For those who are interested in starting a new real estate investment in the Tokyo metropolitan area, we will explain in detail the basic structure, conditions to be prepared, and specific procedures. This seminar is intended for those who already have investment experience in stocks, virtual currencies, investment trusts, etc. The differences from other investments, financial planning, property selection, purchase and operation will be explained step by step.
Real estate investment is an investment technique in which rental income and future gains on sales are earned by purchasing properties for rent. The basic structure of real estate investment is to acquire a property with "personal funds plus loans from financial institutions," and use the rental income from tenants to cover loan repayments and expenses while accumulating profits. The main differences when compared to investing in stocks or virtual currencies can be summarized as follows
Quality of risk: Stocks and virtual currencies are subject to high price volatility and short term fluctuations in asset value. Real estate, on the other hand, is a physical asset that is unlikely to experience a sudden price collapse and is a stable asset with a low probability of falling to zero value. However, risks unique to real estate include vacancy,nonpayment of rent, and property damage due to disasters. In addition, real estate requires regular maintenance and upkeep, and the time and cost involved can also be a risk factor.
Leverage (use of financing): Real estate investment is easy to finance from financial institutions, allowing investors to manage large assets with relatively little capital on their own. Real estate has high collateral value, making it easy to obtain financing and significantly increasing the return on equity. Stocks can also be traded on margin, but the leverage effect is limited, the risk is high, and it is generally not as efficient as real estate. Real estate investments have the advantage of access to financing, but they also carry the risk of interest rate volatility and the responsibility of taking on large amounts of debt.
Liquidity: Stocks and mutual funds are highly liquid because they can be bought and sold instantly in the market, and the time to cash is short. In contrast, real estate requires time and procedures to sell and is less liquid, which is a disadvantage. It is difficult to sell a property immediately in the event of a sudden need for cash, and the price is subject to negotiation with the buyer. In real estate investment, it is important to have a financial plan for liquidity risk based on the premise of long-term ownership.
Tax and insurance benefits: Real estate investment allows you to write off expenses, depreciation, and loan interest at the time of purchase, thereby saving on taxes. In addition, when taking out a loan, it is common to purchase group credit life insurance (danshin), which insures the remaining balance of the loan in the event of an accident to the borrower. As a result, the property remains with the surviving family members, which is an alternative to life insurance. In the case of stock investments, there is no such life insurance function, and in terms of taxes, gains on sales and dividends are taxed.
As described above, while real estate investment enables "long-term stable investment using loans," it is different from other financial instruments in that it involves "low liquidity and the responsibility of managing real assets. Real estate can be expected to provide stable income and preservation of asset value, and if properly managed, will bring solid returns over the long term.
Before starting to invest in real estate, it is essential to prepare personal funds,understand your credit situation, and set clear investment goals.
Approximate amount of personal funds required: ● Prepare a down payment of a portion of the property price.
A portion of the property price must be set aside as a down payment. In many cases, even when financing is available, 10% to 20% of the property price is generally required as personal funds. In addition, brokerage fees, registration fees, taxes (real estate acquisition tax and stamp tax), fire insurance premiums, and other expenses will also be incurred at the time of purchase. Since these fees often amount to approximately 5-10% of the property price, it is necessary to prepare a down payment plus cash for other expenses. For example, for a 30 million yen property, a down payment of 6 million yen (20%) and other expenses of 2 million yen, for a total of about 8 million yen, is a good rule of thumb. The more funds you have on hand, the more favorable the financing conditions (borrowing rate) will be, and the lower your monthly repayment burden will be.
Confirmation of creditworthiness (loan availability)
Before you apply for a real estate investment loan, you should understand how much your annual income, occupation, and assets are worth in the eyes of financial institutions. Generally, an annual income of around 7 million yen is considered to be one of the guidelines for a real estate investment loan. In addition to annual income, the stability of your employer, length of employment, existing loans, and the amount of your personal assets will also be comprehensively evaluated. The standard loan amount is said to be 7 to 10 times your annual income. In other words, a person with an annual income of 7 million yen can borrow approximately 50 to 70 million yen. Even if your annual income does not meet these standards, however, you may be able to obtain a loan depending on other conditions (job stability, amount of personal funds, joint guarantee, etc.). Some financial institutions are active in providing real estate investment loans, so it is a good idea to consult with several banks and undergo preliminary examinations (provisional examinations). If you pass the preliminary screening, you will know how much loan you can get and will be able to find a property that fits your budget.
Establish your investment objectives and goals.
Next, clarify why you are investing in real estate. Is it to generate a steady monthly income as a supplemental income, to build future assets, to replace a pension plan, or as a hedge against inheritance or inflation? The appropriate investment style will depend on your objectives. For example, if the objective is to "generate cash flow in the short term," properties with high rental demand, such as studio apartments in central Tokyo, may be considered. On the other hand, if your goal is to "increase asset value over the long term," investing in a single building or land in an area that is expected to be redeveloped in the future may be an option. It is important to consider your own risk tolerance, and to visualize your target yield (level), investment period, and future exit strategy (timing and method of sale).
It is also important to simulate income and expenditures based on the goals you have set. Factoring in expected rent, vacancy rate, management fees, property taxes, etc., estimate how much you will have left over after loan repayment (not only the surface yield, but also the real yield). If you consult with a professional investment company, they may be able to assist you in preparing such simulations. If you have a detailed financial plan and income/expense plan, you can rest assured that the gap after investment will be smaller.
Real estate investment differs in terms of management style and risk/return characteristics depending on the type of property to be invested in. Let's take a look at the advantages and disadvantages of each typical property type.
Condominium investment (a unit in a condominium):.
This is a method of purchasing a unit (a room) in a condominium building and renting it out. This is a popular first-time real estate investment that can be started with a relatively small amount of personal funds. Many condominiums are located in urban areas with good locations, and if occupancy demand is high, stable rental income can be expected. Another advantage is that the overall management of the building is handled by the management association or management company, so the owner does not have to take much time and effort to manage the property himself/herself. On the other hand, there is a high risk of vacancy; since only one unit is owned, there is a risk that income will be zero if that unit becomes vacant. In addition, in a condominium, structural parts shared with other unit owners cannot be renovated at your own discretion, and you are obliged to pay repair reserve funds and management fees. It should also be noted that there is a limit to the extent to which you are free to use your own judgment, as you cannot make large-scale repairs to the entire building without the consent of the other owners.
Investment in a single apartment building (a single multi-family residential building):.
This is a method of buying and managing an entire low-rise apartment building of wooden or light steel construction, with multiple units in one building, so that even if there are vacancies, rental income is received from other tenants and vacancy risk is spread out. For example, in a 10-unit apartment building, 90% of the income is secured even if one unit is vacant, which is more stable than a condominium unit. Furthermore, owning the entire building gives you a great deal of discretion in management, such as remodeling or changing the use of the building. It is easy to take measures to increase the value of the property at one's own discretion, and renovations can be freely carried out to meet the needs of tenants. On the other hand, the acquisition price of a single building is high, and the amount of capital and financing is also high. In addition, since the owner is responsible for the maintenance and management of the entire building, the owner must systematically accumulate funds for annual property taxes andrepairs to building facilities. Although the burden of running costs is heavier than that of condominiums, the large number of units in a building tends to generate high income when fully occupied, resulting in a high yield. In terms of a future exit strategy, note that while the price of a single building is high, liquidity is lower than that of a condominium unit because there are only a limited number of buyers (investors) who can purchase the property. However, depending on the location and earnings, you can expect to see a profit on the sale of your property at a high price.
Single-family home investment (detached house)
This is a rental business in which you purchase an existing detached house and rent it out as a whole house. The price range of a single-family home is often lower than that of a condominium, and the initial cost is relatively low. Because of its size, family demand is expected, and once you have tenants, you can expect a stable income for a long period of time. There is a strong need for detached houses for rent in suburban areas, such as those with parking lots. However, as with condominiums, there is a risk of zero income when the property is vacant because there is only one tenant per property. In addition, detached houses are prone to remodeling costs such as interior repairs and equipment replacement every time a tenant moves in or out. In the case of a used detached house, it is important to thoroughly check the condition of the building before purchasing and estimate the necessary repair costs in the future. In addition, detached houses are often wooden in construction, and the seismic resistance and aging risk of older properties should also be taken into consideration. Since there is a great deal of variation from property to property in the detached house investment market, high yields are possible if you can find a good bargain, but in some locations, vacancies are difficult to fill, so careful property selection is necessary.
These are the main characteristics of property types. In addition, there are various other types of condominiums, such as studio or family type, new or used, commercial buildings, parking lot management, and private accommodations. Beginners should start with small, easy-to-manage properties such as condominiums and detached houses, and then expand to larger properties such as single-family homes as they gain experience.
The real estate market in the Tokyo metropolitan area (the 23 wards of Tokyo and the surrounding areas of Kanagawa, Saitama, and Chiba) is considered one of the most stable and suitable investment areas in Japan, with particularly strong rental demand. This is due to demographic trends andthe concentration of economic activity.
While Japan's overall population is declining due to the country's low birthrate and aging population, the Tokyo area continues to see a population influx. For example, it is estimated that the population of Tokyo will increase by approximately 410,000 between 2020 and 2035, and the concentration of the population is expected to continue for some time to come. The increase in the number of single-person households in Tokyo's 23 wards is particularly significant: 50.26% of all households will be headed by a single person by 2020, an increase of 460,000 households from 2015. This rapid increase in the number of single people has led to a very high demand for studio apartments for rent.
In addition, according to the Ministry of Internal Affairs and Communications' Population Movement Report, the number of people moving out of Tokyo temporarily exceeded that of those moving in in 2021 due to the Corona Disaster (the spread of telework caused people to move away from the city center), but the number of people moving in returned to excess in 2022. In addition to Tokyo, the three neighboring prefectures of Kanagawa, Saitama, and Chiba will all have excess transfers in 2022, indicating an increase in the resident population of the entire Tokyo metropolitan area. As a result, the vacancy rate in the Tokyo metropolitan area has improved and the rental market continues to be supported by solid demand. In fact, after a year of excess out-migration, Tokyo is once again experiencing excess in-migration, and rental housing in the Tokyo metropolitan area will continue to be an extremely stable investment destination due to the growing population.
Given the above demographic trends, rental demand for properties in the Tokyo metropolitan area is expected to remain strong over the medium to long term. In particular, a wide range of people, including young singles, people relocating to Tokyo for work or higher education, and elderly singles, continue to congregate in the Tokyo area, and there is a certain level of demand for both studio and family apartments. In addition, the Tokyo area is the center of economic activity in Japan, and the number of workers is on the rise. As of 2023, the number of workers in Tokyo will have increased from the previous year, and more than 30% of the national increase will be concentrated in Tokyo. As people flock to Tokyo in search of work, housing needs are also increasing, and the base of the rental market is expanding further.
Even within the Tokyo metropolitan area, real estate market conditions and investment strategies differ by area. Below are the trends in each of the main area categories.
Central Tokyo (e.g., the 5 central wards of Tokyo)
The five central wards of Tokyo, including Chiyoda, Chuo, Minato, Shinjuku, and Shibuya, are areas where corporate headquarters and commercial facilities are concentrated and rental demand is consistently high. There is a wide range of markets, from single workers to high-end rentals for the wealthy, but property prices are extremely high, so surface yields are low. According to recent data, the average surface yield for a single condominium in the five central wards of Tokyo is around 4.3%, which is lower than in other areas. This means that asset value is important in this area, and many investors are aiming for capital gains. Redevelopment projects are active in the central Tokyo area, and a strategy of holding properties for a long period of time with the expectation that asset values will increase in the future can be considered. On the other hand, vacancy risk is low and rent levels are high, making the area attractive in terms of stable income. Those who have sufficient capital and are safety-conscious should consider investing in properties in prime locations in central Tokyo.
Jonan and Josai areas (popular residential areas in the 23 wards):.
Jonan (Shinagawa, Meguro, Ota, Setagaya, etc.) and Josai (Suginami, Nakano, Nerima, etc.) areas are the second most popular residential areas after central Tokyo. With easy access to the city center and an excellent living environment, there is a stable demand for rental properties. Surface yields are reported to average 4.8% in Jounan and around 5.1% in Josai, with slightly higher yields expected than in central Tokyo. A wide range of tenants can be expected, from families to singles, and there is a need not only for condominiums but also for apartments and detached houses for rent. Some stations are the focus of attention due to redevelopment (for example, the Musashi-Kosugi area in the Jonan district), and a strategy of investing in used properties in these areas and increasing their value through renovation is also possible.
Johoku and Joto areas (other areas within the 23 wards):.
Johoku (Kita, Itabashi, Toshima, etc.) and Joto (Koto, Sumida, Adachi, etc.) are areas within the 23 wards where property prices are relatively low. In recent years, the popularity of these areas has been increasing, and new condominiums are being developed in these areas, which are within commuting distance of central Tokyo but are still relatively inexpensive. Surface yields are at a level of just over 5%, with yields of 5.3% in Joto and 5.0% in Jouhoku. Properties near train stations with good access to the city center have low vacancy risk and can provide stable income with a low initial investment. However, in some areas, the population is declining and aging, so it is necessary to assess future rental demand. For example, in the suburbs of Joto (Adachi Ward, etc.), supply and demand differ greatly depending on whether the property is within walking distance of a station or not. It is important to check population trends and development plans for the area and select properties that are expected to be in demand.
Tokyo city and suburban cities (outside the 23 wards, Tama area, etc.)
The 23 wards of Tokyo and major cities in Kanagawa, Saitama, and Chiba (Yokohama, Kawasaki, Saitama, Chiba, etc.) have a certain level of demand as commuting areas to the center of Tokyo. In these areas, property prices are lower than in central Tokyo, so surface yields in the 6% range can be expected. In fact, data show that the average yield outside Tokyo's 23 wards is 6.65%, Yokohama and Kawasaki 6.52%, Saitama 6.68%, and Chiba 6.90%. There is a diverse range of rental needs, including suburban family properties and apartments for students. In particular, Yokohama and Kawasaki have large populations and stable rental demand. However, as the suburbs become more car-oriented, there is a risk of prolonged vacancy periods for properties located far from train stations. It is important to choose a location with convenient access to transportation and an area with a clear source of demand, such as near a university or factory. In suburban areas, there are also areas where future population decline is a concern. For example, there are examples of suburban new towns where the population is aging and vacancy rates are increasing, so it is safe to make an investment decision after investigating mid- to long-term demographics.
In summary, rental demand is strong in the Tokyo metropolitan area as a whole, but there is a tendency to place more emphasis on stability (lower yields) in urban areas and more emphasis on profitability (higher yields) in suburban areas. Consider your area strategy in light of your investment objectives. If you want to invest safely over the long term, choose properties in central Tokyo and popular areas. If you want to aggressively pursue yields, choose properties in suburban areas with potential. In the Tokyo metropolitan area, redevelopment is progressing in many areas, and the attractiveness of the area is expected to increase in the future due to infrastructure development and improved urban functions. Making investment decisions based on the future prospects of the area will lead to mid- to long-term success.
There are many steps involved in purchasing a real estate investment property, from property selection to contract and delivery. For those new to real estate transactions, we will walk you step-by-step through a typical purchase process. Below are nine typical steps
Find and inquire about properties: Find an investment property that fits your financial plan and requirements. Search for income-producing properties on real estate information websites (e.g., Rakutai, Kenbike, etc.) or contact a real estate agency (e.g., a company specializing in investment properties), inform them of your desired area and budget, and ask for referrals. When you find a property that looks good, first contact the real estate agency in charge to receive detailed information and make an appointment for a viewing.
Site visit and survey: Visit the property to check the condition of the building, rooms, and the surrounding environment. In order to assess rental demand, check to see if the property is something you would want to live in from a renter's point of view. Information that can only be obtained on-site, such as the route from the station to the property, the condition of nearby living facilities (supermarkets, hospitals, etc.), the presence or absence of noise and odor, and public safety, is also important. Also, check the property's age, structure, facilities, current rent and occupancy status from the property summary, etc., and consider whether the property matches the income/expense simulation. If necessary, we will request more detailed information from the seller (rent roll* lease contract list, property tax amount, repair history, etc.) through the real estate company.
Purchase offer and price negotiation: Once you have decided that you wish to purchase the property, you will submit a purchase offer (purchase certificate) to the seller. This document includes the desired purchase price, the amount of the deposit, the scheduled settlement date, whether or not financing is available (loan covenants), etc., and formally expresses your intent to purchase the property to the seller. At the same time, we negotiate the price and other terms and conditions. If the seller accepts the offer, you will receive a "Sales Acceptance Letter" and a basic agreement will be reached. Since there may be multiple competing offers for popular properties in the Tokyo metropolitan area, it is necessary to make a decision early and offer an appropriate price.
Apply for a provisional loan: Once the purchase is approved and the property is secured, apply for a provisional loan (pre-screening) with a financial institution as soon as possible. At the preliminary review, proof of annual income (withholding tax, etc.) and assets will be checked, and a rough decision will be made as to whether or not financing is possible. The results are usually available within a week or so, but since the period between the real estate application and contract is limited, a quick response is necessary. If you are approved for a provisional review, you can expect to receive your loan almost as planned. However, since the provisional examination is not the final examination, you should not be overly reassured and prepare for the next procedures.
Explanation of Important Matters and Conclusion of Sales Contract: After receiving an explanation of important matters from the real estate agent, you will conclude a real estate sales contract with the seller. In the Important Matter Explanation, the real estate agent will explain the legal rights of the property and important physical matters (e.g., land boundaries, legal restrictions, equipment malfunctions, etc.). Be sure to confirm any questions you may have at this point. If you are satisfied with the explanation, sign and seal the contract and pay the seller a deposit (generally 5-10% of the price). When signing the contract, also confirm the contents of any penalty clauses and financing covenants (conditions for cancellation of the contract in the event financing is denied). Once a contract is signed, it is basically difficult to cancel the contract, so property inspections and financial planning should be completed by this point.
Selection of Management Company: After the contract is signed, a management company for the property is selected until the property is handed over. If there are already tenants, the seller's management company will often take over the property, but you will also consider your options, including self-management. If you are a beginner or busy with your day job, it is recommended to outsource to a reliable management company. If you outsource the management, the company will take care of tenant solicitation (attracting new tenants), rent collection, handling of complaints, and settlements when tenants move out. Generally, the management fee is around 5% of the rent income. Compare management details and fees from multiple companies and choose the company that best suits the characteristics of your property.
Apply for a loan application: After the purchase and sale contract is completed, you will submit a formal loan application to a financial institution. The bank will examine the property, including the collateral value and profitability of the property, by submitting the contract, a description of important items, and a property evaluation report. If the application passes the preliminary examination, it will usually proceed without major problems, but we will respond promptly to requests for additional documents. If the loan successfully passes the main screening, the bank will contact you with a "loan offer (approval)" and present you with the final terms of the loan, including the loan amount, interest rate, and term.
Signing of loan agreement: Before the loan is executed, a loan agreement (loan contract) is signed with the financial institution. This contract specifies the loan amount, interest rate, and repayment method, and may involve procedures at a notary public's office and a contract with a guarantee company. At the time of signing the contract, you will also pay the financial institution's prescribed fees, such as stamp fees, loan administration fees, and guarantee fees. At the same time, a signature and seal are affixed to the document establishing the mortgage on the property. The loan disbursement date usually coincides with the settlement date of the property.
Settlement and delivery of the property: This is the day for payment of the remaining balance and transfer of ownership. The buyer, seller, brokerage firm, judicial scrivener, and financial institution representatives gather to settle the remaining balance by bank transfer or other means. The judicial scrivener registers the transfer of ownership and the establishment of a mortgage, and the keys are handed over and the owner of the property becomes the owner of the property. The procedures for notifying tenants of the change of ownership and for transferring the security deposit will also be confirmed in advance. After the settlement of accounts, the property will be transferred to the property management company and rental management will begin.
The above is a rough flow of the purchase process. If you have any questions about any of the steps, it is best to consult with the real estate company or financial institution before proceeding. Although there are many technical terms involved in a first-time real estate transaction, the first step to success is to proceed steadily with the support of trusted professionals.
Purchasing a property is not the end of the process; post-purchase operation and management is the critical stage that determines the success or failure of a real estate investment. In order to keep your rental business on a stable track, make sure you have an appropriate management system and risk management in place.
Management System for Rental Management:.
After acquiring a property, you, as the owner, must take over the lease contract, recruit new tenants, and secure tenants on an ongoing basis. You can choose whether to outsource the management of the property to a management company or to manage it on your own. If you entrust the management to a management company, as mentioned above, you have the advantage of being able to entrust the overall handling of tenants to a professional. In particular, if you own multiple properties or are a salaried landlord, outsourcing management allows you to operate without interfering with your main business. In the case of self-management, it is necessary to advertise for new tenants, handle the contract procedures, manage rent, respond to complaints, and settle accounts when tenants move out. Although this requires more time and effort, it saves on management fees and has the advantage of direct communication with tenants. For beginners, it is advisable to first entrust the property to a reliable management company, and then consider whether to move to self-management after becoming accustomed to the operation.
Rent management is also important. It is essential to manage a schedule that includes confirming monthly rent payments, reminding tenants in arrears, and concluding renewal contracts. The management company will take care of these tasks on your behalf and remit the money to the owner on a certain date each month, making it easier for you to plan your finances. Regarding the maintenance of building facilities, periodic cleaning and statutory inspections (elevator inspections and fire prevention equipment inspections, if applicable) should be performed appropriately. In the case of detached houses and single-family homes, tenant satisfaction will decrease if repairs are not promptly arranged in the event of equipment failure. It is also a good idea to have an equipment renewal plan (to manage the useful life of water heaters, air conditioners, etc.).
●Risk management and countermeasures:.
Real estate investment involves various risks, but damage can be minimized by preparing in advance. Typical risks and countermeasures are listed below.
Vacancy Risk: When a tenant moves out of a property, the property remains vacant until a new tenant is found, during which time rental income is lost. Countermeasures include: (1) ensuring that there is sufficient cash flow based on the assumption that vacancies will occur, (2) advertising for new tenants as soon as possible, and (3) reviewing the terms and conditions (rent, key money, etc.) of the property to ensure that they are appropriate. It is also effective to diversify risk by owning multiple units, and to shorten vacancy periods by investing in high-demand areas and property facilities.
Rent delinquency risk: This is the risk of tenants not paying rent on time. The property management company will send a reminder to the tenant, and if the tenant still fails to pay the rent, legal proceedings will be considered. In order to prepare for the risk of nonpayment of rent, it is common to require the use of a guarantee company. The owner can secure a stable income because the guarantee company makes advance payments on behalf of the tenant (the tenant is required to pay the guarantee fee).
Repair Risk: This is the risk of incurring repair costs due to deterioration of the building and facilities. The older the property is, the more likely it is that unexpected repairs will be required. Pool a portion of your monthly rent income as a reserve for repairs in case of air conditioner breakdowns, plumbing problems, etc. In a condominium unit, the management association will be responsible for repairs. In a condominium unit, periodically check whether the repair reserve fund of the management association is being accumulated as planned. The cycle of large-scale repairs and the balance of the reserve fund are also points to be checked.
Interest rate fluctuation risk: If your loan is at a variable interest rate, there is a risk that the repayment amount may increase due to a future rise in interest rates. It is important to consider switching to a fixed rate while interest rates are low if possible. It is also a good idea to set aside funds for early repayment so that you can reduce repayments when interest rates rise. To ensure that you can withstand a rise in interest rates, your income and expenditure plan should include a scenario in which interest rates rise.
Disaster Risk: The risk of damage to the property due to natural disasters such as fires and earthquakes. Fire insurance is mandatory, and the amount of coverage should be commensurate with the value of the building. Earthquake insurance can also be included (although there is a limit to the amount of payment for earthquake insurance, but it will give you peace of mind if you have it). Also, check the hazard map to see if the property is in a flood-prone area, and if necessary, consider disaster prevention measures (e.g., installing watertight panels) and adding an insurance rider.
Legal Risk: This is the risk of changes in laws and regulations related to rental management. For example, there may be future changes in laws that further strengthen tenant protection, or there may be changes in the tax system. You must always be prepared to obtain the latest information and revise your lease agreements and asset management policies as necessary. It is effective to gather information in cooperation with a reliable real estate company or specialist.
By taking the above risk management steps and promptly addressing problems as they arise, rental management can be made more stable. In particular, vacancy and delinquency are serious risks that directly affect cash flow, so be sure not to neglect efforts to increase tenant satisfaction on a daily basis and keep them living in the property for a long time (e.g., regular facility inspections, good communication, etc.).
The key to a successful real estate investment lies not only in the selection of the property itself, but also in the presence of a real estate company that can serve as an excellent partner. For beginners, the support of an experienced and reliable real estate company is a particularly reassuring weapon.
Why is it important to choose a real estate agent?
A real estate company not only introduces and brokers properties, but also provides support in financing and contracting procedures, as well as advice on rental management after the purchase. If the company is trustworthy, it will propose appropriate properties while taking into account the investor's intentions and will carefully navigate through the difficult procedures. Real estate investment is a long-term game, so it is important to find a partner with whom you can have a long-lasting relationship, even after the purchase.
Key points in choosing a real estate company: - Compare several companies and consider the following points.
Compare several companies and focus on the following points.
Track record and expertise: Check how many investment properties the company has handled, its clientele and areas of expertise (e.g., condominium investment specialty, strength in local properties, etc.). For example, some companies have a large number of ultra-high-net-worth clients and a wealth of experience in high-value property transactions. Also, a company with a large number of units under management can be said to have that much rental management know-how.
Reliability and attitude: In addition to a building lot and building transaction license, we also check for a history of administrative penalties and membership in organizations (such as the All Japan Real Estate Association and the Real Estate Fair Trade Council). The response of the person in charge is also an important factor in our judgment. We look to see if they answer our questions accurately, if they explain not only the advantages but also the risks and disadvantages, and if they are not aggressive in their sales activities. If the person in charge is sincere, he or she will be your long-term advisor.
One-stop service: A company that can provide consistent support from purchase to rental solicitation, management, and sale is convenient. If the company has its own management department, you can expect follow-up services after the purchase, and if the company is affiliated with tax and legal experts, you can easily consult with them about tax returns and legal matters. Especially when investing for the first time, there may be a lot of anxiety, so choosing a company that provides thorough and detailed guidance will give you a sense of security.
Real estate company as a partner:.
A good real estate company is not just an intermediary, but a partner in helping investors achieve their goals. For example, if market conditions change after you purchase a property, they may advise you on selling it or purchasing additional property, or suggest renovations to improve profitability. Some companies provide market analysis reports or hold study sessions for owners to exchange information. Having a partner with such a willingness to accompany you will be reassuring even in an area you have no experience in.
In general, real estate investment is a team game. While it is a prerequisite for investors to study on their own, they can approach success with minimal risk only with the support of a team of professionals, including reliable real estate companies, management companies, financial institution representatives, tax accountants, and judicial scriveners. By working with a partner like INA, which is based in the Tokyo metropolitan area and has a wealth of experience, you will be able to proceed smoothly from the selection of a property to its management.
The above is a comprehensive explanation of real estate investment in the Tokyo metropolitan area, from the basics to practical application. Although real estate investment has different attractions and hurdles from other financial products, with careful preparation and the cooperation of a reliable partner, it can be a means of stable asset building. We hope that you will take a steady step forward by developing a plan with a long-term perspective. We hope that you will take advantage of the marketability of the metropolitan area as a residential city and realize a prosperous return in the future.