March 11th – Three years on


To all the people who lost their lives, loved ones and homes in the Tohoku earthquake and tsunami. May you rest in peace. We are sorry for your losses, and hope that you stay strong and serve as a beacon of hope and remain a constant reminder to all of those who live on that the human spirit is what keeps us going.

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#protip – Japanese real estate websites


Alright.  So a lot of you are looking at property online and the number of english websites is limited. So here is a (hopefully) helpful glossary of terms you will find on Japanese property websites.

Glossary

Some other important things to remember:

Most properties advertised online are non-exclusive, meaning the agent or agents advertising the properties are not the same as the management company. Often agents will advertise the cheapest price for units available in the building next to photos of the biggest, or nicest

Japanese websites generally advertise the rent separate from the management or maintenance fee. Always remember to add the two together to get your monthly total. Often, with one bedroom apartments the water is charged as a flat rate. So look for this too. Usually 2000 yen per month.

#Locksmith fees: different from key money, is a one time fee to replace the barrels, keys, and locks on the door of the apartment. Required by 99% of properties.  Prevents any and all previous tenants from accessing your new home.

#Insurance – renters, fire or otherwise. Yeah, you want to pay for this. this covers you for damage caused by you to the building in the event of a fire, or if you flood your apartment by leaving a sock in the washing machine drain. (this happens more than you think)  Two stories: a close friend accidentally flooded his, and his downstairs neighbors` apartment and got stuck for 1 million yen in damages (no insurance). While another tenant had some water damage caused by an upstairs neighbor (insured) and received 1 million yen in damages. Usually 10,000~20,000 yen for 2 years.

#cleaning/sterilization/sanitation fees – 50/50 on these. Usually required by the owner. If the apartment you are interested in has it = unavoidable unfortunately.

#24hr “life” “support” “anshin” etc fees. – these are usually unnecessary given that the only support you will receive will be in overly polite japanese over the phone, but come in handy when you break a window, lose your keys or your plumbing decides to stop performing it`s specified duties. As above, if required = unavoidable.

#club fees – my advice: stay away from properties which require these. Any services and benefits don`t reall outweigh the costs.

 

 

“What`s the deal, with key money?”


Read in Jerry Seinfeld stand up comedian voice.

Key money – or reikin 礼金 is better translated as a gratuity, or as one of my clients once remarked “So, it`s like a cover charge, at a bar, with a twelve drink minimum?”

Paying money, in order to pay more money at regular intervals. It sounds like a pretty terrible deal. Something to be avoided like a plague.

There are a couple of schools of thought about the origins of key money. Post-war housing shortages, urbanization, and population growth. The sugar-coated story goes, the house hunters were so happy to be able to live in the landlords property that they gave a gift of a couple of months worth of rent, to say thanks. I will go ahead and call BS on that. Post war landowners knew there was plenty of money to be made off people who needed a roof over their heads, so they price gauged. There was no shortage of prospective renters*. in fact the land owners were happy to have a high turnover of lump sum donating tenants. Why settle for 12 months rent per year from one person when you can get 3 or 4 times that from a succession of desperate and essentially homeless people?

*Real estate agents know that this is not exactly the case these days, but still operate in this way. Japanese real estate is a buyers market, but the sellers will never admit it.

This nastiness was brought to a halt by the government who installed laws protecting the legal rights of the tenant as resident. Making it very difficult for them to be removed from the property. Unfortunately, this had a negative effect too. Landlords who can`t legally remove tenants, either responsible, truant or just plain terrible, tend to charge more key money.  The landlord uses the upfront payment as – for want of a better term – an a##hole filter. If you as a prospective tenant can`t come up with 3 months rent as a gift, what makes the owner think you can afford to pay for 12 months rent, or 24, or 48? One could argue that after paying key money, you could just live in the landlord`s property for 6 months without paying rent while the landlord goes through the correct channels and legal proceedings, and you know what? one would be right. One of the reasons the initial costs of moving house in  Japan is so preventatively high, is because there are people who do just that – move in and never pay rent, until they are legally evicted, safe in the knowledge that their legal right to a place of residence represents a stronger argument than the property owner`s right to his rental income.

So, how does one avoid paying an arbitrary “Thanks for the house, guy!” down-payment on your new landlord`s boat? That is the real question.

First, let your agent know that you are trying to keep your initial costs as low as possible, but also understand that about 3 month`s rent up front is what you will need to cover all the required fees. Sounds steep, I know, but this includes essentials, like insurance (need that), and guarantor company fees, (see our last post) and an agent fee, (again if it`s a trustworthy agent you are working with, they can negotiate here) and your first months rent.

Second, look at apartments that are advertised without key money, or Zero/Zero. AND also look for properties with 1 month of key money as an option. If you are only looking at No key money property, you seriously limit your options. A lot of people think of it as a sum of money that they are never going to see again, which is basically what rent is anyway, yes? For further justification, divide the key money by 12 and add it to your monthly rent, if the total is still within your budget, then what`s the problem? At least in Osaka, key money is a one time thing.

Third, UR property. These properties are operated, advertised and managed by the Japanese Department of housing. UR property can be rented by anyone living legally in Japan, provided you earn enough or have savings of a certain amount. The only payment required when you move in is the first month`s rent and a fully refundable  security deposit equal to 2 months rent.*

* 3 months security deposit required on some properties.

Fourth, Leopalace. The ubiquitous, single person, everything for everyman, self-contained “Honey, I shrank the house” apartment. Leopalace apartments are like what I imagine living in the international space station would be like. Or Bruce Willis` apartment in The Fifth Element.

Fifth element apartment rendering

and finally D. The “gaijin” apartment. Generally privately owned, often furnished, convenient and hassle free. These properties make great first apartments. But in my experience, everyone who lives in a “Gaijin” wants to move out within a year, if not sooner.

So, there is a fairly un-comprehensive wrap up on key money.

No-one really wants to pay it.

“Do I need a guarantor?”


Tough question,  if you need a guarantor, you need a guarantor.

If you don`t, you don`t.

The real answer is:

You, personally, don`t really need a guarantor, a personal guarantor benefits one party only – the owner of the property you want to rent. They need the assurance of a co-signer. Someone who will fulfil your legal obligations should you disappear, or just decide to stop fulfilling.

Unfortunately for most of our non-Japanese residents, a guarantor is pretty difficult to come up with.Family members living in Japan can be few and far between. Significant others can become ex-significant others. Japanese co-workers and employers usually balk at the idea of entering into a legally binding agreement with someone they don`t know that well. In general, Japanese people will only ask family members.

Who can I ask?

Again, tough question, the real point is who is going to say “OK”?

A guarantor needs to be a Japanese citizen, currently employed, or receiving superannuation, and living in Japan.

Examples from experience:

University Professor – usually only for former students. Some universities have agreements where they will guarantor currently enrolled students, but professors usually are not allowed to. But if you have a good relationship with a professor, and they want to see you do well after graduation, then go ahead and ask.

Sensei – for those who are here in Japan on cultural exchange visas. One of the things about a cultural visa, is the commitment you have to learning a traditional art form, or practice. You sensei should be able to trust you to fulfil a similar commitment.

In-laws – only for those who are both married, and on good terms.

Work-mates – if you are close, and they trust you. Unfortunately, your employer is not a suitable guarantor, unless your employer actually forms a lease on your behalf. Most employers don`t, unless you are being transferred from another country, to a Japanese branch.

Significant others – good way to test boundaries. This is fine if you are close, and DON`T intend to live together, your guarantor cannot be a co-occupant.

So where does that leave all the rest of our un-married, recently employed, un-cultured, non-relationship types?

Trust Japan to come up with an idea for something you never knew you needed.

The guarantor company. Sounds simple, a company that performs the same duties as a personal guarantor, for a fee. Now that sounds like something people will get behind. In most cases, the guarantor company simply covers you for any losses you incur, covers the landlord for any late mortgage repayments, and pays your termination penalty should you skip out and leave the landlord in the lurch.

A good guarantor company will only require an emergency contact, will cost less than one month`s rental payment, cover you for the first year of your lease, and if you are good little tenant, the renewal fee for the next twelve months is just 10,000 yen.

What`s the catch? Well, a bad guarantor company will require you to have a personal guarantor anyway…. the worst will require that personal guarantor to be a family member. Let that sink in, a Japanese, family member.

In theory, a guarantor company simplifies the old process of having a co-signer on your contract. It gives the owner of the property a greater assurance of regular rental income, and it allows non-japanese residents to rent the same property our local counterparts do, in the same way.

In reality, it is an extra months rent paid at the start of the lease, that you never get back.  If you are a responsible, regular, law-abiding tenant, it seems a bit unfair. But like a lot of things in life, everyone else has to suffer, so why should you be treated any different? It is a fee, that pays for a service that you need if you want to rent property.

Good agents will be able to help you with finding property with guarantor companies which are more accommodating,  and avoid the nasty, strict ones.

Living in Japan – next step. Buying a home.


For a lot of people, myself included, the thought of buying property in Japan was never really an option. Financial institutions have understandably strict criteria regarding who they will lend money to. Sure, if you earn a certain amount, and you are a permanent resident, preferably by way of marriage, and you have a 10% deposit then yes, a low-interest 35 year mortgage can be yours.

While that represents a small section of people currently choosing to make Japan home, after more than 10 years of renting a lot of different apartments, like a number of other people, I decided to switch gears, and buy a home.

First issue: finance

As a non permanent resident, with a non spotless tax record, married to a non-company employed artist, I am persona NON grata with Japanese banks.

Overseas banks require a monthly combined income of more than we currently make, and charge a higher interest rate.

Finance 1 – Us o

Next option, cash. AKA why would anyone not do it this way? a couple of reasons straight off the bat:

actual cash or lack thereof

ignorance

or not wanting to buy a really cheap house…

Wait, what? You can just buy an apartment in Japan, with the equivalent of a 20% deposit on a house in New Zealand?????

yes, as long as you are happy with something a bit older. I am, and the approval of my wife is conditional on renovations. Again, something I am happy with.

So that`s what we did, we scraped together our life savings and had 75% of the purchase price of a 30-year-old apartment. With some negotiating, we talked the price down, borrowed some money from the in-laws, and took the leap.

After helping hundreds of people find rental property, I can now say with confidence, that the actual purchase of property here in Japan,while complicated and a bit stressful, is actually easier than renting an apartment.

How, you ask? the big difference is that the seller has already said they want to get rid of this property, they do not want it back, and are not really concerned about who buys it, or what they choose to do with it. As long as you have the cash, you could be using the property to host human sacrifices for  all they care.

A property owner who rents property is going to want every imaginable assurance that there will be no late rent, no feline micturition,  blocked drains, or soirees, let alone arcane rituals during your lease term.

Most people who rent here in Japan have experienced the stress of applying to rent an apartment. Providing an often uncomfortable amount of personal information and being left in the balance for a few days, while a faceless entity decides your fate. This does not happen when buying. Your offer, the number written on the piece of paper and only this number is up for consideration.

A lot of people have asked me how I can consider property built to depreciate a wise investment. This comes from a very western idea of property as a perpetually appreciating commodity. Here, most residential properties are built as single generation homes.

Buy new – live in for the life of the mortgage: 30  – 35 years – demolish and sell for the price of the land at the end.

Even though our new home is 30 years old, and at the tail end of its depreciation cycle, the previous owners did pretty well out of their investment.

Again,  “How?”

They got a brand new house, for 10% deposit and made monthly mortgage payments at a fraction of what the same property would cost to rent  for 30 years and then walked away with about 30% of the original purchase price. Now property taxes and maintenance fees stack up, and the previous owners may not have experienced any capital gain from the sale, but a lifetime of savings are the motivation behind most people’s decision to buy a family home.

Hopefully my wife and I can look at our house in 30 years and say ” I think we did alright”.

A “western” apartment in central Osaka.


Privately owned and operated modern building. Located in a quiet neighborhood just 5 minutes from Osaka castle park. Walking distance to Nakanoshima island and the river. Quiet and relaxing with only one apartment per floor. Feel right at home in this spacious western spec 1LDK. No guarantor required.

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Huge, open plan living space, separate kitchen with plenty of stainless counter top space, built to western standards with twin sink, european dishwasher AND washer-drier built in.

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High ceilings throughout, and tons of closet space.

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The Master bedroom has its own balcony

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huge closets and adjacent full bathroom ensuite.

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A second, guest bathroom is adjacent to the living area.

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Please ask about our furniture, and apartment service packages.

 

Directions from JR Tozai line Kita-Shinchi Station


JR Tozai line – Kita-shinchi Station – West Exit

Once you come through the ticket gates, turn left

JR北新地駅①

Keep walking until you see the sign for Exit #9

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Take exit #9

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Once outside, turn to the left and walk straight..

桜橋~①

Keep walking, past the Media Cafe…

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Past the Docomo shop…

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Past the traffic signal, there is a Lawson convenience store on the left.

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You made it! Our office is in the Copper colored building next to the Lawson. There is a cycling-wear shop on the first floor. We are on the 7th floor.

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