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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.



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.



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。

Good Looking New listing in Kawasaki city: Apartment with 14 units, 30 mins from Shinjuku

We have got a new listing from Kawasaki city.

I have been there for viewing and photos and video clips.

It has the fantastic financing by the first class Japanese bank (subject to visa and financial background) and foreign national could be eligible for the financing by a Japanese bank .

(Inside the room)

Kawasaki (川崎市 Kawasaki-shi) is a city in Kanagawa Prefecture, Japan.

Read more

Just arrived : Smart-looking apartment building in Yokohama 100% finance !

(China town in Yokohama)

New offer !

Introducing an unlisted property in Yokohama today.

It is a very good opportunity for someone looking for a small size investment in Yokohama.

The yield is attractive and it comes with the full financing.

2-storey residential apartment building.

Location : Konan-ku,  Yokohama city, Kanagawa prefecture
10 mins walk to the nearest station(Keikyu line)
Gross yield (gross return on investment) before the cost : 8.65 % basis 100% occupied
and currently 100% occupied

Read more

Fast track for permanent residency for highly skilled foreigners :Japan’s Groundbreaking New Green Card system

Japan dramatically relaxed Green Card system !
Bold new opportunity to obtain Japan’s new Green Card.
Are you interested in Japanese Green Card with Japan’s social security and universal healthcare service ?
Here is what you should do. 
Invest in the property here and get the ‘business manager’ status.
Japan is facing the acute shortage of workforce.
To address the issue, Prime Minister Abe has been drastically relaxing the immigration control for both low skilled workers and high skilled professionals.
Japan needs both low skilled workers as well as advanced skilled managers.
There is a new visa category called Highly-Skilled Professionals (HSP).This new category was relaxed dramatically last year and now Japanese government is offering preferential treatment for the category, which makes applicants much easier to apply for the so-called

In this relaxed category, HSP can apply for ‘GREEN CARD’ earliest within ONE YEAR (subject to your points) after you
get status of HSP. The Green Card application procedure is based on the points-based system.
The new approach follows the government’s introduction of a point system for highly skilled professionals in 2012.
Under this system, people are scored according to factors such as academic background, career background and annual salary, and are categorized under the field of “academic research,” “technical activities,” or “business management.”Read more

How the investment in a local city works ? : Opportunity to invest in center of Sapporo residential building. No down payment is needed

(Night life Susukino in Sapporo)      (Odoori koen)
No down payment is needed.
Remarkable opportunity in Sapporo is up for sale in Sapporo.
One of my business partners has come across a pretty good property in Sapporo in northern Japan.We don’t usually deal with a property in Sapporo.
However, as the project already has passed the provisional review by 
a premier Japanese bank, I am introducing it on his behalf.
Let’s find out how viable it is.
Oh, by the way, If you seek investment that can expect the appreciation of 20% over next 3 years,
Japan is not your destination. Please go and find a property in countries like Thailand or Vietnam.

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Real Case Study : How viable is buying a property to rent in Japan ? : How to get Financing and Tax implication

(Yokohama city center)
Evaluating Real Estate as an investment
According to an article in USA today, single-family homes in large U.S. cities have generated returns of about 9% annually on average,
according to the study, which examined results from 1986 to 2014.
Yes, there are risks in real estate investment.
Becoming a landlord isn’t without its risks — from bad tenants and periodic market slumps to changing tax laws and natural disasters
such as tsunami and earthquake.
The principle and the mechanism of the real estate investment in Japan is exactly the same

as other countries.In theory, you borrow the money at 3% from a bank and buy the real estate that generates 8% yield.
The spread (in this case 5%) is your profit.
You don’t need the rocket science.   But really ?  Let’s find out how viable it is.
In financial parlance
it is called ‘leveraging’.

Leveraging does not necessarily mean success.
Skeptics about the real estate investment in Japan where the population is
declining and rapidly ageing have lots of ammunition.
Leverage magnifies all of your returns and those returns aren’t always positive!
f you want to make investments where you can expect the appreciation of 20% over next 3 years,
Japan is not your destination.

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Are you interested in akiya 空き家(unused house) for free in Tokyo ?:How to find a house for almost nothing in Japan ?

(Okutama lake in Okutama town, Tokyo)

You can find “abandoned houses”  all over Japan, due to the country’s shrinking population.
The ministry of land, infrastructure, Transport and Tourist(MLIT) reported in 2013
that about 8.2 million (about 13.5% of total) houses and apartments were empty.

In fact, this 8 million number which often catches media attention is very misleading.
It includes the rooms and houses for letting.
Taking the fact into account, there are about 2.2 million akiya ‘real empty houses’ (abandoned houses)
in the market. Still daunting number in deed.

One report said vacant land and homes could by 2040 be as big as Japan’s northernmost island of Hokkaido—about 83,000 sq km (32,000 sq miles), or the size of Austria.
The area is currently about 41,000 sq km, slightly bigger than Japan’s southern island of Kyushu.
Many of Japan’s 8 million abandoned homes—or akiya(空き家)—are often left empty indefinitely.
Why do we have so may abandoned houses ?

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