Sick of renting. What are the basics I need to learn about buying a home in Tokyo?

[Sterling]

I'll have about Y35 million cash to spend.

Ideally want something in near Suidobashi but don't want to live near there necessarily.
Bunkyo-ku, Chiyoda-ku, Shinjuku-ku (neighborhoods closer to Iidabashi) are all fine; just nothing low ground and/or near a major river where there's flooding.

Otherwise, relatively CLUELESS about how to go about looking or knowing what's available. And, I am guessing if my budget is too small for those central areas, then I had better start thinking of areas like West Tokyo (Kichijoji, Komazawa etc.)

Condo, single-family house, townhouse - at this point, indifferent; however, if it's a house, I don't if the place is old, and the bulk of the value is in the land itself. At least, I'll have an idea of its salvage value/exit price versus a condo which would just depreciate to zero at some point.

[kurogane]

www.homes.co.jp

You read squigglies, doncha????

I find they have a comprehensive database and easily manipulated search function.

Never looked at Tokyo places myself............so as far as budget, etc. goes.........

Good luck.

[Since1990]

I'll have about Y35 million cash to spend.

Ideally want something in near Suidobashi but don't want to live near there necessarily.
Bunkyo-ku, Chiyoda-ku, Shinjuku-ku (neighborhoods closer to Iidabashi) are all fine; just nothing low ground and/or near a major river where there's flooding.

Otherwise, relatively CLUELESS about how to go about looking or knowing what's available. And, I am guessing if my budget is too small for those central areas, then I had better start thinking of areas like West Tokyo (Kichijoji, Komazawa etc.)

Condo, single-family house, townhouse - at this point, indifferent; however, if it's a house, I don't if the place is old, and the bulk of the value is in the land itself. At least, I'll have an idea of its salvage value/exit price versus a condo which would just depreciate to zero at some point.

Y35 million as in 3500 Man? You won't be able to buy a house or apartment in Tokyo for that much but you could buy the land and you should easily be able to get a 1500 Man (or more) loan for the house - the repayments would be way less than your rent.

[SometimesJustMe]

Y35 million as in 3500 Man? You won't be able to buy a house or apartment in Tokyo for that much

http://sumai.homes.co.jp/%E7%89%A9%E...1185490001681/

[Since1990]

http://sumai.homes.co.jp/物件詳細/1185490001681/

Well OK, they exist, if you don't mind something that is just a few years from being pulled down. Like I said, you'd be buying the land for that price.

[crazy1]

http://sumai.homes.co.jp/%E7%89%A9%E...1185490001681/

holy s-hit that's expensive! The same apartment in Osaka would go for 7-10 million just a couple of miles from the center of the city! brand new apartments, 70sq meters are only in the low 20 million range too.....the one listed is 30 years old!

[crazy1]

Can't speak for tokyo real estate as I know it's expensive, but being somewhat of an expert (??!!) in Osaka real estate, I can say that there are deals to be had everywhere if you have cash. Owners (including yours truly) are much more open to negotiations if someone has cash, because banks are getting tougher giving out loans to people. I would definetly try the court auctioned properties, not that often are there SUPER good deals (well at least not in Osaka) but occassionally there will be something good. If you have the time you can find something good IMO.

And have you thought about getting a loan from a bank here (even NAB in Tokyo) with interest around 2% and investing some of the 35mil? Wouldn't that be a better deal? You could pay the loan repayments with the interest gained from the investment. Because, believe me, banks don't look at having bricks and mortar as a investment here (if you try and get another loan in the future) they MUCH prefer cold hard cash!

[thefan]

I'll have about Y35 million cash to spend.

I'd buy somewhere further out with some greenery around it and put up with the commuting. You might even end up with change.

[hml]

I'd buy somewhere further out with some greenery around it and put up with the commuting. You might even end up with change.

If you're willing to commute, then yes. You could get the land, build a new house and furnish it with 35 million - IF you know what you're doing (ie. how to negotiate) Still, get a loan and not have to negotiate as much.

[Tatsuo]

Y35 million as in 3500 Man? You won't be able to buy a house or apartment in Tokyo for that much but you could buy the land and you should easily be able to get a 1500 Man (or more) loan for the house - the repayments would be way less than your rent.

The repayments would be less than the rent but his return on capital would be a lot worse.

Buying property in Japan is in most cases one of the worst things you can do as there is no increase in value. Even if you believe for reasons I can't understand that REI is the way to go as you believe that you can acually see a decent ROI buy a REIT index fund. Less hassle and definitely a better return that buying property.

Take your 3500万, invest in organisations that actually earn money with a cheap funds (e.g. http://maxis.muam.jp/e/fund/shouhin/251308.html) and rent until you die. Less hassle, more freedom, better return and safer.

The irrational feeling like "owning is better than renting" and "I just want to own" cost more money than most people realize (...or don't want to know). If you don't have the cash there might be some scenarios with a decent ROI, if you have (and use) the cash there is not even one. You will always lose money.

Being stuck with an immovable can go well or can be hell on earth for as long as you live as you don't know how the future will influence your property.
(Already forgot Fukushima ?) One black swan (even a little one in your private life) and you wish you could trade you 5000万　house for 2000万 or less as soon as possible.


Most importantly, in a downward market you can not adjust your living situation according to age, family size, income, place of work etc. without losing money.

[TJrandom]

The repayments would be less than the rent but his return on capital would be a lot worse.

Buying property in Japan is in most cases one of the worst things you can do as there is no increase in value. Even if you believe for reasons I can't understand that REI is the way to go as you believe that you can acually see a decent ROI buy a REIT index fund. Less hassle and definitely a better return that buying property.

Take your 3500万, invest in organisations that actually earn money with a cheap funds (e.g. http://maxis.muam.jp/e/fund/shouhin/251308.html) and rent until you die. Less hassle, more freedom, better return and safer.

The irrational feeling like "owning is better than renting" and "I just want to own" cost more money than most people realize (...or don't want to know). If you don't have the cash there might be some scenarios with a decent ROI, if you have the cash there is not even one. You will always lose money.

Yes - I'd generally agree with this. The only exceptions that I can think of is

1) if you find a real bargain for some reason - a death, an impending death, the yaks are the lenders and the homeowner is desperate to get out, etc. But then you would be competing against a whole pool of realtors who are looking for the same thing.

or

2) where you plan to be there for a very long term, and don’t want to be tied to rent or possibly forced to move at the end of the term – and are thus willing to pay a premium for the satisfaction and security that comes from ownership. Thus you perceive it as consumption, not an investment.

[hml]

The irrational feeling like "owning is better than renting" and "I just want to own" cost more money than most people realize (...or don't want to know). If you don't have the cash there might be some scenarios with a decent ROI, if you have (and use) the cash there is not even one. You will always lose money.

Depends on what you buy and how much you buy it for.

Me? I bought 300m3 about 2 kilometers from the station. Total travel time to down town: 40 minutes. Property came with an old house that I will "reform" (ie. rebuild) I paid about 1.4 million yen for it. Property taxes run me about 15,000 yen a *year*. Few neighbors, quiet, good exposure to sunlight. Yay me.

How I got it? Paid close attention to the court auctioned properties for about 4 years.

[Tatsuo]

Depends on what you buy and how much you buy it for.

Me? I bought 300m3 about 2 kilometers from the station. Total travel time to down town: 40 minutes. Property came with an old house that I will "reform" (ie. rebuild) I paid about 1.4 million yen for it. Property taxes run me about 15,000 yen a *year*. Few neighbors, quiet, good exposure to sunlight. Yay me.

How I got it? Paid close attention to the court auctioned properties for about 4 years.

I can't comment on this investment as I don't know what "station" and what "down town" and if the story is true. I have my doubts as those "auctions" are filled with professional traders and 不動産 guys that know the market pretty well. I'd say it is next to impossible to find good location and/or good property for a cheap price.
It is possible to believe to have found something cheap becaue one's own belief system is different to what the majority is looking for (quiet, not too close to the city etc.).

In the end it always comes down to [market value]. Can you sell for a higher price or not. Everything else is not worth much.

[hml]

I can't comment on this investment as I don't know what "station" and what "down town" and if the story is true. I have my doubts as those "auctions" are filled with professional traders and 不動産 guys that know the market pretty well. I'd say it is next to impossible to find good location and/or good property for a cheap price.

Well, take everything with a grain of salt and you'll be fine, I guess.

40 minutes from downtown Nagoya. That could be any number of places. Does it matter what station it is?
Downtown Nagoya = http://g.co/maps/s6dqw

You're right. There are plenty of professional traders and real estate agents / investors at the auctions. All I have to do to win is to out bid them. If you bother to look at the results of past auctions (anyone can see them - just ask at the courthouse) you will notice that many of the successful bids were made by individuals - not corporations. The people at the courthouse will likely explain that individual buyers tend to pay more because they are bidding in relation to market retail price, whereas the professionals are bidding in relation to wholesale price.

This was my third (I think) time participating in a bid. There were only 3 or 4 bids on my property and I won with a difference of about 100,000 on the next bid.

It is possible to believe to have found something cheap becaue one's own belief system is different to what the majority is looking for (quiet, not too close to the city etc.).

In the end it always comes down to [market value]. Can you sell for a higher price or not. Everything else is not worth much.

It doesn't always come down to market value. If what you value is different than the market, you must consider those other factors as well - as you pointed out.

I met one of the agents who attended the auction where my property was sold. He did not bid on it but he said that I got a very good deal. I, for one, believe him.

[Tatsuo]

Well, take everything with a grain of salt and you'll be fine, I guess.

40 minutes from downtown Nagoya. That could be any number of places. Does it matter what station it is?
Downtown Nagoya = http://g.co/maps/s6dqw

You're right. There are plenty of professional traders and real estate agents / investors at the auctions. All I have to do to win is to out bid them. If you bother to look at the results of past auctions (anyone can see them - just ask at the courthouse) you will notice that many of the successful bids were made by individuals - not corporations. The people at the courthouse will likely explain that individual buyers tend to pay more because they are bidding in relation to market retail price, whereas the professionals are bidding in relation to wholesale price.

This was my third (I think) time participating in a bid. There were only 3 or 4 bids on my property and I won with a difference of about 100,000 on the next bid.


It doesn't always come down to market value. If what you value is different than the market, you must consider those other factors as well - as you pointed out.

I met one of the agents who attended the auction where my property was sold. He did not bid on it but he said that I got a very good deal. I, for one, believe him.

Nagayo ? If it's true what you are saying this seems to be a pretty good deal. I guess the house is worthless so you have to buy a new one. If you don't use your own money it could work out pretty well.

[hml]

Nagayo ? If it's true what you are saying this seems to be a pretty good deal. I guess the house is worthless so you have to buy a new one. If you don't use your own money it could work out pretty well.

If I could use *your* money, it would work out great! What do you say?

[Sterling]

Thanks for the various pieces of advice and also links to real estate sites.

These articles:

http://www.japantimes.co.jp/text/fl20080928x2.html


http://www.japantimes.co.jp/text/fl20080928x3.html

were slightly helpful but still left me a bit confused.

[NorthByNorthwest]

The repayments would be less than the rent but his return on capital would be a lot worse.

Buying property in Japan is in most cases one of the worst things you can do as there is no increase in value. Even if you believe for reasons I can't understand that REI is the way to go as you believe that you can acually see a decent ROI buy a REIT index fund. Less hassle and definitely a better return that buying property.

Take your 3500万, invest in organisations that actually earn money with a cheap funds (e.g. http://maxis.muam.jp/e/fund/shouhin/251308.html) and rent until you die. Less hassle, more freedom, better return and safer.

The irrational feeling like "owning is better than renting" and "I just want to own" cost more money than most people realize (...or don't want to know). If you don't have the cash there might be some scenarios with a decent ROI, if you have (and use) the cash there is not even one. You will always lose money.

Being stuck with an immovable can go well or can be hell on earth for as long as you live as you don't know how the future will influence your property.
(Already forgot Fukushima ?) One black swan (even a little one in your private life) and you wish you could trade you 5000万　house for 2000万 or less as soon as possible.


Most importantly, in a downward market you can not adjust your living situation according to age, family size, income, place of work etc. without losing money.

I was playing with this online calculator and depending on certain assumptions (even with depreciating home/condo values but increasing rents, for example), it became more prudent to buy than rent especially in the long run.

Can you tell us more about the REIT fund you posted? I don't get it completely.

Thanks for the various pieces of advice and also links to real estate sites.

These articles:

http://www.japantimes.co.jp/text/fl20080928x2.html


http://www.japantimes.co.jp/text/fl20080928x3.html

were slightly helpful but still left me a bit confused.

I think this is one scenario that you don't want:

http://www.japantimes.co.jp/text/fl20080928x2.html

...
Ivan Hardie (English; 38 years old; 15 years in Japan) Condominium for a family of three in Shinjuku Ward, Tokyo, purchased in 2001 for \39 million.

"I bought a condo because it's cheaper than renting, and chose the particular property because of its size and location. I bought it by myself and the biggest challenge was the Japanese paperwork.

"I'm selling my property at this time and can't sell it at a profit (selling price now is \32.8 million). I wish I'd purchased a house with land as they tend to retain their value, and you have your own space.

Advice? "Buy land with a house. The place I purchased is in a great location (Yotsuya) on the 10th floor, with a great view and it's a good size. I was told by the real-estate firm that the people who live there are very nice.

"Maybe it was just me, or maybe it's because I'm non-Japanese, but it's the worst place I have ever lived in in Japan. I get lots of complaints from the people living below. On the first day after we moved they came and said we were too loud, on the second day they came and said that if we had flooring we would have to put carpets down. I was told by the caretaker that the person who lived in my apartment before me moved for out for the same reason that we are now moving."

But this might be something you're looking at:

http://metropolis.co.jp/features/the...lf-price-home/

Half-Price Home
Posted By daviatrix On January 19, 2012 @ 12:00 am In The Last Word

My wife and I used to live in a rental house. The neighbor on one side had an ancient, crippled-up dog. Each morning, he walked that mutt by our door just in time for the dog to relieve itself. On the other side was a lady who kept Rikki, a frisky young Akita, penned up and yelping in her yard. She also took in stray cats. That might have been admirable―except she never had them sterilized. We soon had generations of cats howling and scrapping over territory. Meanwhile, Rikki would snooze in the sun all day, saving his strength. Then he’d be up all night chasing the cats from the yard. Screeching felines ran into our garden and scrambled up onto our roof. One night, a tomcat flipped open the window screen and dropped onto our bed. The most shocking part? It took us ten years to move.
Originally, we’d paid two months rent as a damage deposit, or shikikin. I still can’t imagine what the sum was for, as the place didn’t even come with light fixtures. The landlady must have been afraid we’d steal the boards. Of course, there was also the two-month reikin (key money). On top of that, we’d pay another month’s rent every two years to renew the lease. We never moved because we never thought we’d get anything better.

Then we learned about another option, known here as a “DIY house,” better known in the US as a “fixer-upper.” You buy an old house and do it up yourself. This is not something you’ll hear about from Japanese realtors―the commissions are too small for them to bother. Instead, they’ll tell you the roof leaks. Or the house has ants.

But buying a DIY house makes a lot of sense if you’re planning to stay in Japan a while. First, there’s not much demand, so they’re cheap. That’s because most Japanese purchasers won’t look at old goods. And not just the Japanese. A foreign friend of mine just bought a new house. “Happy wife, happy life,” he chimed, grinning at me. Then he figured out it would take him more than 30 years to pay it off.

As for people whose in-laws offer them cash for a new house? My advice is to buy a DIY house―and bank the rest.

The main point in favor of the DIY home is that buying a new house in Japan is no investment. Until the 2008 crunch, Japan must have been the only G-20 country where prices kept dropping. Buying a new home here is like driving a new car off the lot. Try selling that car for the same price even a few hours later. After 20 or 30 years, a Japanese home is considered a knock-down. The owner sells the land and then pays to demolish his own house.

DIY houses, on the other hand, have already depreciated. And qualifying for a mortgage is no different―or maybe even easier―than for a new house. Even teachers like us on three-year visas can qualify for a UFJ loan.

That’s not to say all DIY homes are wonderful. We saw some that needed a bomb or a bulldozer, not a builder’s renovation. After looking for a few weeks and seeing about a dozen places, we found a nine-year-old house: it was half the price of a new one.

We renovated. And made some mistakes, too. For one thing, never hire another English teacher to help renovate. Even if their hobby is carpentry, they have a much higher hourly rate than most Japanese carpenters. Few Japanese carpenters can teach English, but they’re better at carpentry than most teachers.

While renovating was sometimes exhausting, it was fun, too. Home improvement has changed in Japan with the introduction of US-style big-box home stores like Cainz Home, Tostem, and my personal favorite, Unidy. And some men love tools the way some women love shoes. So, cruising down shopping lanes of stacked lumber, insulation, and plumbing fixtures, I now had the perfect excuse to buy myself a power saw and a four-speed electric drill. I just told my wife I needed it for home repairs.

Ultimately, the best thing about your own place is the freedom. Besides the added comfort and security, you can decorate. We painted the oatmeal-colored walls in our house yellow, ochre and pink. And doing-it-yourself means you can go a little crazy―because you want to, not because your neighbor’s dogs and cats are driving you there.


Gregory Strong is an English teacher and freelance writer living in a DIY home in Tokyo with his wife

[Tatsuo]

I was playing with this online calculator and depending on certain assumptions (even with depreciating home/condo values but increasing rents, for example), it became more prudent to buy than rent especially in the long run.

Can you tell us more about the REIT fund you posted? I don't get it completely.

Calculating REI is a tricky thing. It depends a lot on the basic numbers you use. Most people don't calculate opportunity costs and don't see reality as it is but as they want it to be.

Opportunity costs: REI is a long term investment. So you have to calculate with at least 8 per cent ROI. If you buy a house with 5000万 cash then it costs you at least 33万/month without write-offs and without tax. If you can rent the same object for less than 33万 you lose money as an owner with an inflexible investment.

You should also always change your living situation according to actual needs. A big house in the country with stairs is great when you have a couple of kids and are in your 30s or 40s.When you get older and less rooms are being used, a barrier-free apartment in the city with less heating costs might be a good move etc. If you own inflexible RE you can only change your living situation according to market conditions and not to acutal needs (I mean you can but this usually costs a lot of money). People usually don't think about things like [divorce], [death/illness], [changing job], [getting older] etc. I'd say that more than 90% of bought or build property is based on unreasonable arguments and based on [now] rather than [later].

I can see just one scenario that could work: 100% borrowed capital, repayments are less than rent of similar property and you are not married + risk of moving in the future is small. Everything else is a gamble with very bad odds.


Here some cheap funds (can be bought and sold every day).

http://www.sumishinam.co.jp/special/stam_index/
http://maxis.muam.jp/e/


I'd not go for [REIT only] though. Mix it up a little:

http://maxis.muam.jp/e/fund/shouhin/251308.html

(I could not think of one scenario in which the above mentioned fund would perform less well than buying property in Japan in the next 30 years)

[thefan]

Calculating REI is a tricky thing. It depends a lot on the basic numbers you use. Most people don't calculate opportunity costs and don't see reality as it is but as they want it to be.

One day you will grow out of your obsession with money.

Do you still want to be renting when you are old?

[Tatsuo]

One day you will grow out of your obsession with money.

Do you still want to be renting when you are old?

You seem to be very clever. Could you tell me a reason why I shouldn't want to pay rent when I'm old ?

[hml]

You seem to be very clever. Could you tell me a reason why I shouldn't want to pay rent when I'm old ?

Ummmm.... because squatting is cheaper?

[wzwzwz]

Or, um, because age discrimination in the rental market is a big thing in Japan. Think it's hard to rent as a gaijin? Try renting as an old person. Property owners think you'll die in the unit, making it impossible to rent out afterwards due to Japanese superstition, and/or get senile and set it on fire first.

On the other hand, tenancy laws strongly favor the tenant in Japan. So, downsize to the rental unit you want to die in a good few decades before you get seriously old and you'll be fine

[thefan]

You seem to be very clever. Could you tell me a reason why I shouldn't want to pay rent when I'm old ?

as your mental facilities fail your ability to handle money will diminish

and life may throw you a few curve balls

[Tatsuo]

as your mental facilities fail your ability to handle money will diminish

So you believe that somebody with weakening mental ability due to age would be better of by having most of his capital in his own (usually too big) property where she/he can live on himself/herself ? What you say is actually an argument for [not owning property] as you will need cash in order afford a decent assisted accommodation etc.

and life may throw you a few curve balls

Why do you use this company ? I have never said to invest in this company or any other insurance company. I'm sorry I can't understand your line of argument. Your link doesn't go with anything that has been said. Could you explain what you want to say ?

I said you should invest in thousands of companies, countries and REIT with index funds. You should read very carefully and base your arguments on facts. So I ask you: Do you believe that one single property has more or less risk than thousands of the biggest companies and countries on this planet ? How likely is it that in the next 30-40 years the biggest companies and countries on this planet (shares, bonds and REIT) will earn less money than a house/apartment in Japan ? Ask yourself: Is this even possible ? What would happen to the housing prices in Japan if we had a situation than in the next 30-40 years the world economy shrinks ?

[Tatsuo]

Ummmm.... because squatting is cheaper?

You have no idea how many of you guys I've met so far. There is always somebody that buys at the lowest and sells at the highest, knows exactly when FX prices turn and (usually afterwards) tell the world about their cheap and early involvement in the APPLE's of this world and under-valued RE just they could find. All of them lie. Either to other people or to themselves.

You want to tell me that you bought a house on 300m2 without any problems in Nagoya for 140万　？　
Things like 買受可能価額 are no problem for you as you can go lower and beat the system, right ?

You are talking crap and I will not bother to answer you again. I'm open for arguments and like discussing investment as lots of people can benefit from such a discussion. I can't deal with show-offs, though. Waste of time . . .

[hml]

Ummmm.... because squatting is cheaper?

You have no idea how many of you guys I've met so far. There is always somebody that buys at the lowest and sells at the highest, knows exactly when FX prices turn and (usually afterwards) tell the world about their cheap and early involvement in the APPLE's of this world and under-valued RE just they could find. All of them lie. Either to other people or to themselves.

You want to tell me that you bought a house on 300m2 without any problems in Nagoya for 140万　？　
Things like 買受可能価額 are no problem for you as you can go lower and beat the system, right ?

You are talking crap and I will not bother to answer you again. I'm open for arguments and like discussing investment as lots of people can benefit from such a discussion. I can't deal with show-offs, though. Waste of time . . .

Dude! Take a chill pill! I forgot the </sarcasm> remark.

You asked someone a very good question - why not pay rent when you are old. It is a valid question. Some people just don't see the other side to the "gotta own your own place" coin. I'm more of a "want to have my own place and do whatever I darn well please with it" kind of guy.

I'm not talking crap about anything.

There *are* problems with the house. I'm going to raze it. The land does not have a full 2 meters access to the main road so in some cases, you cannot build on it. "Renovations" however, are not an issue. I'm just going to renovate more than the guy down the street...

Yes, the land is about 300m2 - more like 335m2.

Would you like photos? (It's a dump)

Still, it's not really something that can be repeated often. I got lucky. There are other deals out there. And if you think about it, To get a clear lot, I will have to dump another 2 million yen. So the lot really costs me 350 million. Starting to sound more normal?

[thefan]

Why do you use this company ? I have never said to invest in this company or any other insurance company. I'm sorry I can't understand your line of argument. Your link doesn't go with anything that has been said. Could you explain what you want to say ?

Obviously your mental faculties are already weak.

[kurogane]

Would you like photos?

Yes, but not of your sheethole of a house.

You know damn well who I mean!!!!!!!!!!!!!!



Still, the idea of a loveable reprobate like you being a responsible landowner fills me with a rich, warm and appreciative mirth.


Sounds like it was a good buy.

Also, you do realise you just tried to engage TwatsooOh! in a dialogue requiring post-elementary level intelligence????

GONG!!!!!!!!!!!!!!!!!!!!!!!!!

[hml]

Yes, but not of your sheethole of a house.

You know damn well who I mean!!!!!!!!!!!!!!



Still, the idea of a loveable reprobate like you being a responsible landowner fills me with a rich, warm and appreciative mirth.


Sounds like it was a good buy.

Also, you do realise you just tried to engage TwatsooOh! in a dialogue requiring post-elementary level intelligence????

GONG!!!!!!!!!!!!!!!!!!!!!!!!!

Ah, well, poor guy really thought I was making it up.

And, yes, KG, I know what photos to which you refer.

I was *this* close to posting a link in the forums, but I'll PM you instead.

[hml]

...or maybe not since your box is full, or something...

[InitialD]

The basics are we are not yet at the bottom.

Wait until the end of the bear market in Japan and when the new bull market starts then buy.

[Tatsuo]

The basics are we are not yet at the bottom.

Wait until the end of the bear market in Japan and when the new bull market starts then buy.

I'm looking forward to you telling us when exactly the new bull market will start.


By the way, did I read correctly ? Was "Mr-living-in-Kyoto-in-his-fifties-alone-teaching-English-and-havin-25-thousand-posts-on-the-pot-as-a-wanna-be-intelectual-kurogane" talking about intelligence ? lol. But I have to say his input with "I don't know much" and "look it up on the web" was not only helpful but bristling with intelligent insight.

[Since1990]

Take your 3500万, invest in organisations that actually earn money with a cheap funds (e.g. http://maxis.muam.jp/e/fund/shouhin/251308.html) and rent until you die. Less hassle, more freedom, better return and safer.

As we all know, investments in organisations can go down the toilet, too. No investment (including buying property) is fail-save. Life is risky no matter which course of action you decide to go.

For me I know I've made the right decision in buying because I got better value for less money.

[Tatsuo]

As we all know, investments in organisations can go down the toilet, too. No investment (including buying property) is fail-save. Life is risky no matter which course of action you decide to go.

For me I know I've made the right decision in buying because I got better value for less money.

What you are saying is not true. With the index funds I mentioned you don't have a issuer risk. In other words, even if the UFJ bank goes down, you will not lose any money. You are investing directly in the biggest companies / countries and RE of this planet (more than 3000). Of course you could say that all of those companies could go down and/or we could see a long-term recession for the next 20-30 years.

But even in this very unlikely case property in Japan will suffer - most likely even suffer more than stocks, bonds, REIT and commodities, as Japan would be hit with the same recession.

So you see, no matter what happens, REI will never be as safe and profitable as the allocation mix I mentioned. Telling oneself that it was the right decision and that it was a good investment doesn't make it right. The numbers say differently.

If you use saved money to invest in one or a few properties the risks are tremendously high, the return will always be less than a stock/bond/REIT mix and the inflexibility makes it completely unattractive. All other arguments are irrational and mainly base on the fact that we have been told since we were born by parents, the media and financial institutions that owning were a good thing.

I have never heard any rational reason why.

[Since1990]

What you are saying is not true. With the index funds I mentioned you don't have a issuer risk. In other words, even if the UFJ bank goes down, you will not lose any money. You are investing directly in the biggest companies / countries and RE of this planet (more than 3000). Of course you could say that all of those companies could go down and/or we could see a long-term recession for the next 20-30 years.

But even in this very unlikely case property in Japan will suffer - most likely even suffer more than stocks, bonds, REIT and commodities, as Japan would be hit with the same recession.

So you see, no matter what happens, REI will never be as safe and profitable as the allocation mix I mentioned. Telling oneself that it was the right decision and that it was a good investment doesn't make it right. The numbers say differently.

If you use saved money to invest in one or a few properties the risks are tremendously high, the return will always be less than a stock/bond/REIT mix and the inflexibility makes it completely unattractive. All other arguments are irrational and mainly base on the fact that we have been told since we were born by parents, the media and financial institutions that owning were a good thing.

I have never heard any rational reason why.

Yes, I understand what you're saying.

However, I know that to rent the same property in the same location as my house would cost considerably more.

Personally, I wouldn't feel happy with your plan + renting. Something like your plan + house ownership would be better for me.

A world depression like we've never seen will happen one day - just don't know when.

[InitialD]

I'm looking forward to you telling us when exactly the new bull market will start.

Are you trying to say there will never be another property bull market in Japan?

Property always goes from under to overvalued, right now its still in the down trend not at the bottom yet.

There will come a time when average prices are so undervalued that the cycle will turn and we will be on our way once again to overvalued.

[Tatsuo]

Are you trying to say there will never be another property bull market in Japan?

No, I'm saying that you didn't tell when there will be a market change and how to determine the begin of a bull market.
Therefore your input is worthless and your advice to buy cheap and sell high as valuable as telling somebody that the
best investment were to know next weeks lottery numbers.

Property always goes from under to overvalued, right now its still in the down trend not at the bottom yet.

Could you define the words "undervalued" and "overvalued" and tell us exactly when and how this trend change will happen.
Could you also tell us what you mean with "always" ? How often did it happen ? How long was a market under- or overvalued ?
You have to give us some details, otherwise you sound like a crazy man trying to make complex things (that the brightest minds on this planet can't figure out) simple by statements that lack the basics.

There will come a time when average prices are so undervalued that the cycle will turn and we will be on our way once again to overvalued.

Could you tell me a number ? How much is "undervalued" ? How long is one cycle ?

Just two things to think about:

1) There where times when e.g. the stock market was priced under book value and still fell another 50% afterwards.
Then it stayed there for 20 years. Quite a time to wait when you are in your 50s or 60s and had invested in an "undervalued" investment.

2) If it were that easy do you really think UFJ or Mitsui, organizations that have and get market and insider information you couldn't dream of, would go through the hassle and give money to privately owned companies for 2-4 per cent p.a. ?

[AlphaKimori]

What if I can buy a rental apartment in Tokyo for less than 10 Million Yen and get a rental yield of 9% (around 70K Yen)? Won't that make a good investment? Am looking at one such investment now. The unit is already tenanted.

[HarryHurry]

Y35 million as in 3500 Man? You won't be able to buy a house or apartment in Tokyo for that much but you could buy the land and you should easily be able to get a 1500 Man (or more) loan for the house - the repayments would be way less than your rent.

Why are you talking in Man when you're speaking English that we understand perfectly well? Don't be a d!ck, and just stick with the OP's 'Y35 million'. Fine as is, dude...