Fun question - Should I buy more Japan Real Estate (based on general RE principles?)

[Eric Sato]

My question uses details about real estate investment in Japan, but I am looking for general advice based on, hopefully consistent, basic principles of investing in real estate.

I have mortgages on three long term rental properties in Japan. Each property is a single room single bathroom, aka a 1k (1 = one room, and k = kitchen unit attached to room). Each property was around 200k USD based on current exchange rate. These are units in a larger “mansion” (what Japan calls concrete built apartments, and the most common type of living unit in metropolitan areas).

The mortgage rate on each is fixed 30 year at 1.76% (this is actually high for Japan. Personal mortgages are under 1%).

I paid zero down for each property, which is common for this type of investment due to low rates.

Japan bespoke dynamics-

- Properties do not appreciate typically, ever. There are some exceptions but RE in Japan is not an appreciation game (no flipping, no selling for 2x after 10 years). 

- Cash flow is negative for zero down deals, but barely.

- RE investment in Japan like this is primarily for tax benefits and loan pay down, with selling equity in the property at year 10 or 15.

- There is no such thing (to my knowledge) as cash out refinancing. This is because 

1. Properties do not appreciate and these types of units are in large apartment buildings, thus not subject to being able to rehab for increased value per unit. Even SFH do not appreciate over time (Japanese people love brand new things)...

2. Rents are controlled. It is very very difficult to raise rents in Japan in these types of Mansion/Apartment units (SFH rents can be adjusted between tenants of course... but can't hike up prices on current tenants).

3. Loans can ONLY (typically) be taken out against your W2 earnings, not the value of owned assets. This makes things like BRRR not possible. The only way to grow your portfolio is in W2 based earning potential. (combination of can't increase value in a property through rehab generally, and can't refinance based on property value).

Okay So

Now all of that being said, because I can purchase properties with zero down at 1.7-1.8 rates, with near 97-98% occupancy rates, with only about -100 USD per month in negative cash flow (could be net positive if I do some money down), is there any reason to NOT buy more as long as I can continue to get loans. This is considering

- I have JP income to offset with the standard tax benefits (depreciation, expenses, mortgage interest) 

- Loan pay down for selling my equity in properties at year 10-15. (One strategy is to sell off a few properties to pay off the remaining principle on other properties to create all net new cash flow).

Concerns

One concern is that because loan potential is based on my W2, I don't want to throw all my eggs in one basket. E.g. I am also looking at potentially going the STR route or MTR route on full buildings. But I am ultimately capped on the number of loan financed properties / total amounts. At one point I won't get approved for more loans due to income no longer supporting total value of all loans (typically 8x-10x my yearly income).

I would love to crowd source some opinions / thoughts from some more seasoned professionals here. Please note, I do not own any US based real estate yet =( (I have other forum posts on that topic).