JRE Buying process

Why Japanese Real Estate?

There are several reasons for recommending Japanese real estate, as follows.

1. The Japanese real estate market is huge and stable.

JREThe Japanese real estate market is the second biggest in the world, and it still has room for further expansion.
Even as the market cooled following the Great Recession, income from Japanese real estate remained steady.
In addition to Japan being politically stable, there are no differences in its application system between domestic and oversea investors for real estate transactions.

2. Tokyo is one of the safest cities in the world.

JRE JREAs shown in the figure below, Tokyo was ranked the safest city in the world in 2015.

3. Trend for Japanese Real Estate

Real estate prices in Japan showed a rising trend until 2008.
After the Lehman Brothers shock, however, they fell precipitously. And prices remained low for a while.
Real estate prices began rising slowly following the Japanese ABENOMICS policies, with prices and values nowadays maintaining a high level.
Additionally, the Tokyo Olympics are set for 2020.
So the price of real estate in the Tokyo market is expected to remain at current levels or to continue rising until after the Tokyo Olympics.

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The vertical axis shows the rate of price variability; the horizontal one shows the year.

Why the Tokyo area?

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There has been a recent increase in real estate purchases by foreigners in Japan due to the upcoming Tokyo Olympic Games in 2020 and the falling Japanese yen.
Foreigners from many countries, including from Europe, America, Asia, and Oceania, have bought Japanese real estate for either investment purposes or their own use.
Foreigners are increasingly becoming the owners of real estate such as condominiums and the commercial buildings in Central Tokyo. 

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General Real Estate Purchasing Procedure in Japan

Step1 : Locate properties for sale
Gather property information, then, based on your requirements, arrange by priority - price, yield rate, location, scale of the building, etc.
Where possible, go and see the potential properties in their locations.
However, if you are unable to go to Japan, we can provide whatever information you require.
Review the information you have gathered and decide whether to buy.
At this step, determine your price and purchase requirements.
Step2 : Submit LOI
Set your price and requirements and indicate your intent to purchase.
Negotiations with the owner can now commence.
Popular properties will sometimes attract multiple offers at once.
If taking out a loan, try and obtain a preliminary review from a financial institution.
The extent of your ability to negotiate will vary depending on the property.
Try to elicit the seller’s circumstances as far as possible in order to proceed in good form.
Step3 : Conduct Due Diligence
Any defects to the property will be identified in the "Property Disclosure Statement of Important Issue" submitted by a licensed real estate broker.
An Engineer Report and Market Report are not usually needed.
Step4 : Sign PSA
The Date of Contract and Date of Closing are usually different. A 10-20% deposit is customarily required when the PSA is executed, with the final payment made at closing.
Individuals and general companies will use recourse loans and therefore avoid detailed due diligence procedures, while professional investors will use non-recourse loans.
 

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Buying process

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