What David said is true. I'd also add to that that you are paying a 20% withholding tax on gross rental income. I'm not sure what yields Priti is talking about, but I know that after you factor that tax in, it goes way down. My rental looks like 6-7% on paper, and after tax it's like 2%. I wouldn't bother investing outside of the big city centers, nor buying anything younger than 30 years old. The place I have is over 30 years old and a mansion ("mansion" in Japan means an apartment, not "mansion" like a huge house). The land has slightly increased in value (by like maybe 3-4% over 3 or so years) but the value of the structure I'm pretty sure has gone nowhere. I lived there for a couple years and I met this guy who has bought and managed a ton of property there. He's got a great wikipedia page that breaks it down. I've never done foreclosures, but from what I've heard, they're not good. Sometimes occupants still live there and eviction is not easy, and I have even heard a story once that the yakuza are involved in the construction and real estate business and exorted money from buyers through occupants in these properties. I don't mean to come off as a conspiracy theorist - I'm not saying this is normal; I have no experience with foreclosures, just parlaying the message. Foreclosures there are a whole different thing; buying a house and not paying like that is pretty weird, just like eviction is. So if you see a foreclosure, it's not a typical thing, and the people involved are not typical. Also, not very easy to use typical methods of valuation like comparable sales - there is no public tax assessor's website that you can just freely grab this from. The document that records the sale is called a "Tohon" and does not list a sale price. Yes, you read that right - it does not list a sales price. To make matters worse, not everything is listed on an MLS like in the US; many agents keep listings to themselves, which makes the market more opaque. That gets worse as you get farther out of the city
TLDR: values depreciate, inflation has gone basically nowhere in Japan for a long time, the supply of housing is pretty good compared to demand (unlike the US) and that's because of flexibility with rezoning and development, taxes on rental income are high. Good thing is having yen exposure, but I wouldn't worry much about that unless you have a pretty sizeable portfolio, imho.
It's an amazing country, and I miss it. I don't think real estate is great there, however, as an investment vehicle. Business in Japan in general, and just about everything, works in very different ways, but that's a whole 'nother topic.
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