Buying a Mansion in Tokyo For Cash

11 comments

1. I’m considering a similar move and am in an almost identical situation. Replying here to be alerted when replies arrive.

2. We just bought a 2DK in Tokyo weeks ago. Similar situation as yours immigration wise. Our eldest child lives there so it’ll always stay occupied and we have someone to take care of bills, taxes etc. The real estate agent is wife’s brother in law, and the general contractor is an extended family member, so that was easy.

   The situation with inability to open a bank account as a non-resident (even if one is a Japanese citizen) is comically bad. It would have been an even bigger hassle without having someone there helping to keep the property in good shape and all bills paid for. We had the added bonus of extended family who helped with the purchase and renovation. If you have none of these options, it’ll be a real hassle.

3. Are you looking for 新築 or 中古 as well? I’m guessing Japanese is not an issue since your wifi will help out/manage?

   Depending on this you should directly contact a real estate agent or directly to the building management company (ie. Brillia, Leven, etc.)

   This said, this is not different to the “standard” process, and I’m not sure if you would be “encouraged” to go for the loan route despite having the cash for 新築. I would ask them but at the end of the day the payment is a transfer and if you have the money…

   For 中古 definitely you can pay cash (現金一括)

4. I would do a lot of research into the areas, buildings and relevant sales comps – there is a lot of fleecing foreigners into buying in areas or buildings that are not nearly as premium as they think (eg. people hear Shinjuku, recognize the name and think it must be a high end area… it generally isn’t).

   A good area is no more likely to see depreciation, in fact the opposite. Most areas have seen strong capital appreciation over the last decade.

5. Agents publish ads at least on athome.co.jp or suumo.jp.

   If the management society is Incorporated, they can seize the rooms and sell them by auction to get arrears of management fees and reserve funds for repair. You can check before buying.

6. In a similar situation and following to see the replies

7. I use a company that mainly manages rentals to pay my condo fees, utilities, and taxes. When I need someone to check on the unit for some reason, they can send someone over for a small fee. I couldn’t enter he country for two years during corona, so before I returned, I also had them hire a plumber to check on the plumbing and seals to replace anything that had dried out.

8. 1. Any real estate agency can manage your tax payments and management fees, etc. for a small fee. However, you have to be clear from the beginning, as a condition of the deal, that the agency will agree to do this.

   By the way, larger agencies will often refuse to do it because they make enough money from the buying, selling and renting of properties to bother with such a small assignment. Look for medium sized companies.

   2. Some properties do increase in value, and others do not. Every agent will have insights into which properties will sell for higher, but agents are not supposed to make predictions, and any agent who sounds too confident in their statements about future value is not acting responsibly. In addition to location the name value of the builder and management company are also good indicators of value.

   3. As part of the due diligence process for buying a condo you should receive a statement about the overall finances of a building, including information about how many people are behind in payments, and how much is lacking.

   4. It is always better to use a real estate agent that you trust to search for properties. Most of the hot properties never make it to a portal site or website because they sell too quickly, and the portal sites are mostly full of second hand information that must be added by data entry clerks. Data entry clerks are quick to add new properties but slow to take down information on properties that have already sold.

   The portal sites and web pages also allow one practice that is considered unethical (and sometimes illegal) in Japanese real estate. There are some agents who try to sell a property without listing it in the official system. They want to prevent other agents from showing a property and negotiating the price down, so they hoard a listing until someone contacts them through the website. Obviously this sort of agent cannot find clients the normal way, by being helpful and trustworthy. Indeed, most conflicts or legal complications that happen in Japanese real estate are involving these agents who deceive both the seller of the property (by prioritizing the fees of the agent over the sales price and schedule of the seller) and the buyer (by discouraging due diligence).

9. > Objective is to buy 1LDK/2LDK(or larger) mansion in central Tokyo to establish a part-time residence (vacation home) in the Tokyo area  (We reside in the US but travel frequently to the Tokyo area).

   Pretty common nowadays and you can find mansion within your price range. A lot of mansion have monthly/yearly managing costs and I suppose you will need support to pay them too if you don’t have a Japanese bank account.

   > No intention to rent out when we are not present

   This makes it even easier

   > Will pay cash with budget up to US$1M but prefer to stay under US$500K

   Doable, and with a good agent you can get a good discount for paying in cash

   > Some concern for earthquake and flooding safety, liquefaction, etc.

   Your agent can show you the Disaster map and check in which Risk zone the mansion reside, there are different things to consider.

   > Upon our demise the property will go to wife’s relative to sell, pay inheritance/gift tax and keep the proceeds so we would like to buy in a more desirable area and are willing to accept a smaller size if the area will remain desirable

   Within Tokyo will stay very desirable, market price might even not depreciate that much, and the land price will appreciate.

   > We are unable to open a bank account now due to wife’s residing in the US and I was advised to engage a major real estate company to manage the property including bill and tax payments, periodic security checks and routine onsite maintenance tasks required.  Is this a good approach?  We are not budget-constrained and willing to pay a management retainer.

   This is correct, and it’s usually better to go through one company. One problem is that usually international real estate companies have a limited “only for foreigners” properties with much higher prices than properties you can find here in person.

   > Assuming location, location, location is a valid indicator of price it seems the better the location the higher probability of property value depreciation.  Does this hold for central Tokyo?  Should we keep looking close to JR stations, subway stations, Odakyu and Keio lines, etc.?  We know some of the demographics and where the more desirable areas are and are currently taking this approach while searching for properties.

   This would need a longer answer, but recently within the Tokyo area things are appreciating instead of depreciating. MARKET value and LEGAL value are two different things. If you are using as a holiday house, being too close to the station might just add cost where you actually don’t need it (you are not communting daily).

   > We heard there some mansion properties are facing current distress because absentee owners (most frequently mentioned mainland Chinese) are abandoning payment of fees and in some cases abandoning their properties purchased with Chinese Bubble money.  Is there any way to mitigate or reduce this risk?

   It’s not as big as a problem as touristic places like Kyoto, It’s not that much of a problem in Tokyo in good valued mansion. Government will keep introducing laws and taxes to avoid investors/buyer leaving a place empty for years.

   > Any good resources for searching properties?  We are currently using realestate.co.jp, realestate-tokyo.com, homes.co.jp, housingjapan.com.  I’m mostly using these sites to feel out various areas.

   To get a grasp of the properties around, homes and athome are good websites. I would get a local contact to work with/for you to find and visit (videocall etc….) the potential properties you are interested in. That is where the big real estate companies lack in support in my opinion.

   All of these topics would need longer explanations 🙂

10. You can buy in cash, no problem. You don’t need PR. I’ve purchased several. Ideally find a unit owned by the real estate agent / company; you save quite a bit on the broker’s fee and such, and negotiating directly will be easier and faster. There’s not much in the way of any real benefit for the seller in paying for cash other than not having to wait for lending etc. so don’t expect any real discount because you’re purchasing in cash.

    >seems the better the location the higher probability of property value depreciation

    The better the location, the more the property itself will maintain value. Depreciation of the actual *structure* is largely irrelevant unless you’re buying brand new, in which case you’re overpaying for the first few years. Any premium is largely based on proximity to public transportation (and other amenities). Not sure you’d want to overpay to be *too* close if you’re not using public transportation every day of the year.

    If you’re going to spend upwards of $500k – $1mn for a place to live a few months out of the year that you’re not renting out – just stay at an upscale hotel or weekly mansion etc. when you fly over. Stay at the same place a few times and they’ll be able to set everything up to your liking. Even better, you can rent out a weekly mansion for months at a time that means you can keep stuff there. That’s what most expats do that split their time between Tokyo and Singapore/Hong Kong.

    *Vastly* cheaper, can usually be much nicer, no property tax or maintenance to worry about, no inheritance issues to sort out, you can stay in other parts of Tokyo or the country depending on what you want to do, etc. Combine that with a rental car and you’re gold.

11. Great info here!…it’s odd that so many responses are getting downvoted (including this one, I assume).