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  • Profile photo of dl_gleesondl_gleeson
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    @dl_gleeson
    Join Date: 2003
    Post Count: 37

    Hey. I am also in Japan. Kobe. Would appreciate it if you could give me a mail or post a message here as I am also interested in investing and would like to trade a few ideas as to how to do it from Japan.
    Cheers
    David
    [email protected]

    Profile photo of JapanScottJapanScott
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    @japanscott
    Join Date: 2003
    Post Count: 37

    Hey David,
    I am in Nagoya. Was wondering if anyone else was in Japan in this forum. What part of Aus you from?

    Scott

    Profile photo of dl_gleesondl_gleeson
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    @dl_gleeson
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    Am from near Wagga Wagga although went to school in Sydney and have come straight from there to Japan. Am at Kobe uni doing economics. I am here on a 5 year program and have done 2.5 of those years. Teaching on the side to save some cash to take home and invest. I am only 20. A bit young but gotta start sometime. First got keen on investing after reading Robert Kiyosaki’s rich dad poor dad and have just kept buying books and reading since then and looking on this site. Are you actively looking at properties now and planning to buy before going home or are u just learning now? Have you looked into getting finance here instead of in Aus?

    Profile photo of JapanScottJapanScott
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    @japanscott
    Join Date: 2003
    Post Count: 37

    Hey David,

    I came over here after schooling to, but that included university. I am 25, grew up near Brisbane. Moved over here to teach English after doing an engineering degree and an arts degree(economics/japanese).

    Been over here two and a half years too. Am only just getting into the research over here. Going back to Aus next year, so mostly am just reserching over here for when I go back. Haven`t looked too much into finance from Japanese banks. Some Aus banks will lend you money in yen, so maybe some Japanese banks will lend you money in A dollars. Depends where you earn you income I guess at to what you want the loan to be in.

    Are you looking to stay in Japan to work after you graduate?

    Scott

    Profile photo of dl_gleesondl_gleeson
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    @dl_gleeson
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    Post Count: 37

    i just saw an ad a while ago for finance from japanese banks for investing in real estate in the US, UK, Aus and i think NZ. I didnt take too much notice because i wasnt really interested then.was maybe about the end of last year. dont know if it is just for japanese people or what.have heard from somewhere that u can be a foreigner but must be working in Japan and earning yen. dont know if that is just when u apply for the loan or for the term of the loan or what.just remember that the rate they were offering was about 1%.that would make nearly any property cashflow positive. would imagine that they might be willing to lend in aus dollars which would take away risks involved with exchange rates as all the banks here advertise for people to invest in aus dollars so they must like it as an investment option.
    i think i will have to work here for maybe 2 or 3 years after graduation because my degree wont be very well known at home but is very well known here. i will apply for jobs here and home and maybe the us and uk and see what happens but my best chance is here i think. but then i wanna get home after a few years hopefully with some cash to start investing. so now i am just learning. i would like to start now but i dont have any money and also have basically no bank records in aus so it would be difficult to get a loan i think while working here. also going on dolf de roos book with the 100-10-3-1 rule i would not be able to spent enough time at home to look at enough properties to be confident of my decision i think.

    Profile photo of JapanScottJapanScott
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    @japanscott
    Join Date: 2003
    Post Count: 37

    Hey David.

    I haven`t been to any banks to find out about getting a home loan. I was talking with a student today about this. He seemed to think it was very difficult for foreingers to get a loan from a Japanese bank, but that was for investing in Japan. Not sure about using the funds to purchase in Australia.

    The interest rate is great over here for borrowing money, I am trying to find good ways to take advantage of it given my situation. I will be heading back to Aus early to mid next year, so borrowing in yen is not such a good idea if I am earning Aussie dollars.

    I will keep looking into it, and let you know if I find anything good. Keep me posted if you find out more.

    How is your Japanese? Pretty good I assume if you are studying over here at uni. You said you are studying economics…why isnt your degree so well known in Aus? What kind of economics?

    Scott

    Profile photo of dl_gleesondl_gleeson
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    @dl_gleeson
    Join Date: 2003
    Post Count: 37

    hey
    my japanese is ok i guess but not great. i came over here knowing nothing and just had a one year full on course where we covered heaps of stuff. we did about 1600 kanji in 12 months. now i guess it is reasonable conversational. definitely not business level but can hold my own with most people. my degree is just a standard economics degree. what i mean by not well known is that for jobs, particularly in the finance industry where i am interested in, the name of the university is fairly vital and in aus very few people would know kobe uni. but in japan it has an unbelievable name especially for economics so maybe i can get a job with a well known company and then go home with not only my degree but also experience at a well known company. thats the theory anyway.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Guys

    I used to live in Japan too, and looked at some loan products available over there. NAB (and others?) offer loans in Yen for property located in Australia. Interest rates are about 2%, with an LVR of 70%. but if you stop earning yen or return to Australia, you have to pay back the loan or switch over to Aus$. You need 2 pay slips as proof of income (don’t know how long you have to be working). Can also get a yen loan for a property you already own in Australia (ie refinance into yen).

    Have you guys been looking at investing in property over there? I believe it is very hard for the average person to get a loan with the banks generally wanted about a 30% deposit and 3 years work history. Sounds like a good market for wraps? properties are also cheap at the moment.

    Does anyone in Japn need a mortgage broker to come and visit? (I need a tax deductible trip).

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of dl_gleesondl_gleeson
    Member
    @dl_gleeson
    Join Date: 2003
    Post Count: 37

    real estate investing in japan is very different from the standard australian concept of investing. This is because the prices are so high. During the real estate bubble which burst in 91 the aggregate value of all the real estate in Japan was worth 50% more than the rest of the world put together.prices have gone down alot since then but i think u get the picture that real estate investing is not for the average person. Middle class families spend their lives paying off their box(apartment). also real estate investing is a bit of a dismal science over here at the moment. Just this thursday they released the national real estate growth figures for last year. It was the 12th consecutive year that prices had fallen.
    Another consideration i the fact that your investment as a foreigner would not be welcome over here. Dolf de roos in his book real estate riches specifically mentions Japan as the prime example of a country which makes it very difficult legally for foreigners to invest. I cant give u specifics on how but i am certain that it would be an extremely difficult and frustrating experience investing here.
    Also keeping in mind how rediculously expensive property is here the only place most of us could afford would be out in the sticks. That then begs the question about how important population growth is to u, because there is no country areas with population growth. The national population is meant to stop growing in 2005 and there is a massive exodous from the country to the city.thats just what i reckon anyway.

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Do you think it is still expensive?

    My family owns a townhouse type (like half a duplex) property in Suita, just 15 min from the centre of Osaka. My grandmother in law bought it in 1943 for about 2,000,000 yen. it is now worth about 10,000,000 yen (about $140,000). Not very expensive, as my guess was initially about $500,000. It is in need of some renovation, and would rent for about 50,000 yen per month as is. There a re lot of new apartments popping up, so not too much demand for these old houses.

    i don’t think it is hard to invest or buy property in Japan as a foreigner. But it is very hard to get a loan-even for citizens. probably because of all the bad loans that the banks experienced in the 90s.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JapanScottJapanScott
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    @japanscott
    Join Date: 2003
    Post Count: 37

    Hey Guys,

    From what I hear talking to people, if you have the money it is easy to buy here, and if you don`t you can`t borrow here, so tough. As for the prices of properties here, I have only just started looking at them. Was dead keen to invest in Aus, but with the price rises there decided to have a look around here.

    I live in Nagoya, which is a few hours east of Osaka, about 6 hours west of Tokyo. Third or fourth largest city in Japan. Excellent transportation system here, so you can live a bit out of town and not worry too much. Prices for houses are kind of expensive in the city, but if you go out a bit, price drops off. Apartments are pretty reasonable I feel.

    A lot of new development as the Japanese economy shows signs of picking up. They are also building a new international airport here, due for completion in 2005, when Aichi (prefecture that Nagoya is in) will hold some kind of Expo.

    Property prices declined this year for the 12th year in a row, but indications are that it has just about bottomed out. I just wonder about the other costs such as city tax, land tax, water, etc. Plenty of opportunities for a smart investor I feel. Now I just have to become a smart investor. Ideally I would like to invest in Japan and Australia.

    As for the trip Terry, I`ll keep you posted. Do you have much experience with Japanese banks? :)

    Scott

    Profile photo of dl_gleesondl_gleeson
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    @dl_gleeson
    Join Date: 2003
    Post Count: 37

    Terryw, I must admitt I am a bit surprised by how cheap your place is in Osaka. I am not disputing the price I just didnt realise how much the market has come back since the bubble. What I know about the market is just stats from the bubble and stuff locals have told me about it so it is not really that up to date. And the current prices I have looked at here are just in my area which is only one station from the centre of Kobe so is probably a bit more expensive than normal. With your apartment, if you are having trouble finding tennants then you might like to aim for the student market. A lot of the students that go to Osaka Uni live in Suita. I understand that there can be problems with students but it is an excellent uni and all the students there would have had to work like crazy to get there so they are on the whole pretty studious and quiet. I say this because i go to Kobe Uni and it has about the same reputation so I am going on what my classmates are like. If you do wish to do this a good idea maybe be to get your real estate agent to contact the uni coop as they probably have a section for finding accomodation for students.
    The bad loans here are still a big problem here. As of the 2002 financial year they were still increasing because alot of banks and politicians are reluctant to force painful change. The financial services and economic minister Takenaka has been trying to sort the problem out and last year drafted a bill to tighten up the rather poor accounting principles of the banks but it was watered down to the point of being useless by the old guard of the ruling LDP.He has however succeeded in making the auditors be tougher on banks and this resulted in Resona Bank being found to have a cash ratio below the required level so some things are being done to solve the problem. A reasonable period of sustained growth and the resulting increased profits for business might knock a bit of a hole in the problem but profer principles must be put in place to ensure the problem never gets as bad again.
    Japanscott the reason I am not as confident as you about the market improving is that the 3.9% annualised growth for the last quarter was almost entirely because of increased exports and not because of a strong domestic sector. This means that domestic spending hasnt really improved that much yet. It is basically the opposite to the Australia’s situation where economic growth dropped greatly because of the export sector (drought and terrorism/SARS related drop in tourism) but domestically Aus is still pretty much going along like a dream (although the possible real estate bubble is causing worries). However I do think there are many opportunities for the savy investor particularly ones looking for positive cashflow rather than quick capital gains. I dont know much bit I would imagine that with 1% interest rates even properties with the most average rental yields could be made cashflow positive.
    Finally, would you guys ever have the confidence to invest here, particularly without much investing experience elsewhere? The reason I ask is that I am dying to start but I cant get home at the moment for long enough to build a team,study an area etc and here i dont think i could ever be confident enough that i know enough given the language barrier. I think i would feel that i have missed stuff cause I dont understand Japanese 100% or that I couldnt be as well researched as if I was in Aus. What do you guys reckon?

    Profile photo of JapanScottJapanScott
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    @japanscott
    Join Date: 2003
    Post Count: 37

    Hey David,

    Yes, I would invest over here if I were staying in the country another few years. A little more research into hidden costs would be a deciding factor though. Assuming you are investing for cash flow and not capital gains, I think Japan would be a good place. Another member on the forum has put offers on places from Japan, see the post `HECS debt`.

    I agree that the exports are the biggest factor in Japans growth, and they look a bit under threat with the strengthening yen, so the situation is not as rosy as it sounds. But if you do your homework, and invest wisely, I think that you could ride out any downturn.

    Had a quick look at some home loans here on the net. None of the banks mind you. The cheapest I saw was 2%, maximum limit of 50 million yen. Not too sure about the fine print yet.

    What are your thoughts about Japan v Aus at the moment? Thought much about investing in Japan?

    Scott

    Profile photo of dl_gleesondl_gleeson
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    @dl_gleeson
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    Post Count: 37

    I agree with you that hidden costs would be the worry here, particularly due to the language. I would also want to find some good research material hopefully in english before going anywhere. I also agree that for cash flow rather than capital gains this could potentially be a great situation with such low interest rates and with good cash flow any further drop in the market could be ridden out.
    Regarding Aus versus Japan, until the last few days my plan was to graduate in 2 and a half years with some cash and work for 3 years to get more cash while putting it all in some sort of fund back home, probably an index fund. I thought that by the time i got home in 5 years the Australian market would hopefully have rationalised a bit. But from this post and others and a bit of looking around over the last few days the Japanese market has caught my attention. I think with such a depressed market there has to be heaps of bargains around as there is such negative sentiment around and nobody seems to be considering investing locally. I think anything other than sticking your money under the mattress is unpopular here at the moment. Saw a figure that I have my doubts about that there is US500bn dollars under Japanese mattresses cause they have no confidence even in the banks(especially the banks). With this reluctance to buy and financial hardship forcing many to sell there must be opportunities everywhere. I would be reluctant to enter the Australian market at the moment because I gather from this forum to cashflow any property would require some more creative ideas like wraps or renovations or something like that and I would probably want to start on something more simple like a standard buy and hold strategy. So for that reason the Japanese market would be more attractive i guess.Some other drawbacks to investing in Japan that i can think of off the top of my head is that I only have a student visa with permission to work part time atm rather that a work visa so that may affect things. Also I dont know how the banks would like me going home while still having loans. And if that was ok and I went home I wonder how much business I could conduct coming back on just a tourist visa if i had to in the future. These are just some ideas I have thought of. May not be a problem but would just have to find out. Also going around and conducting interviews to build a team seems dawnting enough at home let alone in Japan but it would be a learning experience.
    Have I thought much about investing in Japan? To be honest, until about 2 or 3 days ago….nope. But atm I am very keen to at least look further into it and see what the possibilities are. Plan to talk to a mate from NZ in a few days who has married a Japanese girl and bought an apartment here and see if i can learn a bit from him and then maybe look around for a few resources and see what the story is about finance and so on. I dont know what to expect but just quickly last night I looked at the Japanese Yahoo in the real estate section and found a place in ten minutes for 4800000yen in the centre of Kobe with 3 bedrooms, living room, laundry and kitchen. It was a bit old admittedly but my friend and I both agree that it should confortable rent for way more than 150000yen per month from our experience of renting here. However that is a rental yield of 37.5 percent I think so I believe i must have missed something or the place must be in very bad condition. It was about 28 years old and while being listed in order of price was surrounded by one bedroom places so something is amiss i think. Either way is definitely worth further inspection.

    Profile photo of JapanScottJapanScott
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    @japanscott
    Join Date: 2003
    Post Count: 37

    Hey David,

    Centre of Kobe for under 5mil, sounds really good. I think that with the building being so old, one of the biggest things to consider is earthquake resistance. I recall hearing something about builders changing to a better structure around 10 years ago or so. I have only been looking at places 10 years or younger.

    You are right about getting a team together over here. I can forsee lots of difficulty being a foreigner, but I am sure there must be some advantages. I am getting a few ideas, but so much to consider. I would love to hear what your mate in NZ went through re the buying process over here.

    As for when the you go home, maybe you can refinance with an Australian bank, pay out the Japanese bank…if you can get a loan here. I think that if you have owned the place for a few years here, maybe Aus banks would do this.

    As for getting finance, I have read a few people get a loan from their company if they get turned down by the banks. Just a thought if you look into it more, but finance is a problem. I actually had a 0% loan from my company when I came over to help me set up. Cant ask for better finance than that!

    Scott

    Profile photo of dl_gleesondl_gleeson
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    @dl_gleeson
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    Your right the building standards are a factor, particularly here where they had the earthquake in 1995. Think they lifted their standards after that, here at least. Will have a look and see if there is any obvious increase in prices for properties built after the quake. Cant see myself getting a loan from my company as I dont have one. I just work about 7 or 8 hours a week and they are basically just private lessons or in small schools. I get an allowance from the Japanese govt and uni is paid for by them so I dont need to much and dont have much time to work. I can get interest free loans from them but the limit is about 150000yen so wouldnt mean much and has to be paid back within a few months. If u get any cool ideas or interesting stuff please give me a mail or a message.

    Profile photo of JapanScottJapanScott
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    @japanscott
    Join Date: 2003
    Post Count: 37

    Hey David.

    Just suggesting the idea about the company for when you start work over here. Been looking at a few apartments in Nagoya, looking for extra costs. From what I have seen, body corp and sinking funds(or Japanese equivalent) can range between 10000 to 20000 yen per month (combined). That was in the city, and larger places had higher rates. Didn`t see much info about rates though. Keep looking I guess!

    Scott

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Guys

    A couple of years ago, I started an email discussion group about investing in Japan. It ended up dying off, and got flooded with spam. But it was a good way for people to stay in contact and discuss investing relating to Japan.

    Would you be interested if I started another group?

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JapanScottJapanScott
    Member
    @japanscott
    Join Date: 2003
    Post Count: 37

    Howdy.

    Sounds interesting Terry. As I can see myself coming back to Japan frequently, seems like a good idea to invest over here. International portfolio…nice ring to it.

    Scott

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi

    I have jsut set up a discussion group so we can all discuss investing in Japan. There is a home page at:
    http://groups.yahoo.com/group/Japan_property/

    Or you can subscribe by sending a blank email to
    [email protected]

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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