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Investing in Japanese Real Estate through Mortgage Property Auctions: What Foreign Investors Need to Know

Investing in Japanese Real Estate: What Foreign Investors Need to Know

Japan is a country with a rich history and culture, and its real estate market is no exception.

With its unique blend of modernity and tradition,

Japan offers a wide range of investment opportunities for foreign investors.

However, investing in Japanese real estate can be a complex process,

and it is important to understand the legal and

cultural nuances before making an investment.

As a real estate agent based in Tokyo serving foreign investors,

I have seen first-hand the potential for growth and success

in the Japanese real estate market.

In this article, I will share some key information t

hat foreign investors should know before investing in Japanese real estate.

 

Understanding the Legal System

One of the most important things to understand

before investing in Japanese real estate is the legal system.

Japan has a civil law system, which means that the law is primarily

based on written codes and statutes.

This is different from common law systems,

such as those found in the United States and the United Kingdom,

where the law is primarily based on judicial decisions and precedents.

In Japan, there are several laws and regulations that govern real estate transactions.

For example, the Civil Code sets out the basic rules

for contracts, property rights, and other legal matters.

There are also specific laws that regulate real estate transactions,

such as the Building Lots and Buildings Transaction Business Act

and the Real Estate Specified Joint Enterprise Act.

It is important for foreign investors to understand these laws

and regulations before investing in Japanese real estate.

Working with a knowledgeable real estate agent

or attorney can help ensure that your investment is legally sound.

 

Cultural Differences

In addition to understanding the legal system, it is also important

to be aware of cultural differences when investing in Japanese real estate.

Japan has a unique culture that can impact the way business is conducted.

For example, in Japan, it is common for parties to engage in lengthy negotiations

before reaching an agreement.

This can be different from other countries

where negotiations may be more direct and straightforward.

It is important to be patient and respectful during these negotiations

to build trust and establish a good working relationship.

Another cultural difference to be aware of is the importance of

hierarchy and seniority in Japanese society.

In business dealings, it is important to show respect to

those who are older or more senior than you.

This can include using formal language and bowing when greeting someone.

Case Study: Mortgage Property Auctions

To illustrate some of the complexities of investing in Japanese real estate,

let’s look at a recent case involving a mortgage property auction.

In this case, a real estate company acquired a single-family home at auction

for resale purposes. However,

They discovered that the previous owner had rented out the property

and that the actual occupant was a subtenant who had sublet it without permission.

They demanded immediate eviction from the subtenant,

but they (the occupant) claimed that there was

a six-month grace period for eviction and refused to vacate.

This situation raised several legal questions

about the rights of the purchaser, tenant, and subtenant.

 

Under Japanese law, if mortgaged real estate subject to lease

is put up for auction, if a lease agreement was concluded before mortgage rights

were established and delivery was received by tenant,

then tenant’s lease rights take precedence over mortgage rights

and tenant can continue to occupy. However,

if tenant acquired lease rights after mortgage rights were established

and has been using or earning income from them before commencement

of auction proceedings, they are protected by six-month grace period

for delivery and do not have to deliver auctioned property to purchaser

(Civil Code Article 395(1)).

In this case, it was determined that no grace period for eviction

was granted to subtenants who had not obtained consent from their landlords (Civil Code Article 612).

As such, the real estate company was able to request eviction from the subtenant.

This case illustrates some of the complexities of investing

in Japanese real estate.

 

It is important for foreign investors to work

with knowledgeable professionals who can help navigate these complexities.

 

Conclusion

Investing in Japanese real estate can be a rewarding experience for foreign investors.

However, it is important to understand the legal system and cultural differences

before making an investment.

Working with a knowledgeable real estate agent or attorney can help ensure

that your investment is successful.

I hope this article has provided some useful information

for foreign investors looking to invest in Japanese real estate.

If you have any further questions or would like more information about investing in Japan,

please don’t hesitate to contact us.

 

Insight

Investing in Japanese real estate can be a great opportunity for foreign investors.

However, it is important to understand the legal and cultural nuances before making an investment.

Working with a knowledgeable real estate agent or

attorney can help ensure that your investment is legally sound and culturally appropriate.

If you are a foreign investor looking to invest in Japan,

don’t hesitate to take the first step.

Contact a real estate agent or attorney today to learn

more about the opportunities available to you.

With the right guidance and support,

you can successfully navigate the complexities of the Japanese real estate market

and make a profitable investment.

So why wait? Take action today and start your journey

towards success in the Japanese real estate market!

Source: 抵当不動産を競落した買受人は、無断で入居している転使用借人に対し、競落物件の引渡しを求めることができるか。

Understanding Key Clauses in Japanese Real Estate: A Guide for Foreign Investors

 

Hello, dear readers and investors!

 

As a real estate agent based in Tokyo, I have the privilege of assisting numerous foreign investors

in navigating the intricacies of the Japanese property market.

Today, I’d like to share some insights on a critical aspect of real estate transactions in Japan

– the extension of settlement dates and loan cancellation dates in sales contracts.

 

This topic is particularly relevant for those planning to finance their property purchase through a housing loan.

 

In the realm of real estate transactions, it’s common for buyers to finance their purchases through housing loans. In Japan,

when a buyer opts for a housing loan, a specific clause, known as the housing loan clause (or loan cancellation clause),

is typically included in the sales contract.

This clause provides a safety net for buyers,

allowing them to cancel the contract if they fail to secure loan approval from their financial institution.

Now, let’s consider a scenario where the buyer’s financial arrangements are delayed,

leading to an agreed extension of the settlement date (the payment date) with the seller.

A question that often arises in such situations is – does the extension of the settlement date also imply an extension of the loan cancellation date?

Read more

Reviving Japan’s Countryside: How Foreign Investors are Transforming Vacant Houses(akiya) into Opportunities

 

 

Reviving Japan’s Countryside:

How Foreign Investors are Transforming Vacant Houses

into Opportunities

 

Are you an overseas investor or foreign national intrigued by the charm and allure of traditional Japanese homes?

 

If so, there is an exciting opportunity waiting for you.

 

As the appreciation for traditional Japanese architecture grows,

 

a promising trend is emerging that not only provides a unique investment opportunity

 

but also contributes to solving a significant societal issue in Japan – vacant houses.

 

Foreign buyers are increasingly attracted to these vacant, traditionally styled homes,

 

often located in the heart of Japan’s beautiful countryside.

 

Fueled by the rich cultural heritage encapsulated in these properties and a relatively lower cost

 

due to the weaker yen, this trend provides an opportunity for foreign investors to own a slice of authentic Japanese culture.

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Safeguard Your Investment: Understanding Bait Listings in the Japanese Real Estate Market

 

 

 

 

 

Do you know ‘Otori-bukken’ ?

 

Truth be told,

 

We have to admit there are a number of

 

shady and dishonest real estate agents in Japan.

 

 

As a foreign investor considering investment opportunities

 

in the Japanese real estate market,

 

it’s crucial to be aware of the tactics some unscrupulous agents

 

 

employ to lure potential clients.

 

Read more

Invest in Japan’s Cultural Heritage: How Foreign Buyers Can Transform Abandoned Akiya Homes into Profitable Ventures

Invest in Japan’s Cultural Heritage:

 

How Foreign Buyers Can Transform

 

Abandoned Akiya Homes

 

into Profitable Ventures

 

 

As Japan’s population declines and properties go unclaimed, an emerging segment of buyers is seeking out

 

rural architecture in need of renovation.

 

There are about 8.5 million abandoned houses, or akiya, across Japan,

 

accounting for roughly 14% of the country’s housing stock.

 

This number is expected to rise as the population continues to shrink.

 

According to an article in NYT, Australian software developer Jaya Thursfield and his Japanese-born wife,

 

Chihiro, purchased an akiya for 3 million yen (about $23,000) after relocating from London to Japan.

 

Read more

Unlocking Wealth in Japan’s Property Market: An Investment Roadmap for Affluent Individuals

 

 

Discovering Lucrative Opportunities in Japanese Real Estate

 

for High-Net-Worth Investors

 

Introduction:

 

Japan has long been an attractive destination for high-net-worth individuals

 

who appreciate its rich culture, modern cities, and stunning landscapes.

 

As the yen continues to depreciate and real estate prices remain relatively low compared to other global cities,

 

now is the perfect time for investors with a net worth of 1-2 million

 

US dollars to explore opportunities in the Japanese property market.

 

Prime Locations:

 

While Tokyo is the most popular choice for foreign investors,

other metropolitan areas such as Osaka and Nagoya also offer attractive investment prospects.

For those interested in resort properties, Hokkaido and Okinawa are becoming increasingly popular choices.

 

Example Properties in Tokyo:

 

Minato-ku, Tokyo: A luxurious 2-bedroom apartment in the upscale Minato-ku district offers

 

investors a taste of cosmopolitan living. With a price tag of around $1 million,

 

the apartment offers a potential rental yield of 4-5%.

 

Shibuya-ku, Tokyo: A modern one-bedroom apartment in the vibrant Shibuya-ku area offers

 

a more affordable investment option at around $500,000.

 

The potential rental yield for this property is approximately 3-4%.

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Real estate investment in Japan : Beautiful Stories, Hard Realities

Beautiful Stories, Hard Realities

Real estate agents/realtors are always holding seminars in Tokyo, Osaka and elsewhere, luring in amateur investors (for Japanese investors so far)

and telling them beautiful stories of how this person or that person got rich in the property market.

I never exaggerate such successes in my seminars, although of course they do exist.

Instead, I always tell the audience true stories from my experience and those of other clients and inexperienced investors, and in particular about the mistakes made.

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How the commission for agents (realtors) works in Japan ?: Risks you should watch (YouTube)

How the commission for agents (realtors) work in Japan ?
The system is very different from that of USA.

In the US, sellers pay the commission to the sellers agents (listing agents) and buyers don’t pay the commission.

(Later, sellers agents split the commission with buyers agents)

In Japan, a buyer pays the 3% commission to buyers agent and a seller pays the same 3% to sellers agent (listing agent)

3% is the statutory rate and not negotiable (it is but I don’t negotiate).

Japan has been infamous for the problem of “dual agency”.

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