Here we are at April 12th 2006. Hyogo Japan, another real estate project of eleven one bedroom units is now complete. As far as real estate investments in Japan go, to me, it looks like a very nice project. The entire project came in with a 0.01% below budgeted cost and we can see a better than planned 7.8% yield. The last builders left the completed site on the 31st March 2006. The occupants started moving in on the 1st April 2006 and as I am typing this letter all apartments are under contract.
Unlike several other developed nations of the world where Government tax offices manage security deposits (and keep interest earned), here in Japan real estate investors / building owners still maintain the responsibility to safely manage the security deposits for each tenant. With this project a security deposit of 350.000yen per tenant is required. Of this 350.000 yen only 50.000 yen is fully refundable. For the real estate investor who owns this building this means his project's bank account saw deposits totalling the equivalent of one months rent per unit plus the 350.000 yen per unit. In total this comes out at 4.535.000 yen in deposits of which only 550.000 needs to be kept in a safe place to be refunded to the occupant upon leaving the investment property. His bank loan repayments commence on the 10th May 2006. He has paid out less than 600.000 yen in holding costs on the construction loan and about 450.000 yen in agents fees.
If you are reading this blog and feel you would like to take a look at this or any of our other projects we have managed feel free to drop me a line and I will be happy to show you around. If you think that this kind of project is something you see yourself owning in whole, or as a partner with some one else, let me know I will happy to point you in the direction of those who can help you. You may also find more Japan real estate within Japan real estate blog. The rules related to real estate investments in Japan are simple and open, you just need someone with experience and who is on location to show you how.
In Japan, real estate investments need a team if they are to be put together safely and profitably. I am very pleased to say thank you to the team who helped this project become reality. This team is led by Mr. Hirayama of Arthome pty. ltd. It also includes Mr. Nakamura a consultant architect, KTI construction company and Mini Mini Kawanishi Ekimaeshiten property managers. Without these key players this project may well still be in the imaginary stage instead of boasting 100% occupancy, built under budget, quality real estate investment in Japan. Thank you all and know you can own investment real estate in Japan.
Mark Smith.