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FAQ about buying a cheap old house in Japan

If you love Japan and want to spend time there every year, then buying a house is certainly an option worth exploring.

(an old house for sale on recent listings)


I am not a resident of Japan. Can I buy a house there?


Yes, you can. Unlike many other countries, there are no legal restrictions for foreigners buying property in Japan. You can even buy a house while visiting on a tourist visa.


Do I get any residency or citizenship benefits from buying property in Japan?


No. Owning property in Japan does not entitle you to any special visas or residence options.

There are many visa options — student, business manager, work, spouse visa — but you’ll need to figure that out first if you plan to live there year round. Otherwise, you’re limited to 90 days per visit as a tourist, up to 180 days per year.


Does the house come with the land?


YES. Most of houses are ‘freehold’ properties, meaning that the land is included in the sale.

There are also some ‘leasehold’ properties in Japan, meaning the land is not included and must be rented.


Why are some houses so cheap in Japan?


Japan has a number of factors that make *some* real estate relatively cheap. Namely:

  • An aging / declining population

  • Urban migration away from the countryside, moving to cities like Tokyo

  • Japanese buyers preferring new homes to older ones (85% vs 15%)

Many (though not all) of the cheap houses are in more rural areas that have limited job options and less buyer demand.



This seems too good to be true. What’s the catch?


This is an incredible deal — for the right person. If you love Japan and spend a lot of time there every year (or if you live in Japan already!), then buying a house is certainly an option worth exploring.


That said, buying a cheap house in Japan is usually NOT recommended as a financial investment. For various reasons mentioned before, property values in Japan don’t appreciate like they do in other countries — they often decrease.


However, for the right person and circumstances, owning a house can be an ‘investment in joy’ in the country you love.


I'm interested in one of the houses. How can I buy it?


If you’re working with an intermediary* or English speaking agent, they will guide you through the process, including which documents you’ll need, arranging a building inspector, etc.


*Intermediaries usually charge between 3-6% of the house price. I think for most people they are 100% worth the cost — to save time and avoid more costly mistakes and headaches.



I need an intermediary to help with the process.


If you’re at the point where you’re seriously looking to make a purchase, and aren’t comfortable doing it in Japanese, then you need a trusted intermediary.


Do I need to physically be in Japan to buy a house?


No. You can use an intermediary who will act as your power of attorney throughout the process.


That said, We would *highly* recommend visiting the property in person before putting in an offer. It’s hard to get the ‘feel’ of a house and neighborhood from only photos or video.


How long does it take to close on a house purchase in Japan?


Usually the whole process takes about 2-4 weeks — if you have all the proper documents ready, and don’t run into any issues. If you run into a snag, or don’t have the right documents, it could take much longer.


Can I get a mortgage in Japan?


Unfortunately, for non-residents it’s quite difficult to get a mortgage from a Japanese bank, especially for older, low cost properties. So you’re often limited to either a cash purchase (most common) or financing in your home country.



What about property taxes and ongoing costs?


Ongoing costs can vary quite a bit depending on the house and your personal circumstances.

The basics are:


1. Yearly property taxes:

1.4% of the assessed value plus 0.3% for city planning tax.


2. Property management fees:

If you’re away for extended periods, you will need someone to pull the weeds, air out the house, etc. Budget between $50 to $200 per month depending on the size of your yard and the level of ongoing work needed.


3. Utilities:

The average cost for utilities for one person is just under $100 a month: about $40 for electricity, $30 for gas and $20 for water.

When you’re away, some water companies allow you to pause your contract and not incur charges. Electric companies often charge a base rate of $10 to $20 per month even when there is no usage.


4. Fire Insurance:

$200-$400 per two year contract. This insurance is not mandatory, and for very cheap houses it may not make financial sense.


5. Maintenance:

Case by case, depending on the house. If the house is still in good condition, so you may only spend about $1.5k on renovations (new tatami mats and a quick roof fix). Always hire a building inspector before buying so you know what you’re getting into.


Can I buy a house in Japan and rent it out as an Airbnb?

It’s possible in theory, however the new minpaku law (2018) makes it quite difficult to comply with all the laws to rent it out as a short term rental. Google “minpaku law airbnb” for more info.


One other thing to keep in mind is that outside of major tourist areas like Tokyo and Kyoto, it can be difficult to find property management companies to operate the airbnb for you.


If I buy an apartment, how much are condo / HOA fees?

Usually apartments in Japan have both management fees (管理費) and a repair reserve fund (修繕積立金). These can vary a lot, from as low as $30 per month, all the way up to over $1,000 per month for some luxury buildings.



How do you pay taxes and utilities for a vacation home? How do you manage without a bank account?

For the initial house purchase, usually you can transfer the funds directly to the real estate agent from abroad.


Alternatively, an intermediary or property management firm is often able to accept the funds for the initial purchase. They can also arrange bills to be paid while you’re away.


Recently, some utility companies allow for automated payments via credit card. It’s worth asking and explaining your situation to see if you can find a solution that doesn’t involve hiring someone to pay your bills while you’re away.


Notes:

  • All the above answers are foreigners who have already bought a house in Japan)

  • Photos of houses and prices are taken from some recent listings in Japan. Those houses may not be vacant when you read this article.


For further, please contact: vu.than@saokhuegroup.net
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