:08:36: yeah and That's based on the net Cap rate.

00:08:40: being I think most of your videos I saw the lake cap rates above five or me six percent

00:08:46: okay

00:08:47: Yeah so That's just big base.

00:08:50: I think when you do that net cap rate as Based on it being long-term term turn renters right Correct.

00:08:58: Yes,

00:08:58: so if you want to experiment with short-term stay and whatnot yes

00:09:02: Okay

00:09:02: So that we've got a few customers who do that?

00:09:04: So we would essentially I mean one of the best ways That i know to do that is to buy something thats already Either fully or close to fully tenanted.

00:09:13: let's say i don't know four out Of the six units have got long term tenants in them And then We will quietly start experimenting With vacant units Or If it's Fully Tenanted Will wait for One Tenant To Move Out Then Experiment For That Unit And if that goes well, we'll slowly expand.

00:09:30: Basically once the long-term tenant see that the place is turning into a short term state property good half of them If not more will probably not renew their leases when they expire.

00:09:41: Yes

00:09:42: So then it'll eventually clear out the rest of the building for for short term rentals as well.

00:09:48: Yeah so from that...so since we got two hundred and fifty thousand cash Pull out equity for another two hundred and

00:10:02: fifty thousand, right?

00:10:04: Yes

00:10:06: So my question is when I watched your YouTube videos so when it's the net cap rate.

00:10:12: That's net caprate not counting your taxes and The maintenance fee

00:10:19: Maintenance vacancy expenses.

00:10:21: so whenever a property becomes vacant that's when you'll renovate repair and You have a couple of months of vacancy in it.

00:10:26: It's a good location for well for coca city probably not longer than two months or vacancy yourself And then Then you'll be paying for repopulating it.

00:10:35: So there is A bit of an expense that you want to factor in For the vacancy, the repopulation and the repair and the spruce comes with.

00:10:45: So if you have a mixed-use building that has retail tenants on the main floor and then, you know, tenants on top.

00:10:54: Does the retail tenant pay some of your costs for whatever maintenance fee?

00:10:59: There's

00:11:05: two aspects there.

00:11:06: first of all at this budget.

00:11:07: I don't think we'll be able to get too many mixed purpose.

00:11:10: those are usually four million or two.

00:11:12: when For the budget that you're talking about it's going to be a small.

00:11:19: they're called in Japan aparto and there basically Residential units.

00:11:23: There's not many of them with shops or offices on the ground floor.

00:11:27: You could potentially rent out To somebody who is using its commercially like a lawyer an accountant Or somebody who likes to have a residential unit?

00:11:34: And use as an office, but then are different to residential tenants.

00:11:38: It just gives you access to a few more types of tenants at all.

00:11:42: So for that five hundred thousand CAD Budget is.

00:11:47: there's nothing in Japan that I can get like an orita on the bottle

00:11:53: Not in a good location.

00:11:54: No,

00:11:55: oh Okay

00:11:59: To do that you're looking at the concrete building which can be thirty years Or older?

00:12:03: I wouldn't go as young as it would one.

00:12:05: so it can Be a little bit older but its bigger.

00:12:08: So It's gonna be a lot more expensive.

00:12:10: if it's anywhere similar to those locations where we'd recommend it i probably For a decent shape concrete building that might have a shop at the bottom.

00:12:20: I probably allocate more like a million and a half Canadian as a starting point.

00:12:30: If we're lucky maybe you will find something for eight nine hundred borderline age in location wise.

00:12:36: Um, i don't know if Fukuoka but may be Nagoya or very suburban Osaka kind

00:12:43: of thing.

00:12:44: Maybe slightly suburban Yokohama, but not in central or suburban Fukuoka.

00:12:49: I don't think.

00:12:51: yeah cuz I talked to my wife We're we're not too worried if it's been like Central area as long as this and one of those like Those are you know mini zones?

00:13:02: Yeah But he wanted just now you want a big area that you wanted the inner Big City.

00:13:07: she was talking about fukuoka And you were talking about similar cities.

00:13:10: right

00:13:11: yes

00:13:12: Yeah, it'll be very suburban if there will be less than a million and I don't know that we'll find the huge amount of those.

00:13:20: So then If we go outside the main cities is this still good investment or?

00:13:29: It's not going to retain its capital as well something in top five six cities.

00:13:36: but they are places like Kumamoto, maybe Saitama City.

00:13:40: Maybe again suburban a little bit less central Yokohama Chiba city.

00:13:47: They would have good cash flow but as to whether they'll perform well capital-wise or hold their value Would really depend on them.

00:13:53: more macroeconomic thing If we buy in Osaka Fukuoka Probably to some extent Nagoya and Kyoto then We know that will probably at least hold our value and potentially gain in those other cities.

00:14:10: I'm not so sure.

00:14:13: Yeah, because are main two points of why we want to invest it in Japan is a together business management or the visa?

00:14:22: Yep!

00:14:23: And two is too.

00:14:25: Is the cap rate To me's important?

00:14:30: Well for the visa these days you're within the capital range but you'll also need employ a full-time Japanese staffer to meet the business manager visa requirements.

00:14:43: Yes, but that part I'm not too worried about because i just want to buy as soon as they can and then maybe two three years down the track look at it.

00:14:51: okay yeah

00:14:52: so once you've expanded the portfolio on its worth hiring somebody than you'll consider

00:14:57: Yes, I either hired somebody or can buy a pre-existing business there.

00:15:04: That's

00:15:06: an option too and if your company has been running for two three years you could potentially be able to hire yourself as the CEO.

00:15:12: that is also another visa options.

00:15:15: Yeah because my wife and myself background here.

00:15:18: we have been self employed maybe twenty five years.

00:15:24: So i've done like restaurants like hair salons, you know a lot of laundromats corner stores.

00:15:30: Oh nice so that's definitely an option for you.

00:15:32: okay got it?

00:15:33: yeah.

00:15:34: So For me need to set up something there or buy something in Japan shouldn't be too hard though right?

00:15:40: Okay, we don't need to tie into the property purchase.

00:15:43: We're just buying for investment at the moment

00:15:45: Buying for investment where the investment is going.

00:15:48: help with business management visa.

00:15:51: You Know In The End

00:15:53: Yep, got it.

00:15:54: Okay?

00:15:55: Yeah That's all clear.

00:16:00: With again with the caveat that you need to finance a little bit of it.

00:16:06: Sorry yeah yes Yes

00:16:13: How can we assist?

00:16:13: do you want?

00:16:14: if you wanna get started Do you know when you want to pull the trigger?

00:16:17: or do you know When your gonna have financing available?

00:16:21: so my first question is If We only buy Building that it doesn't have the mixed use so there's no like in retail on the main floor.

00:16:32: Can we actually?

00:16:34: Use out building to help with their business man management Visa or does and has to be mix-use?

00:16:41: It doesn't do mixed uses far as I'm aware.

00:16:45: We'll talk to an immigration lawyer when it's time to apply for the visa But this far is.

00:16:48: I'm where whether its retailer or commercial or not Doesn't have much to do with.

00:16:52: if they're companies managing property assets are managing properties meaning You'll eventually, let's say you have two buildings and you hire a cleaner for example then your already within the business manager visa.

00:17:05: Yeah so it doesn't really have to be commercial or residential property.

00:17:08: You need to be managing a property portfolio.

00:17:12: Okay.

00:17:12: So if our budget that I now is out of the budget amount So then I think it's best just to go for like, you know, residential only that.

00:17:29: Yeah

00:17:29: and we can definitely apply.

00:17:32: when we advertise for tenants We could definitely apply two people who want use as an office.

00:17:38: That might get us a commercial tenant.

00:17:41: Okay Makes sense.

00:17:44: And i have one more question.

00:17:46: so My whole point of buying in Japan as soon as I can, so like after we buy there every single year.

00:17:54: I plan to go back to Japan at least once a year.

00:17:58: Yeah So do you have a good network of handyman and stuff?

00:18:04: Of like tradesmen lawyers or accountants

00:18:09: Accountants and lawyers and property lawyers and real estate agents management companies?

00:18:14: yes Handyman in the sense that you can direct them directly as a foreigner visiting Japan, not that many depending on which city.

00:18:25: If they're in Tokyo I've got a handful but other cities need to work with more traditional Japanese repairs and renovation company.

00:18:35: They'll want to communicate with their Japanese face.

00:18:42: But if you're managing the property through a foreigner-friendly property manager or somebody like us, then we'll be able to manage the contractors for you.

00:18:52: Yeah it's just that way I managed my properties.

00:18:55: now is... We hire a property management company now but most of them repairs outside whatever spaces i do myself right?

00:19:14: Yeah, so you

00:19:15: can try but I don't know.

00:19:16: I don' t know that.

00:19:17: have that many professional Contractors or companies to hook you up with?

00:19:22: they'll be able to work quickly directly in English?

00:19:24: I'm sorry

00:19:26: No no it's okay.

00:19:28: yeah then that part parts like oh You know It is ok.

00:19:35: So, I think the first thing to move forward now is if we don't go for a mixed use and it's just like you know whatever residential only what should our budget be then?

00:19:50: For all residential only.

00:19:56: That that's what we discussed.

00:19:57: they started around forty fifty million in so

00:20:00: around four hundred five hundred thousand

00:20:04: yes Yeah, and then you want to put maybe worst case ten percent purchase cost on top of that.

00:20:10: So call it for fifty starting point.

00:20:13: And Then how much?

00:20:14: You know How much?

00:20:15: roughly with the net like cap rate be about

00:20:20: five or six percent Net pre-tax.

00:20:23: if we get a sixth I'll be very happy.

00:20:24: in most cases will be somewhere between Five two.

00:20:26: six is the ones We'll be aiming four and that will enable us to get a younger and little bit better located property Which would help retain your capital

00:20:35: value.

00:20:36: But if it's older and less central then you know, maybe It'll get to six-six in a bit.

00:20:44: but I like To stay Central for the tenant base as well.

00:20:48: If possible.

00:20:50: So up to you there will be A bit of a balance to strike.

00:20:52: we look at different listings And tell me what do You think?

00:20:55: Then can you find us a place that allows Airbnb The entire year.

00:21:05: We'll aim for properties that satisfy, if it's a Fukuoka City then the Fukuokas city requirements will work hand in hand with a short term stay management company.

00:21:13: That knows the area and they will guide us on what buildings we're number one be feasible or easy.

00:21:19: licensing are numbered to be potentially profitable and attractive to guests.

00:21:25: okay because well when I checked online They said uh It depends upon part of your your Japan you're from But some eras only allow Airbnb for like, you know... Only in six months right?

00:21:39: If you want to get beyond the six-months You need apply a hotel or Yocan license which could be feasible with some of the properties we'll looking at if they have space For an automated check and counter In the lobby.

00:21:52: So We'll need to aim for properties that would potentially be able to get a hotel license, and then you can rent out throughout the year.

00:21:59: But every municipality is different in their specific bylaws.

00:22:02: so if we're aiming for Fukuoka or we are aiming for particular city within Tokyo were aiming for Osaka those will be Different companies that will be managing them and different different municipal compliance.

00:22:15: So it'd better find a place which gives choice of the entire year.

00:22:22: Yes, so we'll be aiming for if you want that will be aiming four places That are feasible and could potentially get the hotel license And that's something that will need to work with a short-term stay management company from the get go.

00:22:34: They'll help us screened the listings that will fit that.

00:22:38: Okay, that sounds good then okay?

00:22:40: So then I let my wife know well need it at least Five hundred two thousand CID right?

00:22:48: Yeah, if we're lucky maybe it'll be closer to the four there for hundred four hundred fifty but five hundred would Be a good benchmark.

00:22:53: Yes

00:22:55: Okay that sounds Good.

00:22:58: Okay then where?

00:22:59: We're gonna go away for about a week.

00:23:01: so I think A lot of our long-term account is going to come up in March.

00:23:06: okay

00:23:07: So all have to go into the bank to pull out equity.

00:23:11: yep

00:23:12: Yeah, so I think I'll be.

00:23:14: how have the funds ready by about April?

00:23:19: Okay when that's the case at the beginning of April we can start looking at listings and if We have something that we really like you can pay their contract signing ten percent deposit before The end of April.

00:23:29: right okay?

00:23:29: You know what does it mean a contract signing to two percent deposit.

00:23:35: Contract signing is when the deal becomes officially legally binding.

00:23:39: That's where you pay a ten-percent deposit, which isn't going to be refundable if you back out.

00:23:42: so that only after we've done due diligence on their property and figured it can get the license We know its young enough or has renovation history suitable enough And were happy to proceed.

00:23:55: So that ten percent is when you find a place.

00:23:59: Yes, that's after.

00:24:00: so we would start looking at a short list of properties and working with the short-term stay management companies around The beginning of April.

00:24:06: And hopefully within about two or three weeks We'll have a shortlist of properties that we could potentially submit an offer.

00:24:13: Okay, then once I'd like one Then i'll have to put down the ten percenter.

00:24:19: You will you submit the offer.

00:24:20: if the seller accepts the offer or renegotiates whether the case may be Okay, then once they agree to go ahead.

00:24:26: They'll draw their agent will draw the contract drafts.

00:24:30: We'll review those we'll make sure there are no surprises in there And if were happy Then we'll sign it and pay the tempest and deposit and that about a month or so after.

00:24:38: That months also after that is when settlement will take place

00:24:42: okay?

00:24:43: So April maybe June.

00:24:47: yeah

00:24:48: If you want start earlier with the start of March and then be ready for settlement by the end of April up here

00:24:54: Yeah, we're just gonna go away for about a week

00:24:58: or

00:24:59: so.

00:24:59: We'll come back the March like eight or nine through something tenth

00:25:03: Okay.

00:25:04: Well here let us know when you want to get started?

00:25:07: okay So um when I come back I'll Go into the bank sometime next week.

00:25:13: So and they come back after that ok yeah, so i think pretty much about The first.

00:25:18: second.

00:25:19: second is second week of march

00:25:21: sounds good.

00:25:22: Let's be touching.

00:25:25: OK, that sounds good.

00:25:25: Great.

00:25:25: Thanks very much.

00:25:27: Great talking to you.

00:25:29: Talk to you soon.

00:25:29: Bye-bye!

00:25:33: We interrupt this broadcast to tell you about Tokyo family stays.

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00:26:18: two Japanese business hotels Which if you've ever stayed on one You probably know their tiny there noisy Fine for a night or two if you're on your own, but longer term.

00:26:26: Or with the family You'll probably feel you are in jail cell very quickly In Japanese business hotel.

00:26:32: So If you want to give yourself A sense of space and freedom By renting a real home With comfortable Western beds including all the necessities like baby bedding children's toys high chairs, etc.

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00:27:27: well worth the visit!

00:27:29: And again, if you're in the market for a family home or around the Tokyo metropolitan area and meals your man don't be shy to reach out to him as well at salesatrealestate.jp.

00:27:40: Now back to the podcast.

00:27:42: All right.

00:27:43: So this second call is with a couple.

00:27:45: They are looking for a hybrid holiday home In Hokkaido Meaning that they may also be able to rent out for short term stays when not in use.

00:27:54: How should we look it firstly?

00:27:56: Is an investment in normal sense of word?

00:27:59: where should they be buying, how feasible would short term rentals be in these various locations?

00:28:04: Can they let friends and family use the property?

00:28:07: When does it make sense to purchase as individuals, as opposed to under a corporation?

00:28:12: What would yields look like?

00:28:14: what could affect these yields and how much are the purchase costs.

00:28:17: How do taxes work?

00:28:19: we also talk about how to work with short term stay property managers and how we can help them find this companies or we can assist them with licensing and or managing of a holiday home remotely And how much that might cost.

00:28:31: where in how to find these properties?

00:28:35: What can they even buy with their budget, which is pretty limited only about fifty thousand US dollars.

00:28:40: And in case they do decide on a long term lease rental property investment instead how would that work?

00:28:47: Can the take back ownership of the property at any time and much more so another deep dive this time into the hybrid holiday home slash short-term rental property model.

00:28:57: enjoy this one too and I'll see you once.

00:28:59: last kind

00:29:02: of background who we are and just the start of everything.

00:29:06: So, um... We visited Japan.

00:29:08: what was it?

00:29:09: in January for the first time?

00:29:11: It's been about two weeks there.

00:29:13: We flew into Tokyo then went up north to go basically skiing with Secoe And really like they were a big skier as we ski all around here primarily in Utah, Colorado California and decided we're going to go Japan the first time just ski-wise, try it out.

00:29:31: So looked there he spent about two weeks really like area.

00:29:35: I said okay you can see in the market plan what would look like consideration if these are buying a piece of property up their both for this investment central rental income then also long term that were gonna use into future and have basically a second vacation home there.

00:29:52: so The

00:29:54: personal

00:29:55: reason is we you guys rental property primarily in Texas and Florida.

00:30:00: We live in, Florida but my brother have a development slash rental company that you buy and develop on houses from properties.

00:30:08: so Familiar with how.

00:30:09: We do it in the u.s.. But obviously in Japan's different country.

00:30:12: we live In the us here So It's Obviously A lot Different.

00:30:16: That Is Just Buying and Purchasing Property Here in the US

00:30:20: Right And Are You Locked in specifically on Niseko or is it any ski area?

00:30:28: Be anywhere really.

00:30:29: That's just the one area that we personally visited and Just you know familiar with.

00:30:33: we didn't, you know I Unfortunately to have a lot of time for the entire country.

00:30:37: So i'm not dead set on an area In.

00:30:40: You know there's a lot factors they go into.

00:30:41: if It's more right, you Know rental income based if it's Airbnb ,you know A lot what some market you get a return or just personal use, we might have an idea better of the land than we do.

00:30:54: Okay

00:30:55: well I'm asking because Nisiko specifically...I am told by some local agents that it could be getting a little bit better if you search really hard.

00:31:04: but generally speaking its considered to be kind of bubbly area properties.

00:31:09: there are more then overpriced normally Yeah, and just because it is a very I mean for good reason.

00:31:16: It isn't internationally acclaimed ski resort And there are you know multiple international real estate companies active their like Australians Americans.

00:31:25: they're all there and selling Very aggressively.

00:31:29: so the area does?

00:31:31: The image my image at the moment and then i'm happy to be proven wrong But that the moment we don't have any clients purchasing there because it doesn't seem to be a little bit overpriced.

00:31:42: There are more traditional Japanese ish.

00:31:46: Some of them are getting a bit international ski resorts that are Bit more popular price wise in Nagano if you in Niigata on the main island, not up in Hokkaido.

00:31:59: And

00:32:01: The other thing is that?

00:32:02: If your planning to be renting it out.

00:32:04: so Nisiko Is overpriced but there's lot more friendly to short term stays whereas the local municipality in other areas tends to be a bit more strict.

00:32:14: So, the closer you are to the slopes and definitely if you're within resort grounds meaning there's an owner union and your being serviced by the resort community communal water systems and so forth cleaning gardening those areas would lot of time not allow any short term rentals.

00:32:32: So

00:32:34: if you buy a house that let's say, I don't know thirty forty minutes drive from the slopes.

00:32:39: That could be different story.

00:32:40: But if your looking for this key and ski out experience And will have to look pretty hard To find something that he would be able to rent out again unless we're targeting the seco specifically which is A bit more friendly towards that

00:32:52: right?

00:32:52: Yeah okay

00:32:53: and summer wise I mean some of these areas would have a bit of traffic in the summer, but generally speaking you'd have to work hard on the marketing.

00:33:02: To get people out there other season yeah.

00:33:07: and also generally speaking i'm owning any kind of short-term property am?

00:33:11: You might be familiar with that?

00:33:12: In your corner of the world is basically running a business even if somebody managing it for you you Have to have your finger on the post.

00:33:19: look at occupancy rates vacancy rate's marketing campaigns.

00:33:22: What's the competition doing?

00:33:23: how much should I price it?

00:33:24: four so its not nearly Passive not even semi-passive.

00:33:28: I would say right

00:33:30: Right, okay.

00:33:32: So with all that in mind did you want me to go into your questions there?

00:33:38: Yeah

00:33:39: Exactly yeah.

00:33:39: just Questions on how the market works.

00:33:42: i mean i read saw the videos looked online How it works but

00:33:46: Okay.

00:33:47: so first question That i see There is kind of property be purchased separately by a us corporation.

00:33:52: so yes thats possible.

00:33:54: Corporate upkeep in Japan, not corporate upkeeping.

00:33:58: In the Japanese sense that you have a Japanese entity but accounting and book keeping at minimum corporate tax.

00:34:04: If if the properties are owned by a foreign entity would be at a minimum about two three thousand US dollars a year

00:34:12: Okay.

00:34:14: So I mean it's feasible But is a question of whether your making enough income to justify And if the tax benefits are attractive enough, I'm not sure.

00:34:22: in your specific situation you'd have to consult with a US accountant for that.

00:34:27: But depending on how much should be saving it might not be worth it.

00:34:31: Would say most buyers just personally buy them and put their personal name as an asset or what's pretty typical?

00:34:37: Well, it depends on your budget.

00:34:38: We haven't discussed budget yet but unless you're going for something that I'd say is about four or five hundred thousand US and higher than probably not worth it normally unless they have some huge tax savings in the U S that i'm not aware of

00:34:53: right?

00:34:55: yeah okay um I mean because if we assume something conservative like let's say I don't know five percent uh in a rental income On an annual basis Then you want to be earning at least, I don't know forty fifty thousand bucks for it.

00:35:10: To Be worth paying two three thousand bucks in accounting bookkeeping and corporate upkeep.

00:35:14: so That usually means a property that's closer to six seven hundred thousand Factor in the fact that you can claim a bit more And the fact again You have your tax savings In The US.

00:35:26: then Maybe It becomes More Feasible At Four Five Hundred Thousand But i Wouldn'T Go Lower Than That.

00:35:33: So Thats For Corporate Ownership.

00:35:36: So we can assist with renting to long term or medium-term or short term tenants.

00:35:40: the way would do it so were not an agent.

00:35:43: We don't want other realtor for that purpose of purchase and where not a property manager for the purpose management who are single point contact and consultancy and proxy in English, traditional or bilingual, if we can find one Japanese real estate agent for the purpose of purchase and then will be working with property managers.

00:36:09: If there are property management companies that cater to short-term stays in an area you'll end up purchasing into.

00:36:16: they work on them for their management purposes And using it as just a holiday home.

00:36:23: We're managing this for you and working local cleaners, renovation companies whatever needs done on the ground.

00:36:31: So, yes it is possible but the feasibility would depend upon location and type of property.

00:36:36: if there are property management companies in this area that we can work with depending what local municipality will allow for short term stays because there's a national framework then each local municipality could further stipulate local bylaws they require to comply.

00:36:53: And so if short term stays definitely a must have criteria, then the due diligence will do on properties would look a bit different as opposed to case where you're buying your holiday home and see what we can do with it post settlement.

00:37:05: But If It's A Must Have Then We'll Need To Dig Into Local Municipality Regulations Try To Assess Whether The Property Would Be Feasible For Short Term Stay License Or Not?

00:37:22: If they say the communal areas must be in a certain ratio to the guest rooms, then we can move a couple of walls and get it fixed.

00:37:29: But if it says you can't be within two hundred square meters to school there's not much that

00:37:42: Location.

00:37:43: but you typically know that before purchasing the property.

00:37:46: or does it happen after meaning like are you stuck in a deal and find out later on.

00:37:50: You have the intention of doing short term rentals, but all sudden there's some government regulations in no longer able to use the property that way.

00:37:57: essentially

00:37:57: if the intention is definitely again if short-term stay rentals are must have then we would do that research before we start spending more money on structural inspections, definitely before signing the contract and paying the deposit will want to make sure that what you're aiming for is feasible.

00:38:15: Otherwise it's going to be a waste of money from get-go.

00:38:18: And researching that would cost a little bit of money but not as much... It won't be thousands or dollars.

00:38:24: It'll only be few hundred dollars to find out if opposed to a few thousand for an inspection kind of like.

00:38:37: discuss between yourself if it's a must-have or good to have.

00:38:40: If its'a Good To Have then we'll find the best holiday home that can for you and post settlement will see if we can rent out your term, if not might try rented by month which falls under normal rental.

00:38:52: so there is no special compliance or licensing required in this case.

00:38:56: see what property managers are available in the area, but if it's a must-have then we'll want to check all of that before we proceed further.

00:39:02: That was primarily one of my questions.

00:39:04: anyways... What do you typically see on return?

00:39:06: If you're going to long term or short term rentals is overall say hey!

00:39:11: You were gonna make more money and obviously not live there full time.

00:39:15: It's more vacation home for us anyway.

00:39:18: And than if you make money at its great.

00:39:20: well Are you typically seeing better returns on long term rental then?

00:39:26: So that's very location and property profile specific.

00:39:29: so if we're talking about.

00:39:31: Right on the slopes are very close to the slopes which means countryside cold country countryside, long term rentals would not be a real option.

00:39:41: there is no many people who live throughout.

00:39:43: I mean they work at their resorts with them through out here but they usually residing on resort during this season.

00:39:49: then they might be renting something by demand.

00:39:51: so maybe, but I don't like your chances.

00:39:54: If you're talking about something like Zapoto City for example which is a big city in Hokkaido that's an hour to Niseko and then long-term rentals does become an option And it also depends on whether its house or condo unit Or resort villa.

00:40:13: that will limit our options But also determine profitability.

00:40:17: So if want ballpark figures i'd say In a big city, so let's say one of the top major seven cities in Japan.

00:40:25: So Tokyo Saka Kyoto Sapporo Fukuoka Nagoya Yokohama and those cities we can look at long-term rental returns or something like five maybe six percent before tax.

00:40:38: if you're lucky Your tax your income tax in Japan would probably be quite low If you are only owning a single property?

00:40:47: It could be zero to five percent on every yen.

00:40:52: after the first four thousand dollars, two thousand sorry.

00:40:56: The rates keep confusing me.

00:40:58: maybe five percent of every year and after the First Two Thousand Dollars are very low.

00:41:03: but if you're buying an expensive property in the rental income gets higher than it could be up to Maybe ten fifteen percent.

00:41:09: so net pre-tax I'd say Five or six percent If we're lucky not counting your individual income tax situation.

00:41:17: any unknowns like maintenance vacancies that sort thing I'm short term if it's done in a really good location by your professional management company could potentially double that.

00:41:28: In the best case scenario more likely to be maybe thirty to forty percent above that.

00:41:35: and but again you're running a business is seasonal its gonna fluctuate.

00:41:39: there's going to be.

00:41:40: no.

00:41:41: macroeconomic and microeconomic factors would affect occupancy rates of the race at you can charge.

00:41:46: so That's very hard to assess in advance.

00:41:49: There are people who do that, you know?

00:41:50: That's their expertise.

00:41:51: is the people around the short term stay?

00:41:53: management companies will give you all kinds of assessments but it tends to fluctuate a great deal.

00:41:57: so I can't really...I Can't Really Give You Any Concrete Numbers On That.

00:42:00: Yeah i just gave this ballpark idea.

00:42:02: It also depends on when you'll be using The Property.

00:42:04: I mean if your locking it In for half the ski season obviously thats going To Be Less right Right

00:42:08: Okay Do You Have A Question?

00:42:13: No I Mean Your Ask Big General Questions.

00:42:16: Well, we got a few more.

00:42:17: I can go through down three.

00:42:18: continue going down to your email.

00:42:22: So yes so Yes We provide the services for short term rentals and depending on location long-term residential property managers are More traditional Japanese or there you almost always need a middleman like us To just handle them.

00:42:37: The short-term rental companies, depending on where they are and what kind of guests the cater to could potentially be a bit more international facing by nature.

00:42:47: It's not necessarily going to say that they're gonna be able to cater for foreign landlords directly.

00:42:52: it would just have one staff who just caters to guest.

00:42:56: but there is an option with short term rentals you might need in middleman.

00:43:01: so you can work with a company that does cater remotely in English, same as we would have done.

00:43:10: But to be honest the large part of our work is replacing them when they don't do a good job.

00:43:15: so I can guarantee you'll always be with the same company.

00:43:17: They could going downhill and will bring us into replace.

00:43:22: Yeah, my hope is you know we're not physically going to be there.

00:43:25: How do you pay the bills?

00:43:26: how Do you have a pipe burst in the middle of night?

00:43:29: You know what happens.

00:43:30: it's since we had we handle all that.

00:43:32: yeah.

00:43:32: So when were done?

00:43:34: if you remind me and I've noticed your on WhatsApp as well so i'll send you an email with My.

00:43:38: oh actually i've got your number.

00:43:39: so add you on whatsapp And i'll sent you The management plan selection form which Is what we normally do for people.

00:43:45: so There's basically three plans That go up in price and services Basically basic payment of bills and emergency response or including cleaning in airing once a month because normally you'd want to, if you're not there at least every other month.

00:44:01: mold and humidity are a huge issue here.

00:44:02: so.

00:44:03: You'll want somebody coming in air the place out doing some light vacuuming and wiping And depending on what your end up purchasing If have backyard garden then theres third level which also includes gardening landscaping yard maintenance.

00:44:16: So those are all options that we can fulfill for you.

00:44:18: Yes, and We can assist via a lawyer who will be applying four?

00:44:23: We can't assist with getting the initial licenses as well.

00:44:28: Okay If if again if we go through the initial research when we find it's feasible which is not given.

00:44:34: Yeah

00:44:36: Now if your actively looking at property in Japan You should check out Akia Mart.

00:44:40: That's AKI YA.

00:44:47: It's the Zillow of Japan, built for buyers or actively hunting for a home in Japan and want much more western style web browsing experience than typical local Japanese websites.

00:44:57: Now we've got an exclusive thirty percent off promo code.

00:45:02: That's the one that gives you full access to Airbnb zoning maps, hazard maps sold data and over half a million listings nationwide at any given time.

00:45:11: So if you're serious about buying in Japan and want an easier way to search this is The best tool we know of.

00:45:18: so You can use my code ZIV at checkout And get thirty percent off your Akiyama Art Pro annual plan.

00:45:27: So we don't have a property database again.

00:45:29: We're not realtors, we don' t have a particular list of properties that were interested in selling or anything of that sort?

00:45:34: We work with real estate agents based on your criteria and location.

00:45:38: We worked with local agents or national agents who can service those areas and research based on you requests and criteria.

00:45:47: so there's no actual data base to be had except the entire market database which is pretty big And it includes whatever you want to include.

00:45:55: so single family homes or condo units multi-family properties.

00:46:00: Those start, uh... So you mentioned your budget will depend on the deal?

00:46:05: I need to know what are looking for.

00:46:08: if we're looking a holiday home then there'll be different budgets.

00:46:10: obviously If you wanted purely investment property like a multifamily building that would have been different budgets.

00:46:15: What did you have in mind?

00:46:24: Mostly what our goal is, that we could potentially have this thing pay for itself after our initial investment.

00:46:31: So say your initial investments somewhere under probably right around fifty thousand thirty five thousand and fifty thousand range.

00:46:40: if We find something it's five thousand you can put in forty thousand into It then they'd be great or vice versa If we find something That already renovated And round the price range.

00:46:51: I know that's kind of low for some of the more popular areas, but

00:46:55: it definitely locks you out of Niseko for a start.

00:46:58: Yeah

00:46:58: no there they were like two hundred and five hundred thousand.

00:47:04: yeah so you're talking fifty thousand US dollar.

00:47:06: is that including purchase costs or just the listing price?

00:47:08: because purchase cost can be about fifteen fifteen percent on top of that?

00:47:12: Yes i said someone it's a little bit depending A little bit of the rental, too.

00:47:17: It's like if you could expect to get more on a rental because it is treating like business.

00:47:21: and basically I don't think that.

00:47:23: but sorry i'll have To cut you there?

00:47:26: I would not treat this as an investment or a business.

00:47:28: You're looking at a holiday home That might be covering its cost.

00:47:30: Like john was just saying This Is non-investment.

00:47:33: Japan being japan we can't really count On it gaining in value As well.

00:47:36: so please Don't Think about it like An Investment.

00:47:39: it's.

00:47:39: it's an investment In The sense that it Saves you on Accommodation Fees And Maybe Covers Its Cost.

00:47:46: And that's kind of what we're looking for.

00:47:48: I don't want to have put more money into it after our initial investment, which isn't... That is not always feasible.

00:47:58: Okay so again are you talking about including costs or before cost?

00:48:05: That can be before cost!

00:48:07: So that's about seven and a half million at todays rates.

00:48:15: Fairly old house or maybe if we're looking at Sapporo City, or Otaru may be one bedroom unit plus living dining kitchen area.

00:48:26: If it's a condo and Condos are less of the hassle on the maintenance in unexpected costs but they would be harder to rent out potentially.

00:48:38: Maybe monthly rentals definitely not short term stays.

00:48:40: that's not going to be possible in the condo But they would be a lot easier on the maintenance.

00:48:46: If you want to go for house, it's going to be fairly old.

00:48:49: so I'd factor in something like an average two-three thousand bucks per year just in structural maintenance even assuming that doesn't have any major structural issues which we'll have to conduct a structural inspection before purchase and find out if does or not.

00:49:02: but assumeing there is no major structural issue then i will say factoring about two thousand bucks each annual maintenance of its house.

00:49:09: They're really built last in Japan Once they hit about thirty years of age, which is where your budget is going to take you.

00:49:18: They're going to be deteriorating a bit quicker than what are used in other countries.

00:49:24: so again factoring the couple thousand bucks per year and annual maintenance if it's wooden structure.

00:49:31: And when you say that you're looking at like physical structural components joys framing Correct

00:49:39: Yeah, so obviously it comes and goes.

00:49:41: I'm just talking statistical averages but you'll have five six years where everything's hunky-dory.

00:49:46: And then the roof goes for...I don't know.

00:49:49: forty thousand to replace at all or maybe twenty thousand if is a portion of that suddenly retaining.

00:49:55: wall around property needs to be spruced up little bit there.

00:49:59: leakage insulation issues foundation cracks.

00:50:02: on average we say about two thousand bucks a year when hits about thirty fourty years of age in fits older than that escalate.

00:50:08: Okay,

00:50:10: it's so different.

00:50:10: I don't know how

00:50:14: well except that they're a lot cheaper.

00:50:15: So you kind of expect the maintenance to be cheaper too but it's not.

00:50:24: Yeah New guy.

00:50:25: so with that budget in mind and kind of knowing what we're looking at do You have any suggestions for areas?

00:50:30: We should look to.

00:50:33: Well, I'd first try to zero in on whether you're open to a condo unit or if you definitely want the house again.

00:50:39: A condo units will be easier under maintenance because exactly how much are paying building fees.

00:50:43: they'll go up slightly over time but there's not going to be unexpected thousands of dollars expenses suddenly which we might have with that would definitely have at some point without us.

00:50:52: and then your limited two monthly rentals at best which is not as attractive short-term rentals than not has many tenants available for them.

00:51:01: And so I guess what, i don't understand is the cultural norms for renting like in the US everybody rents that's a standard.

00:51:09: Yeah but and Japan?

00:51:11: Is it the same as that?

00:51:12: similar

00:51:14: long term rentals are not an issue anywhere in japan.

00:51:18: Everybody does that.

00:51:19: But Long-term Rentals will not enable you to use The property because That's A two Year Rolling lease that Is constantly renewed.

00:51:27: Medium term monthly rentals are not the norm here.

00:51:31: no people definitely do that but it's not the normal.

00:51:34: and when we're dealing with condo unit owner unions, they have to.

00:51:37: They can't legally prohibit like a can which short term stays what they can make life harder for property manager and or the guests.

00:51:45: if you don't want kids so come knocking on door late in the evening asking are u air being this unit your not allowed too early?

00:51:53: They don't allow the property manager to hang their key box with a key, too.

00:51:56: The unit outside of building that they just give them hard time in which case property managers won't take it on.

00:52:01: so its not as common and more challenging with condo units without snow but he can really prohibited by this just matter where there will you know find somebody who can manage it and whether we'll fine.

00:52:12: tenants are interested in renting out.

00:52:16: sounds like Basically, you either have to do a long term which is... It sounds like it's two years right?

00:52:22: That's the typical rental rate.

00:52:23: Two years for a long-term tenant.

00:52:25: Yeah but the tenancy laws in Japan are tenant oriented meaning that the lease Is expected to automatically renew at the same rent amount At the end of the two years.

00:52:36: If six months prior to lease expiry You're going to notify the tenant that you want them To move out because your gonna be taking ownership Of the property then We haven't ever been taken to court or even you know, even face serious Opposition from a tenant when we inform them of that.

00:52:53: they're Japanese.

00:52:54: They're pretty docile by nature But they do have a bit of illegal leg to stand on if they do complain about it.

00:53:00: So would normally offer them somewhere between six to ten months of rent as compensation Which is what?

00:53:05: It costs them to move out and relocate to a new property.

00:53:08: Okay Sounds like I might be sure term is better.

00:53:13: I

00:53:16: wouldn't go for long term unless it's a purely investment property and you're not planning to use that.

00:53:20: For at least four or five years

00:53:23: in my head, what would i'd rather see?

00:53:25: And how possible is depending on the area we are in.

00:53:30: How far do want to drive?

00:53:32: but the midterm rental was probably more so when looking at month-to-month trying something like this.

00:53:43: But we could do short.

00:53:44: In that case, if you want to keep that fairly attractive to ten inside maybe aim for the suburbs of Sapporo City or may be even semi-central Sapporo city If That's a reasonable driving distance For You To Get From There To The ski slopes.

00:54:00: I mean to go to...

00:54:03: I'll just bring it up on the map Give me a sec.

00:54:13: So from Sapporo to Niseko

00:54:18: It's like two hours, so yeah

00:54:20: about two hours drive right?

00:54:22: I was like an hour and fifteen or an hour in

00:54:26: thirty.

00:54:26: Which one?

00:54:26: sorry

00:54:28: i think it's called rizutsu Or let me make sure i'm pronouncing even anyone here

00:54:33: blue.

00:54:33: oh do suzu Yeah got it uh Yeah our forty-one at the moment.

00:54:39: maybe there's a bit of traffic but it's about seventy five case.

00:54:41: Yeah, I mean, sorry.

00:54:47: I'm not much of a snow on myself so i can't really provide any feedback on ski resort.

00:54:52: It's the two we want to do some.

00:54:54: i'm sure there's a million other ones over There.

00:54:55: it just you know The one yeah.

00:55:04: So is that too far for You guys?

00:55:08: Um its getting there.

00:55:10: That's probably right at our.

00:55:11: so if it worked out then that would be great.

00:55:20: is finding out how many Rooster to.

00:55:46: yeah same rooster two is about hour forty five again.

00:55:50: Yeah, and actually I mean that town was on my head.

00:55:54: I was actually looking at it on the phone just now.

00:55:58: Well if you definitely want to rent a property out when you're not using it though?

00:56:02: I think maybe the first step before we even start Looking at listings in bothering agents And so forth We should probably find out if we can't find any short term as not short-term sorry monthly or short term, both property managers who can handle that area.

00:56:16: I can't tell you off the top of my head we'll need a bit of research which is going to cost a few hundred bucks for us to dig into but maybe better than starting to spend money on viewings and inspections in what not?

00:56:29: Yes!

00:56:30: Yeah i agree.

00:56:33: I

00:56:35: will reach out.

00:56:38: if I'm lucky he might get back

00:56:41: terrible because we're I mean how many times are going to go there a year versus someone that we can?

00:56:46: you know it's slightly bigger urban city in a sense yeah and its on the water.

00:56:52: well then they've got this like canal, they build up a canal.

00:56:55: so once it's there some motivator if you don't.

00:56:59: Yeah

00:57:01: i'll reach out to a few contacts and see if anybody can recommend a company without having to charge for research but not probably factoring about six hours of about three hours to get a list of companies, and then we'll pause them ask you if how you want to proceed.

00:57:18: And If You Want Us To Then We'll Contact Them With Some Inquiries.

00:57:21: that will be the other Three Hours.

00:57:22: Hopefully by The End Of It Will Be Able To Figure Out Who And What Can Do in That Area.

00:57:30: So I'll Just Give You The Ballpark Figure Six Hours at six thousand six hundred Yen.

00:57:37: so thats About Forty Thousand Yen Which Is About Three Hundred Bucks.

00:57:42: Now i think Okay.

00:57:44: And that would be to find somebody or just the research, begin with?

00:57:49: To research together list of companies and hopefully if they are available to get some initial feedback from them on whether they can handle you directly or whether they need somebody like a middleman or whether They're not willing to take it on at all right

00:57:59: now.

00:57:59: yeah

00:58:03: but I mean when You do remote viewings in Japan will always need to send Somebody With you anyway because The local listing agents Are very traditional in most cases, so they're not going to be able to deal with a scary foreigner on their own when you come over there.

00:58:16: So viewing trip like that will cost more than those two or three hundred bucks anyway?

00:58:22: That's why I'm thinking better find out if we are even heading the right direction before we start pouring money into it.

00:58:30: Do, um I guess overseas buyers?

00:58:32: is it traditional yes to make a trip over there before buying the house?

00:58:35: or has everything primarily done virtually?

00:58:37: The

00:58:37: vast majority of agents will be able to represent you and somebody will have to go there but its not going from overseas.

00:58:44: It'll be if we're lucky from Hokkaido If Not Worst Case From Tokyo.

00:58:49: So, somebody will have to go there in person at least once for the viewings and then potentially one more signing contract.

00:58:56: A lot of agents can handle online signings but some are still a bit old school so they might be second trip.

00:59:07: How does that work with you or your company?

00:59:11: Where do these people come from when saying it could be found in Sapporo.

00:59:17: So we work in one of three ways.

00:59:21: First off, We can just introduce you to some local bilingual foreigner friendly agents.

00:59:25: they'll help You with the purchase and but their job is To make sure everything goes through legally.

00:59:31: so They Can research on properties?

00:59:32: You tell them which One you want to go for it will Make Sure that you can Purchase It.

00:59:35: they're not going to be strategic In most cases or The kind Conversation That we Just had like a Watchout For that might Not Be Feasible.

00:59:42: you Want to watch out for deteriorating Costs Or Whatever.

00:59:45: That's not their job.

00:59:46: So we can just introduce you and leave you with them, but don't charge anything for introduction.

00:59:50: so your welcome to it.

00:59:51: If u want us too come in as consultants.

00:59:54: hold ur hand throughout the purchase.

00:59:55: As u work with that agent which is at the moment eighty eight thousand yen.

01:00:00: thats gonna go up two hundred ten thousand a couple of months.

01:00:03: so thats going be under one thousand dollars For Us To Handhold You Through A Purchase As U Work With The Agent And Then We'll We'll guide you.

01:00:12: diligence will review documents before your sign them to make sure there are no surprises or any costly mistakes.

01:00:17: You're making along the way and just, you know Just make sure you not doing something horribly wrong.

01:00:24: And then The other option is we do everything on your behalf.

01:00:27: that's a few thousand dollars.

01:00:28: That's based in the percentage of the purchase price.

01:00:31: and then you just need to talk to us, and will receive illegal power of attorney document from you allowing us to represent you in Japan fully and then We'll also be handling all of the signings all of them meetings.

01:00:41: talked with lawyer talk to agent so he would just make bottom line decisions and talk to ask.

01:00:46: okay

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01:02:57: Then when you were saying like the acquisition cost would be separate from the cost.

01:03:07: Acquisition

01:03:08: costs are fifteen percent on higher budgets if you're talking under eight million yen, oh You're almost there.

01:03:14: so I'd say yeah worst case about fifteen percent.

01:03:18: Purchase costs regardless of us.

01:03:20: So If your hiring guys for just consulting that's not going to change the percentage much.

01:03:24: But if you hangers do everything On Your behalf then add About three four percent on top Of that.

01:03:29: okay and That Yeah?

01:03:31: That's what i was trying To double check.

01:03:33: yeah but we Do have a minimum um of five percent of ten million yen.

01:03:39: so if the property you're purchasing is less than ten million which is The budget that you are aiming for, it's a bit less than that then It's probably more like seven eight percent four.

01:03:48: If You want us to do everything on your behalf?

01:03:50: The consulting is just an hourly retainer.

01:03:52: That's always going to be under a thousand.

01:03:54: No and most likely Just in our scenario I'd Like To Be involved.

01:03:58: So i would Probably Want The Handholding Thing

01:04:03: Easier for us because that can be just me.

01:04:05: I don't need to use any of our Japanese stuff.

01:04:06: That's why it's cheaper and we can do that anytime.

01:04:09: Perfect, right?

01:04:09: And then i guess uh...I Don't think was clear in my question.

01:04:13: so Who?

01:04:14: who is viewing the property and kind of assessing It?

01:04:18: how did you find that person as Is that the agent?

01:04:21: or

01:04:22: So the buyer side agent that will put You in touch with?

01:04:25: We'll Be able To either attend In-person Or they'll have colleagues in The area that They Can send over For that purpose.

01:04:31: But please be aware that those viewing trips again cost money.

01:04:34: That's regardless of what they charge on settlement They will charge for viewing trips especially I mean if you're buying in Tokyo and their based in Tokyo, they might not charge.

01:04:42: and similar If it support a city but anywhere that they have to travel till You'll have to pay them for the troops.

01:04:47: And do you?

01:04:48: Have a gut feeling at day if we find somebody in Sapporo City What it might cost to go out did something like that is that a couple hundred bucks a day or

01:04:57: a day out would probably around Hokkaido at the output probably be around I'd say four hundred bucks hopefully bit less than that if but we want to use their time and your money more efficiently.

01:05:11: so will try to line up for five viewings.

01:05:13: Yeah, exactly.

01:05:15: No point in getting them out like four hundred bucks per pop for each and every property.

01:05:21: My other question too is more about funds because obviously we have a USD bank account here as you know.

01:05:25: how are those funds transmitted?

01:05:27: Is it cause the Japanese bank account...

01:05:31: You can't open it if your not resident yet.

01:05:36: So for the purchase, you'll be wiring funds directly to the agent and the agent will distribute it domestically through their seller's agent.

01:05:43: The lawyer or the seller wherever needs to go For ongoing management.

01:05:48: we need a retainer held here To pay your expenses from And let us know when its just about to run out.

01:05:53: Then you can top that up.

01:05:57: If there is income involved We will collect the income on our behalf.

01:06:00: Tell me if you want it sent back home.

01:06:01: Yeah, oh and is that?

01:06:09: I guess we could do it again.

01:06:10: You can get in the inner

01:06:13: UST?

01:06:13: It doesn't matter.

01:06:13: Um i mean for smaller amounts.

01:06:15: i'll send you if once were connected on whatsapp.

01:06:17: just remind me i'll Send you a referral.

01:06:19: links to wise If you don't have an account with them yet.

01:06:22: And two all effects which is a company That handles bigger remittances because wise are not super efficient Once you get over twenty thirty thousand.

01:06:31: with those two, I mean we'll both get some bonuses if you use our referral links.

01:06:35: With those two will usually manage all of the smaller and bigger expenses.

01:06:40: so you send in dollars then they pay in yens at the other end and vice versa?

01:06:43: Yeah

01:06:46: okay make sense give me more questions.

01:06:50: um no i think really me and you need to have a talk.

01:07:02: Just as a side note, we're very happy and do manage short-term and monthly state properties for clients who really need that.

01:07:08: But I would look at potentially just getting it placed so you can use because It is a handful to manage these properties remotely And constantly be dealing with property managers.

01:07:24: Incase of a condo with owner unions in case over resort property would honor unions for the resort.

01:07:30: Incase have stand alone house with renovation repair companies on regular basis and if you're renting it out, do also need to keep it in better shape than if your just know.

01:07:38: if its just using get you can let some stuff go for few years but you will need two be on the ball.

01:07:44: so when u saying cover costs.

01:07:48: You talking about this is incase of condo unit average for a studio or one bedroom living dining area apartment kind of thing, you're looking at something like let's say fifteen thousand yen per month times twelve.

01:08:04: You are looking at two-thousand bucks a year in costs including your annual property tax right?

01:08:13: Just figure out if that is really something to cover the cost of dealing with rentals and not.

01:08:20: If it's house then maybe this becomes bigger issue but Definitely for a condo unit.

01:08:24: It's not huge

01:08:26: and I guess that's true.

01:08:26: So, uh-oh was I'm imagining in what i do here That it's larger number because i'm getting a mortgage.

01:08:33: Um With that you're only covering maintenance cost people checking in And taxes.

01:08:43: What?

01:08:46: What does that total number look like?

01:08:48: and i guess that where i didn't even start i'm just thinking percentage basis instead

01:08:53: Return you mean

01:08:55: no like it.

01:08:56: What would we be putting in every year if we didn't rent?

01:08:59: if we just had it for us.

01:09:03: If it's a smaller, I'm thinking Sapporo City or Otaru condo unit?

01:09:11: I haven't checked condo units in Otaru.

01:09:13: usually people buy more houses there but i'm assuming... In the pictures im seeing that our condos are there.

01:09:18: so condo is in Japan.

01:09:20: if its studio one bedroom apartment and building between twenty to thirty years old which is usually sweet spot where you buy them I would say about two thousand bucks a year.

01:09:32: But you're saying that's in taxes

01:09:35: or... No, no!

01:09:35: That is building fees.

01:09:38: Taxes for condo units are pretty low.

01:09:40: if you buy them this cheap it will not be more than two hundred bucks per year.

01:09:45: worst case usually less then that.

01:09:47: Okay.

01:09:47: so we'll say twenty-two hundred there and when somebody goes doing the monthly air out just kind of looking around type deal?

01:09:58: That's if you do need that.

01:10:00: again, I don't know how often you're going to be at the property.

01:10:02: But If your not there for more than two three months a year then yes You would need that?

01:10:06: That Would Be and i mean For Us To Manage The Property For You Is Also Going To Be About.

01:10:12: Hang On Let Me You Know What.

01:10:13: let me Just Share My Screen And I'll Show You Are.

01:10:16: Yeah Because I Guess One Question We Didn'T Ask.

01:10:18: It'S Really Actually Super Important As what The True Cost is and yeah we're Trying To Make.

01:10:24: I'm just

01:10:27: Give me a sec.

01:10:27: I'll just share my...I'll send you that file later as well, but let me for now to share my screen and quickly go through it.

01:10:35: if You're only gonna make five fifteen hours of week of work Five thousand bucks is like nothing.

01:10:44: Hang on.

01:10:51: So this is us.

01:10:52: we were kind of a concierge type full-on service company, there are cheaper companies out.

01:10:58: There's definitely a company that'll just pay your bills for about fifty or sixty bucks per month.

01:11:04: so they will handle the utility bills and owner union fees you can get for fifty to sixty bucks a month.

01:11:13: with us it is about fifty to sixteen bucks if its only payment of bills insurance and so forth.

01:11:20: similar pricing If you do need the cleaning, then we go up to about a hundred bucks a month.

01:11:27: But that's aside from whatever the cleaning company will charge okay?

01:11:31: So they will charge at least fifty bucks per visit potentially depending on where the property is potentially more than that.

01:11:41: So that brings it up to maybe four thousand bucks a year.

01:11:45: I think.

01:11:45: worst case

01:11:47: yeah.

01:11:50: If it's a condo unit, though we do need to charge you an extra fifty bucks monthly because the owner union require constant correspondence.

01:11:56: They're bit of pain in about.

01:12:00: Okay.

01:12:03: So then what?

01:12:03: We are talking about five thousand dollars a year.

01:12:07: I'd say less than that.

01:12:08: so if we're looking at Let's let us run the cost or your typical condo units would be.

01:12:16: If it's a studio one bedroom will hopefully not be more than let's say, Let's take worst case.

01:12:21: estimate twenty thousand yen a month.

01:12:24: Our monthly fee if its a condo is eight thousand assuming we also need the cleaning that another Fourteen five and then the cleaners.

01:12:35: Let's see Hopefully not more than that but conservatively I'd say about ten thousand yen if they come in every month, but we probably don't need to come and more than once every two months.

01:12:46: So I'll have that forty seven five times twelve uh five seven i mean at current rates it's actually a lot less.

01:12:56: then what?

01:12:56: I thought But I mean US dollar could tank on.

01:12:59: the Japanese yen could soar.

01:13:01: haven't seen them in awhile ,but It Could happen.

01:13:03: .So At The Moment That'S About Three Thousand Six Hundred A Year.

01:13:11: Okay Yeah, like four hundred bucks a month.

01:13:19: Yeah

01:13:19: So if that's the cost that you really want to cover then we can look into monthly rentals.

01:13:23: If it's a condo unit and if it's house The expenses will be higher.

01:13:27: so there'll be similar Expenses on the monthly end or our end.

01:13:31: but then you have maintenance and structural strengthening too constantly thinking about And potentially yard maintenance depending what kind of property by.

01:13:40: yeah

01:13:45: Okay

01:13:46: I think we've given you enough to think about for now.

01:13:49: Yeah, exactly so.

01:13:51: But what your saying before though?

01:13:54: with a condo unit?

01:13:55: It's probably not gonna be possible to do short term.

01:14:00: Short-term definitely not monthly if we're lucky maybe.

01:14:03: Okay Sounds like bed and rods.

01:14:07: but I mean long term is for investment property.

01:14:09: If you planning to be using it the long term Is not really something you want to get into.

01:14:14: yeah

01:14:20: The other option is just to buy an investment property and use that money for your accommodation when you come over.

01:14:25: That's exactly

01:14:25: what was going through my head at this moment right now, but eventually if we decide we want to go there stay there for longer We could switch up our game plan.

01:14:36: Well long-term Just give me the numbers.

01:14:39: If were buying something For about fifty thousand yen Let's call it plus cost.

01:14:44: so let's sorry.

01:14:45: fifty thousand bucks Plus costs thats fifty seven five hundred.

01:14:49: if we can get about five percent return from it, that's like two three thousand bucks a year in income.

01:14:57: So there could be.

01:14:59: I mean at least the flight tickets hopefully i don't know.

01:15:05: yeah i think you're better off doing short term because the amount period of dumps would be grand and nearly making them short-term.

01:15:11: then we're gonna have to have more maintenance costs and more cost all the way around.

01:15:18: We'll talk about it amongst ourselves and

01:15:20: then

01:15:21: kind of get back with you.

01:15:23: And we'll see.

01:15:23: if we need to look for a short-term rental company, go from there?

01:15:31: If not...if don't do the short term rentals most likely will probably just purchase it.

01:15:36: hold on to try use that.

01:15:40: Sure!

01:15:40: We're happy to assist either way.

01:15:42: let us know.

01:15:44: Yeah, best in due by WhatsApp because I have worked with suppliers overseas all the time.

01:15:48: Yep.

01:15:49: Yep.

01:15:49: I'll add you on what's up and send your little emoji right now?

01:15:51: Yup Perfect will be connected there And then just remind me if there's any further info.

01:15:56: You want that form or of the links to sign-up without effects so whatever Just let me know they're.

01:16:00: and then i guess i do Have a question.

01:16:02: So um we We have A relatively good sized friend group.

01:16:07: If our friends were gonna go over There and we had it set Up for ourselves and they wanted to use it.

01:16:14: Is that hard-to do?

01:16:18: No, there's nobody business.

01:16:20: you're not officially renting out.

01:16:21: if they happen to help with the utility bills between them.

01:16:24: so I mean... They might get a knock on their door from the owner union once in awhile asking who are we doing here?

01:16:30: We need to fill into form for safety reasons.

01:16:36: when somebody is staying at the unit what can be contacted.

01:16:40: But otherwise, it's nobody's business.

01:16:41: Nobody can prohibit that.

01:16:43: so and now That was gonna be my question.

01:16:45: So if there is our friends say we have six different people that went over their one year would with that draw Questions to the owners union?

01:16:56: or would they?

01:16:57: It wouldn't

01:16:57: yeah I would definitely draw questions but There's nothing They Can do about it And its your friend.

01:17:01: so they're not too fast.

01:17:02: If somebody knocks on door and Say are you renting it Airbnb?

01:17:05: they say no when it's done right.

01:17:07: Yeah, okay.

01:17:08: Especially when everyone of us is American.

01:17:13: We'll have to see if we would do

01:17:16: that... If you can pull it off?

01:17:18: That might be the best in both worlds.

01:17:20: I'd say!

01:17:20: Just get a condo unit and just rent out your friends while they're not

01:17:24: there.

01:17:25: Yep.

01:17:26: We will need to see what works because generally-

01:17:30: Just don't advertise online ok?

01:17:32: Just keep it grapevine kinda.

01:17:35: yeah

01:17:36: Yeah, I get that.

01:17:37: I mean Airbnb and such won't let you list anyway without a license but even on your own booking platforms if somebody the owner union is a bit savvy in English they find out that you are advertising it for rent?

01:17:49: You'd probably be in trouble!

01:17:53: Okay um... Let me talk with him and then Bessie if you can send everything by WhatsApp just info this way to communicate.

01:18:01: Yeah, I'll add you on there now and we will have to jump out into another call in a minute.

01:18:05: So thank-you for your time And let me know how do want to proceed?

01:18:08: We'll be untouched on whatsapp.

01:18:10: i guess my last question real quick is sure.

01:18:12: so To find these Apartments if i wanted to go look for otaru i'm gonna Go just search online and find them and then he would send.

01:18:21: we start working that way.

01:18:23: or what's your suggestion?

01:18:24: yeah

01:18:24: You can send us listings that you find online.

01:18:26: Do you know where akia mart?

01:18:32: I'll send it to you on WhatsApp now.

01:18:33: And also give you a discount code.

01:18:35: It's worth together subscription, i think its only fifteen bucks per month.

01:18:39: What they do is scrape all of the major property portals in Japan and present them as Zillow like English interface with map drill downs and filters.

01:18:47: Its really good website for that.

01:18:49: That where most our clients find their listings.

01:18:52: Okay perfect.

01:18:52: so it better us bring new listing.

01:18:56: Yes, I'm always happy to give you my two cents about them.

01:18:59: But as long as you're not an engaged client there's a limit on how much they'll be able do.

01:19:03: but once we start working together whether it is consulting or full purchase facilitation whatever would want to do then i am always happy tell what think of that help filter prioritize and when were locked in the shortlist will float back into agent to make inquiries on.

01:19:18: Perfect!

01:19:18: I understand completely.

01:19:19: ok got it.

01:19:23: Thanks for your time.

01:19:24: talk soon.

01:19:24: Okay,

01:19:25: thanks so much.

01:19:26: Bye-bye!

01:19:28: So there you have it two very different buyers to vary different sets of goals.

01:19:32: Hopefully this brought some value to you whether You might be on your Japan real estate property journey beginning or the middle of It and again watch This space which means subscribe And follow this podcast or YouTube channel if you'd like To Be notified once The spring summits downloads page is ready in a couple Of weeks time?

01:19:54: Thank you all for joining us at the summit.

01:19:56: We had an absolute blast!

01:19:59: Now, we can't let you go without telling y'all about Yen Loans our latest sponsor.

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01:20:13: So definitely hit them up if your looking to purchase in Osaka Fukuoka Kyoto or any big city too And that's for any purpose, whether it's a whole day home investment rental or combination of both without any requirement.

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01:20:36: so reach out them through the link on our show notes an.

01:20:38: let me know what do found him under Japan real estate podcast And if you're quick enough to be one of the first ten completed applications, And that's it from us for this episode.

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