Forum Replies Created
John,,
What age are you considering the retirement factor?
There are buildings/complexes that cater solely to over 60 and retirees. These are like mini resorts, spas, sauna, gym, doctors, nurses, hair dressers and all sort of goodies. The ones I have seen are around 2 million to enter.
At the other end of the scale are nursing homes similar to ones in OZ but normally owned by doctors with nursing staff.
Terry,
Sounds like your places are a perfect example of what can happen. Amazes me that REA will show people through places filled with rubbish and requiring reform and expect them to agree to rent without seeing how the place will look after. Basically owners don't want to spend money until they know they have a tenant.
Kev,
Happy New Year!
jcs099,
The Japanese govt is not managing their depression/recession but they are trying to control and maintain deflation. The current economic situation is going to make Japan's situation a lot worse. When fuel virtually doubled over the last 18 months prices stayed the same for just about everything from food to goods and services. A few months back the govt supported an across the board rise in most things of around 15- 20%. Although prices went up wages have stayed the same and more people are finding it difficult. In the last 2 months 80% of major Japanese companies are not renewing temp workers or pt workers which can make up to 30-40% of staff in some places. What makes this situation even worse is that unlike Australia Japan doesn't have a very good welfare system. Most of these workers will not qualify for lost job insurance (unemployment benefit). The govt has said it will try to help but didn't say how. March is when most of these workers will be laid off and some companies laid off workers over Christmas or gave them extended holidays. Extended holidays might sound good but you need to take into consideration that temp and pt workers do not get any holiday pay etc. Job protection is virtually non existent in Japan and bosses make a habit of telling full time workers they are going to be pt workers. This means working the same hours but losing all benefits, like holiday pay, sick pay, over time pay if paid ( most companies do not pay over time pay but expect workers to do over time). When a worker hears that will change from FT to PT they normally quit and then look for another job.
The effect this is having on real estate is big. In my area there is one of the largest Daihatsu plants. They came to this area about 7 years ago and a whole new industry developed around support for Daihatsu both govt and civil. Many realestate companies built small short term lease apartment blocks and a lot of agriculture land was turned into houses, apartments etc. Previously there were about 5 of these short term lease apartments but that number has swelled to over 50. The current economic situation has seen vacancy rates drop to 40%. City hotels comprised of 3, 7 years ago but not there are 6 or7. These hotels all have contracts with Daihatsu and support companies and most operated at around 65-70% and 1-2 at 80% or above. Most of these hotels are struggling now to maintain 35-40% and a price cutting war has started. 5 Years ago a single room was $40-95 but now has dropped to $30-50. Previously it was very hard to find any vacant commercial properties but not there are signs everywhere. What compounds the situation is RE haven't dropped prices. They still expect the exhorbiant prices charged previously and most will not negotiate. Residential houses were also hard to find previously and when I moved just over 3 years ago I had a limited choice of good quality houses although there were a few sub standard to rent. Now there are quite a few good quality houses available and heaps of sub standard. The RE haven't dropped the rents so some of these places have now been vacant for nearly 2 years and there are still most of the sub standard ones vacant from 3 years ago.
The real estate industry is very protective and very hard to break into. Areas that have opened up for foreign investors around the snow fields are only a few and I'm still to find someone who is happy with the investment return they are getting. Those that bought in the initial stages and sold quickly have made some money but most are losing. There will be quite a few investors caught out later when they try to sell tax wise etc. Another issue is death/inheritance taxes which are very steep.
The picture is quite gloomy but like everything there are still bargains around that can turn a profit and the biggest hurdle is language followed by no business ethics. I'm yet to find any RE I would trust in Japan either Japanese or foreign and there are definitely some foreign sharks around. I scrutinized everything they say and show. Recently one major RE developer/company sold most of its real estate and stated that property had gone up 3% in an effort to attract more business. What they didn't say is that they sold the properties to a sister company (basically themselves). The newspapers all reported the rise in property values and this was then stated as a fact to cover all real estate. Some cities even tried to say that sales showed an increase in prices in their areas of 1-3%. All this was started by one very deceptive major company.
If you want to buy something in Japan then expect no CG, lots of taxes, language barriers and the complete opposite of anything done in OZ. When looking at the foreclosure site pay particular attention to the condition of lot of these places filled with rubbish and personal effects of owners/tenants. You have to pay for the removal and it is not cheap. Japan has very high recycle and rubbish fees so be surprised if you get a bill for anywhere between 5-15K. Even the second hand shops will charge you to take the stuff away that they will try to sell.
Doing due diligence is hard enough in OZ let alone trying to do it in Japan. If you are determined to look for something then key areas are mainly around train stations and universities either a 10 minute walk or 20 minute cycle. Make sure in you factor in no rent rises as it is virtually non existent. I've rented 2 places in Japan one has had the same rent for 15 years and the other 3 years. I'm going to ask for a reduction in rent as the house is now 3 years older. If owner refuses then I give notice to move out but only have to pay a figure somewhere between current rent and what I wanted to pay. There is no time limit on how long it takes to move out and the owner must ask the local court for permission and I think the current back log here is about 18 months. Although this situation appears to be in the favor of the tenant most real estate companies have very close ties to crime groups who are quite happy to come knocking on your Relatives doors at all hours of the night demanding payment. Another option is a visit to your work in front of co-workers or even asking your boss.
Japan has a saying called 'YONIGE' or midnight run. This is when people leave everything behind and run off to another city and create anew identity as too avoid bankruptcy. It is so popular it has created an industry of 'BENRIYASAN' people who will help co-ordinate your escape and even look after your possessions whilst on the run. An estimated 500,000 people do this on New Years Eve when so called debts off the year are meant to be paid.
One last thing to be careful of is that Japan has no lender liability laws. If you get scammed there is no recourse.
Are the 2 smaller ones in the same block?
How much is the BC on both situations 2 v 1 property.
Having 2 gives you the option to sell one if needed and still have an IP.
A lot will depend on the size of each unit or room.
You could go with an elevated house and build 1 or 2 self contained units underneath. The elevated could have entrances at both ends of the house and one central room that separates the 2 halves of the top house. Theoretically upstairs would be a 4br, 2bath rooms, 2 toilets and 2 kitchens but each end is a mirror image of the other.
Another alternative would be to build dorm type rooms that are fully self contained with kitchenette and small ensuite. The rear doors could lead into one very large room running full length of the 3 self contained rooms.
clubhonda,
1 & 2 were just personal thoughts on why properties overall may not drop as far as some are suggesting. There appears to be a fair bit of movement in the bottom end of the market especially in the NT with properties still being snapped up. Have been listening for 2 years about how the NT market has peaked yet it was reported that an overall 6% increase in prices for the last quarter occurred but maybe that is just the NT. Falling markets are always an interesting time and for some investors the best time to buy, mainly if long term B&H and the properties are CF+ to start with. Time and time again we have seen the market recover sometimes slowly and sometimes fast but it does recover. There may be better investing opportunities but for some one like myself who doesn't do shares, stocks or commodities then property is the go, even if slow. Have survived 2 recessions so far and are in a good position to survive a 3rd if it hits hard and long.
3, One of my sites based around investing in OZ has seen unique traffic go up 15 fold from 4 months ago. This with the amount of personal enquiries I'm getting leads me to believe that OS investors are definitely looking at OZ markets. Further indicated by the amount paid recently for properties in the NT from OS investors including $75mil for one property and substantial offers on a few more.
Sounds like you have made your mind up about what to do.
What is the size of the pool LxWxD1-D2?
1) Pool currently filled with water. Does have a history of blackspot. Pool guy says the water reading were off the scale so he couldn't get a number.
(Has he heard of pool shock? Throw it in and wait over night. Take reading in morning. Seriously though just empty the pool out if really worried about water quality)
Concrete. We don't know yet if there is a structural problem. From the surface there is cracking to the pebblecrete put on the pool years ago. Essentially both the pool and building/pest guys said we need a pool builder to inspect the structure to advise if the cracking continues into the main structure. (this is as simple as just drilling the area were the cracks are) If it does, the underlying concrete and steel could be decaying and the expense to fix is rather high. Such as filling in the pool more as you mentioned. IT isn't a huge pool as it is and taking 10cm off wouldn't be acceptable for us.
2) Thanks. We won't fill it in. Either the pool is ok or we walk away. We need to live in the house for a few years so the pool is a requirement. (It took me 2 days to fill in a 11×3.5xD.8-2.2 and then cover the top with mulch. All up cost was about $450 including hiring a 2 ton truck for a few hours)
3) The pump, filter and meter system are all on their last legs. IT cannot keep the pool in balance as it is struggling so hard. The unit hasn't got a weather cover so it has been hammered by the sun/heat and rain. No surprise it is dying. Pool guy reckons that there are about $1000-1500 of repairs to do in order for current system to get back to baseline. For $1700-2000 we can get a new system with a salt water conversion and a cover constructed. (I haven't got time for any handy work, my daytime job pays very well but it is extremely demanding on time) (2K is an okay price) (Depending on the type of filter it may take less than 5 minutes to take it apart and then clean the filter)(the pump should be held down by only a few nuts and then dropped off at a pump place)
Having been through a rather complex pool saga which is well documented on this site I will put in my 2 cents worth.
(1) Is the pool currently filled with water? Check the water level and this should give you idea if it is leaking but allow for natural evaporation. Is it a complete concrete pool or partly fibreglass? Depending on the size you could either fit a fibreglass mould inside or a decent concreter can resurface the old pool and reduce the depth by 10 cm all round.
(2) Depending on access to the pool you can back fill with rocks, soil and a bit of mulch, followed by a wood decking over the top can be done rather cheaply and add to the appearance of the back yard. You could also put a layer of sand instead of mulch and have a sand pit for the kids to play in.
(3) Filter systems are rather cheap and not that hard to take apart and clean. Make sure the filter is given a good acid wash to clean it out. They are a very straight forward system to work on. the pump might be another issue but even these are not that expensive.
(4) Fencing also isn't that expensive to fix and if it is only in places then wont cost an arm and a leg.
Most other stuff doesn't sound to serious or expensive except for the decking? How much of the 30K will the decking take?
K,
I see you are using Uncle Mick. That's what my wife calls him. Will pm you.
icecool,
This was my experience with them but I'm sure there are plenty of satisfied customers out there.
Did a check of my emails and still have the messages sent and received to GG.
Linar,
We have some of the same areas covered.
Who does your PM or is it spread amongst the various RE's? Mine is spread.
Do you think you may have sold a little early or have you gone on to bigger and better investments?
Hooker,
And a Merry Christmas to you too.
Must be getting close to the New Year there.
Harb,
Thanks. Christmas isn't really celebrated in Japan and just another working day for most.
Definitely makes me feel home sick for OZ.If, as some say, people start selling their houses because of no work then does this necessarily mean prices will drop considerably?
(1) There are investors waiting in the wings for bargains to come up and it is quite possible that these investors will bid against each other to secure these bargains and keep the prices from dropping too far.
(2) This coupled with low interest rates will also entice new investors with secure jobs to try and grab either these bargains or their first IP thus keeping the prices from dropping too far.
(3) The drop in OZ dollar has created a very strong interest from foreign investors looking to get in to the OZ property market.The contracts should have a specific date for settlement not just 14 days and if 14 days should state if business days. This does get a bit tricky as business days is seen as M-F but recently is including Saturday.
I think Richard has hit the nail on the head.
Check out how long the lease is for and find out what the previous lease was for. You might be able to get enough of a return to cover the drop back to normal rents in 2-3 years if the current tenant finishes and doesn't renew.
In regards to GG.
Not being negative but a few years ago I was getting GG to help out (after referral from member here) with a trust and some other stuff to prepare for my return to OZ. Everything was going fine until the woman handling everything left the firm and next I received a message from the man himself that they wouldn't be finishing what was started as I was OS.
What annoyed me was I was trying to get everything organized for returning to OZ and setting up trusts for my disabled sister and mum who were in OZ and GG just didn't seem to care. I even asked if they could point me in the right direction with another accountant/firm who may be able to help and nothing eventuated.
It was rather disappointing as I had heard many good things about GG and felt let down.
Thanks Michael.
Not a lot of Christmas cheers on this forum.
tugger,
Good to see you at least got something.
Linear,
Definitely agree most areas and some are worse than others.
What area was your unit in before?
Turned 2K (86) borrowed into $1.8 million (08) gross value or 1 million net. Not fast but a nice portfolio for me.
Not from property.
(1) Foreign exchange
Transferred 50K to Japan when OZ was at 105 and then back to OZ when it dropped to high 60 a little while later.
(2) Cars
30K all up getting a car to OZ that sold for 95K.
(3) Best of all.
$10 on a pub meal that has turned into a very happy 10 yr marriage and now a 10 month baby daughter.
