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

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  • #16
    Originally posted by Tatsuo View Post
    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?

    Comment


    • #17
      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.

      Comment


      • #18
        Originally posted by Tatsuo View Post
        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–œ, 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–œ@house for 2000–œ 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.

        Originally posted by Sterling View Post
        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fd 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fd paid two months rent as a damage deposit, or shikikin. I still canft imagine what the sum was for, as the place didnft even come with light fixtures. The landlady must have been afraid wefd steal the boards. Of course, there was also the two-month reikin (key money). On top of that, wefd pay another monthfs rent every two years to renew the lease. We never moved because we never thought wefd get anything better.

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

        But buying a DIY house makes a lot of sense if youfre planning to stay in Japan a while. First, therefs not much demand, so theyfre cheap. Thatfs because most Japanese purchasers wonft look at old goods. And not just the Japanese. A foreign friend of mine just bought a new house. gHappy wife, happy life,h 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fs not to say all DIY homes are wonderful. We saw some that needed a bomb or a bulldozer, not a builderfs 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fre 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fs 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

        Comment


        • #19
          Originally posted by NorthByNorthwest View Post
          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–œ cash then it costs you at least 33–œ/month without write-offs and without tax. If you can rent the same object for less than 33–œ 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)

          Comment


          • #20
            Originally posted by Tatsuo View Post
            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?

            Comment


            • #21
              Originally posted by thefan View Post
              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 ?

              Comment


              • #22
                Originally posted by Tatsuo View Post
                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?

                Comment


                • #23
                  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

                  Comment


                  • #24
                    Originally posted by Tatsuo View Post
                    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

                    Comment


                    • #25
                      Originally posted by thefan View Post
                      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.

                      Originally posted by thefan View Post
                      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 ?

                      Comment


                      • #26
                        Originally posted by hml View Post
                        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–œ@H@
                        Things like ”ƒŽó‰Â”\‰¿Šz 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 . . .
                        Last edited by Tatsuo; 2012-03-30, 04:08 PM.

                        Comment


                        • #27
                          Originally posted by hml View Post
                          Ummmm.... because squatting is cheaper?
                          Originally posted by Tatsuo View Post
                          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–œ@H@
                          Things like ”ƒŽó‰Â”\‰¿Šz 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?

                          Comment


                          • #28
                            Originally posted by Tatsuo View Post
                            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.

                            Comment


                            • #29
                              Originally posted by hml View Post
                              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!!!!!!!!!!!!!!!!!!!!!!!!!

                              Comment


                              • #30
                                Originally posted by kurogane View Post
                                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.

                                Comment

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