Transcript
Speaker: Welcome to the Buying a House in Japan podcast. My name's Take. And I'm Joey. And we're two friends who just quit our corporate jobs and bought a cheap house in rural Japan. The goal of this podcast is to document the highs and lows of the process while informing you of every step you need to take in order for you to do it yourself too. We're by no means experts and we're doing this for the first time, but we hope this gives you a realistic expectation if you embark on this journey yourself and we hope you enjoy the show.
Speaker: Hey all, we got another Dear Diary series episode for you today. In these Dear Diary series episodes, we talk through our raw thoughts on what's happening with us. So expect the content to be a little bit less structured and more conversational. In today's episode, we actually cover our business insider feature reactions, talk a little about Akimart yield, a new product we've kind of uncovered. We found that we can find cheap condos with high yields in Japan. And lastly, we give an update on our house renovation and company creation progress. Hope you enjoy the show.
Speaker: And we're back. Happy middle of January, Joey. Happy middle of January. What's coming up next month, Valentine's day. Yep. Company offsite. Excited for that. Lots happened. I think what an amazing two past couple of weeks it has been since our last podcast.
Speaker: Some big things happened. Biggest is the business insider article. A funny story. Joey and I were, I wake up like super early. I was like 5am California time and I was texting Joey and we're like, Jerry's whoa. We all of a sudden got a ton of visitors. We have a ton of stuff happening and we were both looking at Google analytics, just like looking at the number of visitors. We're like, what is happening? Up until then I feel like numbers, it was like maybe nine current users around 10 every time I checked in, woke up
Speaker: Monday morning last week and it was like 90 years and it was climbing quickly It was like 90 then it was like 95 then it was like 115 kind of thing
Speaker: I was like, I watched a lot of Mr. Robot. I was like, yo, is this a, is this what a DDoS attack is? Are we getting attacked right now? I did think it was, I checked the server logs. I thought I did think it was a DDoS attack and I'm like looking for, looking through the logs, seeing if it's like Google bot or like some kind of bot or one. And we like chat GPT, how do you identify if you're getting DDoS, try to look for patterns in the server data. So I'm like looking for patterns. But then we had to remember it. I was like, oh, we interviewed with business insider a couple of days ago, this guy named Jordan, really cool dude.
Speaker: He didn't let us know the article was published though. So I Googled it. I was like, oh shit, our article was published, Joey. And that's where our traffic was coming from.
Speaker: Yeah, so it was legit traffic from Business Insider. So good problem to have, stressed our database a little bit. I mean, I had some like scheduled tasks running on Akiya Mart. So in the, we eventually, it was something like we were getting like 350, 400, maybe max concurrent users on the site. So I think taking a little bit of stress off the database by stopping all long running tasks helped out a little bit. But other than that, it was like a good stress test for the website.
Speaker: I didn't see much drain other places. I think it did get laggy a few times. And I think that's because of the strain on the database. So good to know where the bottlenecks are for more traffic. Congratulations, Joey. Our site has survived. I think we hit 300 ,000 views in the past couple of weeks, right? Yeah. And we didn't crash during that time. I think I did some schedule maintenance. I tried to prioritize that for like early in the morning, but yeah, we didn't crash during that time. Congrats.
Speaker: We put some Google ads on our website and like Google flagged us as this is suspicious app activity and it throttled us. That sucks. That was like the best time to get ads when we were getting that many views. Yeah.
Speaker: And maybe we should rethink that. I don't know if ads are the best look and I don't, I doubt we're going to make any significant cash from it, but maybe we, yeah, something to discuss. Let us know if you guys like the ads, hate the ads, no one, no one loves ads. I know that, but are they, are they the distraction? Let us know if anyone finds them, but it's a distraction.
Speaker: Yeah, good, good, good call out. But anyways, this is a deer diary series. We're going to shoot the shit a little bit, talk about what's been happening this week. Again, business insiders, huge one. We got 300 ,000 views. We have a consult button on each one of the AccuMart listings. And we got booked out. Like Joey's been going through the recruiter life is what I'm saying. We have back to back consults like almost every single day. I think we're booked out till February. So thank you all for your support. And I'm sorry, Joey, it's going to be a recruiter training for your time.
Speaker: Yeah, definitely back meetings every 30 minutes with 15 minute break in between kind of thing. It's rough. Hey, but we've been meeting super cool people. I think we've been meeting people from every country, every background. It's so cool to see that there's so much hype around this Japanese real estate kind of phenomenon right now.
Speaker: a worthwhile endeavor too from like an entrepreneurial standpoint. It's good to speak to customers and see what they think. Yeah. And we've been getting some hard questions on ourselves on product feature, but also what are we doing? And I think throughout these, each one of these conversations has guided us a little bit more in the right direction. I'm reading the lean startup right now and it's all about experiments and pivots. And I think each one of these touch points with these new people, it helps us get closer to the right direction.
Speaker: Speaking of that, Joey, I know we are cooking up something exciting with a yield type product on Akiyamart right now. It's strictly only single family homes or detached houses. We had some questions around, what about condos? What about apartments? Joey, you want to talk a little bit about the yield side?
Speaker: Yeah, so again, this is coming from something I noticed at the JRIP conference I went to in November that Ziv and Emil Gorges and Tracy Northcott and Anton put together. Most of the people there were investors. They were looking into investment properties in Japan. So it's been in the back of my mind.
Speaker: for a while like maybe this is where the addressable market is at, maybe most people, maybe actually people looking at Akiyas from a vacation home perspective, maybe we're in the minority, that's what me and Take were looking for, but potentially we're in the minority, so would be good to have some way to surface investment opportunities in Japan too, because housing is affordable in Japan and some people might be looking at it from an investment perspective, so
Speaker: As we mentioned before, when we talked about the ads, we're hoping to get feedback, are they distracting? We're trying to move and introduce some sort of yield product as well, where we can showcase for now condos and potential returns that you can get from renting out those condos to a long -term
Speaker: Japanese tenants and yeah, we're trying to figure out the best way to move that forward. So we have two ideas. One would be a newsletter where you get a certain number of properties in your email each week or biweekly. However, often we want to send it out. Is that the best way people want to ingest this content? Should we build it into Akiemara itself where there's a new tab or something like that to browse yield properties on the map? So we're looking for feedback there too. If anybody has any feedback for us.
Speaker: Yeah, as we go through more of these condo listings, there's like a lot of crazy good deals. I think one of the big hurdles for foreign investors in Japan is if you buy a house, like who's going to maintain it, who's going to property management manage it. With condos, that kind of is solved where a lot of these condos you just pay
Speaker: the listing agent and they will do the property management for a fee. There's an HOA fee, you don't need to worry about gardening or things like that. Condos seem to be a more hands -off investment, which I might actually recommend more so to people who are doing their first property in Japan now.
Speaker: I think there's some incredible deals. Me and Taki, we're just looking at some properties in Izu, Kanagawa, that sort of coastline, just 30 minutes ago. And even condo wise, there's some really good deals. Onsen water. We're looking at some great ones in Sapporo, Fukuoka. And another thing, which I think actually is probably the best selling point we forgot to mention is that there's great yield numbers. We're looking at things 14, 15 % is
Speaker: not a crazy number in Japan. I've even seen things as high as 25%. Although when it gets that high, you do question, is this too good to be true? But I would say around the 15 % yield mark is maybe what you're going to expect here.
Speaker: And Jerry, is this gross yield or net yield? That's net yield. So that's after we subtract whatever these real estate listings publish as expected costs per month. So that includes maintenance fees for the building and management fees for the building. So we subtract those from expected returns for the year and we're still seeing 15%.
Speaker: Yeah, we saw these numbers and we see what we get, for example, in our 401k or any of our other investments are like, Oh, is this too good to be true? So one of our goals, I think this year, Joey, correct me if I'm wrong, but we want to try to get a condo and see what it actually is. So hopefully we can be that guinea pig and make a proof of concept before telling and explaining our journey. But that's something we do have on the roadmap, investing in a condo with a high yield to see if those returns are actually legit.
Speaker: Yeah. And those returns, again, those returns are for a long -term tenant. If you were to do something like midterm stays where you rent out your unit for, it has to be a stay of longer than 30 days to not run into conflict with the mean PACU laws, the Airbnb laws, short -term rental laws. But if you go that route, I'm sure you could get higher than what you would get with a long -term tenant. So if 20 % yields, probably not crazy.
Speaker: Yeah, another idea we're also exploring is the midterm rental. So doing month -to -month rentals specifically for digital nomads. I think there is a market for this. Joey and I went out in Fukuoka one night and went out and partied and we met all these people who were part of some like digital nomad kind of couple months stay in Fukuoka and they were staying in these apartments and we're like, oh, there is an appetite for that, Joey.
Speaker: Yeah, at least in Fukuoka, there's, I feel like there's even, there was like a digital nomad group or organization or something that helps people specifically in Fukuoka. I believe it was like both land jobs, fine apartments, that type of thing. So definitely an appetite in Fukuoka. I'm sure there's other similar ones in Tokyo, et cetera.
Speaker: And for these month -to -month rentals, you don't need to go through the Airbnb Minpaku process. So that is one benefit. I think it would be a little bit more intensive on the property management kind of side. You might need to pay some fees there. But it is, I think, from my understanding, Joey, we could buy an apartment, renovate it, and do month -to -month. The challenging part would be finding the tenants, which I think we could maybe use AccuMart to channel or use this podcast to channel to find people to stay.
Speaker: Yep, exactly. It's definitely the way to start renting out an apartment or house in Japan with the least amount of bureaucratic hoops to jump through. The downside is that you can't leverage a platform like Airbnb to find those tenants. Yeah. Let's see, exciting development. I don't think this was ever on our radar until we started doing this stuff. So it's really amazing to see how things have been.
Speaker: I don't know, Joey, I think there's been like 10 times this week I've been like, whoa, things are snowballing. Things are connecting in a weird way. Each one of our conversations have been like one after another connecting the dots in the sort.
Speaker: Definitely feels like things are coming together and another weird thing. So we've been, yeah, reaching exploring these yield property type things. And I feel like a few times, I'm here in Nova Scotia, Canada right now. For some reason, I feel like there's a lot of people involved in Japanese real estate that are either from Nova Scotia, currently in Nova Scotia. It's got a little bit of a small world there. All right. We're doing a Nova Scotia, Japan real estate meetup at some point.
Speaker: Stay tuned. It seems like there's a high concentration. I'll fly out and stay with you, Jerry. I know I've been meaning to go out there. Yep. Cool. Let's give a quick update on our house. So we talked to our Fumi, the fixer. It seems like unfortunately our contractor, there's something kind of a family incident. I think his mom got hurt and he's.
Speaker: He has to pause, I think on the construction of our house. We got some videos. It looks the same as it was like a couple of weeks ago. So we originally thought our house would be done at the end of March or mid March, but it's my bet's April now, Joey. What's your guess?
Speaker: Yeah, I didn't see any updates other than it looked like the floor, the subfloor in the main living room where we have the Horikotatsu, the sunken table. Looked like the subfloor had been finished, at least on the plywood nail down. But yeah, other than that, I didn't see much movement. When's it going to be finished?
Speaker: Yeah. End of April. Yep. Let's fingers crossed for end of April. So just backs backpedaling a little bit. We were pretty optimistic initially with our, I think the contractor first set ended January and we're like, what? It's really fast. So similarly to, I think anywhere you have a contractor, I would add on a couple of months at the timeframe. I think that's just what it is with renovating places.
Speaker: I do feel like, okay, yeah, adding on a couple months seems, yeah, like good advice. We're also curious, is he going to come back near the end and say, Hey, I need, I need more money to finish the job, which also I've never hired a contractor in North America. It has, but that does appear to be routine. Although he gave us a very specific itemized contract that we, I don't know how many times I had to sign an initial, this thing on every single page.
Speaker: So it definitely feels like potentially in Japan, they go through all this sort of bureaucratic contract thing. Maybe it's hard for him to do something like that because he signed this contract with us type of things. If I had to guess, I feel like maybe contractors in Japan, yeah, they do stretch it out time -wise, but I do feel it's unlikely he's going to try to hit us up for more money.
Speaker: Yeah, this is my first experience with Japanese contractors. My guess is probably less sneaky. I feel like a lot of times in the US contractors will be like, Hey, actually put in more work. It's actually going to cost us much more.
Speaker: I would guess culturally that won't happen, but to be fair, we did add on kind of a couple things. He might itemize those. That's true. That's very true. After the contract was signed, we're good friends with him too. So just chatting and we're like, Oh, could we actually, now that we think of it, could we do this? So one was the installation and two is exposing beams in the ceiling. Maybe he'll come back with those also itemize. Yeah. Fair enough.
Speaker: I think the real solution here is we got to just go out for drinks with him. I feel bad last time when we were going to go out for drinks, but let's get some beers, see how he's feeling next time we're in Japan. Yep. Yeah, I like him. He's a nice guy. Yeah. So it sounds like April, I'm going to Indonesia for a surf trip in early April. So probably end of April, Joey, if anyone's listening, we'd love to meet anyone in Tokyo or Kyushu. We're going to be hopefully scoping some properties, but April Hanami time, Joey, good time to return.
Speaker: A I have allergies. Cuffins show. Very bad. When I was studying abroad, when I went to college in Tokyo, I remember horrendous. And that's when I learned of the Japanese eye drops with menthol or whatever. I don't know what compounds in them. Yeah. They burn so good. Probably the not good for your eye health at all.
Speaker: But that was the only thing that saved me. So when I think of springtime in Japan, I have all these memories of really bad eye, itchy eyes, and these menthol drops. And I still keep those menthol drops with me because sometimes I get allergies in other places around the world and really, they've been a lifesaver. I don't know what they're doing to my eyes. I try not to use them when I need them. Didn't you mention something after World War II, they planned all these trees? What's the reason for that? They found out.
Speaker: Yeah, it was, I don't know the exact reasoning, but they, some sort of forestry initiative in Japan after World War II, and they planted a cedar everywhere. I think it was for, to support the lumber industry, Japanese homes are built with wood. So they wanted to plant like a tree that grows fast and very straight. And I believe cedar has those properties. What they didn't realize it was overlooked or not surfaced enough.
Speaker: was that it's like something like 90 % of the population has an allergy to cedar pollen. And they planted these cedar trees everywhere in the country. So a lot of, yeah, it's just, and now it's, yeah, Kaffoon Show, it's well known in Japan. Just that time of year, the cedar pollen flies everywhere.
Speaker: All right, buddy, load up those eyedrops because we're going back for springtime. I bought some when I was every time I'm in Japan, I buy eyedrops. And in the 12 years that I was not back in Japan recently, anytime I knew a friend would go on a trip there, I asked them to buy eyedrops for me, bring them back. Okay. Hopefully allergies have gotten better. I don't think that ever happens with age, but that was going to be sick in springtime. And that's going to be so nice hot springs and.
Speaker: cherry blossoms and cool but warm weather. I'm excited. Yeah, I think so too. It'll be very nice. Yeah. Switching gears a little bit. Wanted to also mention that we are starting to get our shit together with regards to entity formation. This is something we were kicking down the, kicking the can down the road, I'd say. We were like, ah, we do need to create some kind of entity. Again, our intent with our Akiya spot, our bamboo spot is to hopefully
Speaker: Rent it out, whether it be medium term or Airbnb. Yeah, we're going to figure that out. This is a proof of concept for us. But either way, if you're getting income in Japan, to my understanding, it is highly advised that you create some kind of entity so you can pay taxes.
Speaker: In our situation where we were debating between a KK and a GK, those are the two kind of like equivalents of LLC or two corporate structures here in Japan. The idea is to create one of these entities to not only get a bank account, which is also a big reason why we're making this a company, but also to get revenue from the Airbnb or from the house to that company. So Joy, we met some, an expert in the KK versus GK went over my head, but what are your,
Speaker: What were your takeaways from the conversation with Rob? That there's not too much of a difference between creating a KK versus a GK. The KK is the equivalent of a corporation in America, C Corp. And the GK is the same as an LLC. So actually that was nice. That's parallel with how it works in the United States. And also the other thing that he was, yeah, which one do you guys want to make? And it didn't seem like that.
Speaker: The requirements were that different. I feel like there were some thing, he was like, Oh, you need to submit. If you do KK, which is the C Corp, you need to submit a document to the Japanese equivalent of the IRS, like once a year or something like that. But, but he was like, we handle that for you kind of thing. So it didn't, yeah. The main takeaway was like, both of them are easy to do. It doesn't matter which one you pick. Yep.
Speaker: We should definitely have Rob from She -Max Legal on this podcast just to see that he gave such a good bilingual in English. He gave such a good description of what I was dreading of learning about. And I think he simplified it quite a bit. So it's good to, I think it's going to be good to have him on this pod.
Speaker: Yeah, especially that the services are in English. And for anyone else out there thinking of the Airbnb ability, thinking of trying to go for an Airbnb in Japan, this is probably your way to get a bank account. This is another reason why we're doing this too. This is how you get a bank account in Japan without being a permanent resident or on a work visa or anything like this. You start a company, you get a Japanese national as your, you appointed Japanese national as a director of your company.
Speaker: And then that director goes to the Japanese bank and tries to open a bank account for you. Seems to be the way to do it. It's not hard at all for a foreigner without any type of residency in Japan to open a company. The real challenge is getting the bank account open. And that's why you have to jump through these hoops here. And yeah, it seems like Rob doesn't do the banking stuff, but he explained it very well to us.
Speaker: Yeah. And we actually had a follow -up conversation with an accountant and we're posing the question KK versus GK. He advised us to go for the KK, which is a little bit more of an old school structure. But he did mention that from a Japanese societal perception, the KK is like a more legit corporation type company. And when applying for bank, that's a big, it has, the GK has a little bit of a stigma as like,
Speaker: I forgot, he gave kind of a historical context, but it was like not as highly seen as the KK. And even though they are similar function, he said when applying for a bank, this could give us a slight edge. And he also mentioned if we ever do want to get outside investors and things like that. So we were convinced on the KK, even though it costs a little bit more to do and also is a little bit more rigid in structure, I think. Again, do your own research. One funny thing, too, he also mentioned is
Speaker: We want to seem as Japanese as we can when applying to a bank account. So the KK is going to help, but also it helps honestly that my name is Japanese Trojan Horse Joey. They're not going to know. I think they'll know I'm foreigner, but I think their guards will be let down a little bit with my Japanese name. We were discussing KK names and it's funny, Joey, what do we land on?
Speaker: Yeah, again, for perception reasons, a Japanese sounding name is going to be the best. It's all about perception. It seems like when you're trying to open this bank account. So Takamori, Takamori high trees is the name that was written on the house that we bought in Bepu. That was the last name of the previous owner, Takamori. So we're just going to go with Takamori Kabushikigaysha, which means K. So Takamori K is going to be the name.
Speaker: It was funny when we were trying to get our Amazon packages, Joey would change his last name to Takamori just because that's what it was like written on her house to try to get it. It worked. Yeah. Joseph Takamori is how we'd introduce him to the neighborhood sometime delivery man. Hey, yes, I'm Joseph Takamori. So that's going to be our company, Takamori KK.
Speaker: What's even funnier, Joey, is when I searched up Takamoni just to go online, I found this one image. So Joey and I, in Bepu, we like love this one Tonkatsu spot, which is a deep fried pork cutlet. It was about like a 10 minute walk from us. I'd say it's called Tonkatsu Yamamoto Loin. It's the best, my favorite restaurant in Bepu. We'd walk down like every day.
Speaker: Pay about 10 bucks for a bomb pork cutlet, but in this shop, it's like such a minimal shop It's got gray walls and it's got one painting the painting is this like one painting of this General and we always like what who is this guy? And then we eventually after we'd started making a relationship with the old lady who works there We're like, hey, who's that painting up?
Speaker: and she had mentioned this name, I didn't remember it at all. When we started thinking about company names, I Googled Takamori and the first Google image search was that exact image. It is, what's his name? Saigo. Saigo Takamori, who is supposed to be like,
Speaker: Let's see. Saigo Takamori is one of Japan's last samurai and nobleman. That's what I said. He was one of the most influential. Yeah. He was one of the great nobles who led the Meiji restoration. Was that the Tom Cruise character?
Speaker: I could, it could be, I don't know, but I like the story and I think it all weirdly connected that it's crazy that our name Takamoto from our house is that same image that came up. I would not have been able to remember what that lady said that guy's name was nor find that image. But here we are. I, we got to use that as our, our mascot.
Speaker: I'm on the Wikipedia right now. This is very Joe Rogan. Pull up The Last Samurai. Pull it up, Jamie. The film's plot was inspired by the 1877 Satsuma Rebellion led by Saigo Takamori. Hey, Tom Cruise, The Last Samurai.
Speaker: Maybe we got to rewatch that movie. I don't even remember any of it. Going on the Japanese perception kind of thing. I say when we do get interviewed by the bank, they're like, why'd you name it? Takamori would be like, we love Saigo Takamori. He was, he's our hero. I think that's going to gain us brownie points with the bank auditor or whatever. But the characters are, the Kanji is different. We're using different Kanji. He said Saigo Takamori has different Kanji. No, don't. Maybe let's, let's, we can talk about that, but. Okay.
Speaker: I think it's still a good story. And one last point actually before I forget is the person we met after we met an accountant, we were originally going to incorporate our KK down in Beppu, but he gave us advice of maybe considering Tokyo if we were doing maybe more than one property. And I think our intent now, Joey has transformed into maybe we're looking at more properties across Japan. He highly recommended Tokyo.
Speaker: to get the bank. He said, that's just where it's at. So if you are looking to buy multiple properties in Japan and Airbnb and not just be located in one spot, it is advisable maybe to look at getting a address service in Tokyo. We're going to also talk to that accountant again. Maybe we'll bring him on this podcast too, to talk a little bit about his experience or why that reason, but it seemed pretty straightforward that we should probably go with a Tokyo business address. Yeah. Okay, Joey. Whoa. What a crazy couple of weeks as we
Speaker: let off earlier, we're going to have an offsite company offsite. We're a legit company, Joey. We're legit. We are having an offsite. That's right. Mentioned at the start. First week. Yeah. If any, anyone here is in the Bay area, California or Santa Cruz and wants to talk Japanese real estate. I think Joey, I'm going to volunteer a day of our offsite to grab some beers, come on down to Santa Cruz, come surf, come grab a beer at humble sea. We'll organize something.
Speaker: And I would love to see anyone if there is actually anyone listening in Santa Cruz. Or Nova Scotia too seems to be a pretty popular area for Japanese real estate enthusiasts. Bring the Tim Horton cups, bring the roof sweatpants. It seems like I've been inundated with only Canadian people recently, which is good. Everyone's so nice. So. All right. Any last words, Joey?
Speaker: Um, let's see. Yeah. Pretty good. First month, I would say first month of entrepreneurship, pretty, pretty packed. I would say working harder than I was working at my last job for sure. Longer, longer days. Feels like a real job at this point. It does feel like a real job. And again, it's good though. It feels different working for yourself than when you're working for a company. Got to get lean startup, Joey. Been reading it, getting some good advice. I think.
Speaker: We've been making so many new mentors and learning so much from people. And it's, I think very slowly, but gradually, Joey, we're actually really starting to understand the hoops and processes of Japanese real estate. Yep. Okay. Cool, man. I'm excited to see you next week or two weeks from now for our offsite. And let's see how this next couple of weeks go. I think we've got a lot of momentum and things are snowballing.
Speaker: All right, let's go. See you next week. All right. Boom.
