I am moving from Aichi where the rent is cheap to a new job in Tokyo.
I have been thinking of buying an apartment as a place to live, rent out later and eventually sell.
I am aware that property in Japan tend to depreciate, this is definitely the case in Aichi/country side. Are things different in Tokyo?
How do property owners make it profitable if for example, they have to destroy and rebuild every 20years or so?
Where can I find information about the market/strategy?
I appreciate your input.
7 comments
My feeling is as long as it is nearby a popular station you should be safe. But I’m no expert really.
You’ll have to do a lot of research about the exact property you’re considering. While Tokyo is generally stable, the dynamics change from ward to ward, and town to town. Some areas are developing now, some have fallen out of favor, some have plans for development that aren’t publicly known.
I recently bought a house with my partner, and we both do real estate on the side (both houses/apartments, both here and in the US) and each purchase was different. Our house was more a goal of getting out from under rent with a chance to profit on a building that won’t depreciate as much as most others. With the apartments they’ve mostly been in more budget areas, looking for places that are a bit old but generally well maintained so that a bit of renovation can make them feel new.
Buying to sell is one set of parameters, buying to live in yourself is another, and buying to rent out is yet another. Finding a place that won’t actively hurt one or both of those goals will be very difficult, and if you try to do all three you’re almost guaranteed to lose money.
r/japanfinance got plenty of information on it. Check the wiki especially.
>I am aware that property in Japan tend to depreciate,
Who told you that? Mansions near major stations are going up in value all the time. Our place is still worth the same it was when we bought it 2 years ago.
Depreciating housing prices are how it should be. In a good economy (good for people not for profit) land would not gain a lot of value above inflation and houses obviously depreciate with age and use.
That’s one of the major factors keeping housing semi affordable in Japan.
Not saying Japans economy is good for average people. Just a bit less shit in this specific area.
> rebuild every 20 years
no no no, more like 50 years and then buildings that are being built now are much better quality.
A lot of books are written about real estate markets and investment strategies but they are mostly useless. Real estate is local, specific, and concrete. The best way to learn is to view a lot properties for sale and then look at properties for rent in the same building and nearby building for comparison.