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. How are you doing, Joey?
Speaker: I'm doing good. Take great offsite, great offsite for those who haven't keeping along. We had our Santa Cruz offsite. Joey flew out from snowy Nova Scotia. I think your flight was delayed like three or four times. It felt like, yeah, like three days on the way out. Just, we got a lot of snow here in Nova Scotia. And then we got a lot of snow on the way back. I was amazed that the flight wasn't canceled on the way back, but I was expecting it to be canceled. But.
Speaker: No, I made it back, spent the seven days attacking the Santa Cruz. California is very comfortable is what I, what I learned. I feel like I've been in the summer, been there in the winter. Pretty, pretty nice all year round. Pretty, pretty sunny. We get into rain now, but it just went surfing. Hopefully glad you came out to surf at least once you got that California bike to surf experience. Yeah.
Speaker: All right, today we are going to jump straight into it. We're going to cover our top five frequently asked questions over the past month since we've launched Acuya Mart. We've done close to what feels like actually, actually we had 80 bookings for consultations. Not everyone showed up, but needless to say we talked to a lot of people this past month. It felt like everyone had the same few questions, but overall I think we're slowing down these consults at this point and kind of going heads down building on some of the feedback.
Speaker: Yeah, it was great to speak with everybody. It did take up a lot of our time. So we are going to slow those down and prioritize more motivated buyers. But yeah, we're trying to record some of the top five questions we got from everybody. We can, you know, you can listen in here instead of booking a consultation with us.
Speaker: Yeah, we'll probably send you this podcast instead of booking a consult and feel free to email us with questions that we don't cover, but these seem to cover, I feel like most of the consults, I think all these questions were asked. So it felt like we were kind of just spinning, spinning the wheel over and over again and doing the same thing. So figured we'd put it all down in a podcast form. Let's jump into it. Okay. All right. Top question. Yeah. Typically they'll go with, okay, Joey, who are you guys?
Speaker: Yeah, actually you take this Taki, you're the one I usually use. I usually start out by saying, Hey, my name's Taki, this is Joey. We're the co -founders of AccuMart, the site you hopefully found us at. We built this tool to find our own cheap abandoned Japanese house. We bought a house down in Bepu Kyushu near some sweet hot Springs back in October. Our house is currently being renovated. So we're.
Speaker: You know, we're not professionals by any means. And I like to always give a disclaimer that we are not Japanese real estate agents. We're doing this again for our first time and you know, do your due diligence and do your own research, but we are researching this stuff. I think every day and learning a lot along the way. And then I always chime in immediately after that.
Speaker: Yeah, we've looked at a lot of Japanese property listings. We've talked to a lot of people in the space. So we've made a lot of contacts and connections. So depending on exactly what you're looking for, we can point you in the right direction. We know some people that can help you buy. We know some Japanese real estate agents. We know people that help with mortgages. So we can point you in the right direction.
Speaker: Totally. And I guess to be clear, our intent right now is we bought this house down in Beppu Oita kind of as a vacation home, but we're also looking at using it as an Airbnb. So we're in the process of getting legit, making a bank account, making a company. And it seems to be a lot harder than we initially thought, but you know, we'll talk about that a little bit later too.
Speaker: Yep. All right. Question number one. Why are these houses so cheap? Is this a scam and do I own the land? It's kind of cheating. It's three questions in one, but Joey, why are these so cheap? Is this a scam and do I own the land?
Speaker: All right. First off, totally not a scam. We bought a house for $40 ,000, which is a pretty crazy price, not a scam. The houses are so cheap because of changing demographics in Japan, aging society combined with, uh, young people want to live in Tokyo or other big cities. And on top of that, just the rural sort of life is not appealing to young Japanese people. So these homes that they've inherited in the countryside, they're just.
Speaker: Kind of letting them fall apart there. One of the other factors is that it's, Japan doesn't really have a big DIY renovation culture. A lot of Japanese would rather tear down a house, build one completely brand new. People sort of assess these properties differently and just older homes, 1960s, 1970s, they're no one wants to buy them. Yeah. Do you have anything to add? Yeah. These again are not scams. These are cheap, but also don't let that completely fool you. There's a lot of like free houses and.
Speaker: You know, even though we spent 40 K on our house, it did need a lot of improvements and it's still, you know, it's still an ongoing project. So just know that they are cheap, but they also not like perfect. If you're expecting to buy something for 40 K that's in perfect condition, it's going to be really dang hard.
Speaker: Yeah. And we'll talk about when we get into the costs as well, how, you know, what, what you can expect if you do buy one of these $5 ,000 homes, $10 ,000 homes, et cetera. One thing I do want to add is that the, the free homes, when people do talk about free homes in Japan, that's more of like the accounting for evaluation of the home.
Speaker: homes in Japan devaluate down to zero yen after 21 years, if it's a wooden structure. So that's usually when people talk about the zero yen houses, it's the accounting, it's the assessed value of the house, but the market prices is always going to be a little bit different because you factor in the cost of the land as well. But there are properties, you know, on Akiyamart, we see them all the time, you know, there's $2 ,000 properties, $3 ,000 properties, et cetera. So they are out there, they're not a scam.
Speaker: Uh, be suspicious of the cheapness though. That's what we learned with our $40 ,000 property is, you know, it's not a perfectly livable house. Yeah. So the house itself, again, to Joey's point, it's going to be tax deductible or sorry, tax, tax valued at zero. It's really the land where the value is. We'll talk about that actually in the next one, but yes, you do own the land. These houses are cheap because whatever Joey mentioned, depreciating popular,
Speaker: D changing population, changing demographics. And it's no, it's not a scam. We legit have keys to our house. And I think our house is pretty awesome. All right. Number two, true costs. So what are the hidden costs? Is, is, is the price that I see what I'm going to pay, what else, you know, talk about closing costs, taxes, insurance, renovation.
Speaker: This took us a little while to really let the dust settle, but we do have clear pictures on our numbers as far as costs.
Speaker: First off, whatever you see as listing price is actually the true cost. There is also a little bit of room for negotiation. I think we negotiate about 10 to 15%. This isn't super uncommon, but it's not as common as you'd see in like California or US. And those low ball offers don't work as well here and are actually kind of insulting to some of the real estate agents out here. So please be mindful of that. But yeah, the true costs are actually what you see on AccuMart as the listed price note.
Speaker: There is a yen to dollar conversion. So the yen is at an all time low right now so it's actually the most advantageous time to buy, but true cost of our house, we think it was listed for 42k we pay 42k. Some of the extra costs though are on the acquisition.
Speaker: We like to ballpark and estimate. I think the number is anywhere from 10 to 12 % for the acquisition cost. For us, this included NTI, we've had them on the podcast, their service fee. In addition, there are taxes and kind of document signing and kind of whole list of things, but roughly to keep it simple, about 10 to 12 % for acquisition costs. Joy, did I miss anything there?
Speaker: Yeah, no, correct. I say $5 ,000 as well. Our house was $40 ,000, $5 ,000, you know, a little over 10%. Yeah. What that included, we used NTI, Nippon Tradings International to facilitate the purchase for us. So we paid their fee. We paid the commission to the real estate agent. We also paid property taxes back to the seller who had, who had already paid property taxes for the year.
Speaker: Yeah. Was that all the clothes? I think that was all the closing costs. Oh, and yeah, as talking mentioned, like kind of judicial stamp type things, filing paperwork with the government that those were some fixed costs, but that all goes into that 10 % number for us. It was 5 ,000 bucks. Yeah.
Speaker: Moving on to now ongoing costs. So things like property tax in Japan, depending on what, but more or less property tax about 1 .4 % of assessed value. As we mentioned before, because our house has, I think is valued, our structure is valued at zero because it's, I think it was built in 1977. So it's almost 50 years old. There's no value in the house, but the land value, which we pulled up is about 30 % of what the purchase cost was, right, Joe? Do you have that?
Speaker: Yeah. 30%. Yeah. So I looked at the amount that we paid property tax per month and then kind of reverse engineer what our valuation of our property was. And it was valued at 30 % of the purchase price. And so that's, that's, I guess the, the valuation of the land. What's that? I can't do the math in my head. 30 % of 40, 40 K.
Speaker: Yeah. So that's our, I guess, ongoing property tax costs. In addition to that, we pay utilities. I think there's a minimum to keep them on. I think it's like some 10 to $30 just to like at minimum keep them on other things else. What other things? Insurance. Insurance. Yeah. We have fire insurance. So fire insurance is about two to $300 for every two years.
Speaker: Again, some of these numbers differ, but just to give you ballpark numbers, property tax, 1 .4 % of value, utilities, I would budget 50 bucks if you're planning just to keep a model. And again, $200 to $300 for fire insurance, which is quite cheap compared to other places in the world.
Speaker: Correct. What about renovation renovation? So again, we bought our house 42 K we're planning on putting about 40 K in I'd say, honestly, after furnishing and getting everything buttoned up, that's what we budgeted. We could be way off. We've heard estimates that were way over. And we've heard people say that we could do it DIY cheaper, but you know, that's what we're scoping right now.
Speaker: Our house is about 30 to 40 % complete. Unfortunately, our contractor just got hurt. So timetable's a little further out, but yeah, we are budgeting, let's say 40 K for the renovation or a hundred percent of the purchase price for the renovation and furnishing. Yeah. So just to sort of repeat those ballpark numbers, the house was 40 K roughly, uh, closing costs was about 10 to 12 % of that and renovation costs, including the furnishing was about a hundred percent of that.
Speaker: Yep. So all in, I'd say we're after renovation, we're looking at 85 K and then with ongoing costs rounding that up to 90 K for this whole project, I'd say is what we're budgeting. But again, this is could, could go higher, hopefully it goes lower, but that's what we're thinking about now. All right, Jerry, FAQ number three, can I own as a foreigner or does this get me a path to a visa?
Speaker: Yes. You can totally own as a foreigner. We did it. Me and Taki purchased as an American. I purchased as a Canadian. So yeah, you can totally own as a foreigner. You have the same rights as a Japanese national and yeah, you pay this. There's no difference in the property taxes you pay or insurance or anything like that because you are a foreigner. Yes. You can totally buy. There's obviously logistical problems purchasing as a foreigner, especially if you're not living in Japan. And that's why we.
Speaker: went through a service like NTI to help purchase for us. But yeah, totally. There are no issues being a foreigner purchasing a property in Japan.
Speaker: But that being said, no, it does not directly get you a visa. So what me and Taki are doing right now is we're just using up our tourist visa. So you can get 90 days in Japan as a tourist and you can do that twice a year. Although there's a lot of different discussion online of exactly what that means doing 90 days, twice a year. Some people say it's, it's actually unlimited, but if you stay longer than 180 days, then you need to pay income tax in Japan.
Speaker: And you know, it kind of gets a little bit complicated. Keep it simple. I would say keep it simple six months. We're probably not even going to use that full six months, but yeah. So we are, personally, we are just entering back into the country as tourists. I spent two months there in the fall and may do that again this year.
Speaker: There are options to get a visa though. So one, it's been in the news, the digital nomad visa. I haven't looked too closely into that, but I think if you're making a, if you can prove income of, I think you're making more than 65 K you gotta, you can get a six month visa.
Speaker: Yeah, 65, make more than 65K, you can get a six month visa. I haven't looked into that at all. I haven't looked into the process, but it's out there. It's new and yeah, worth looking into. The other options that I've looked at are a startup visa. So startup visa is closely related to the business manager visa. Basically you start a company in Japan. You do not need to prove income or profitability.
Speaker: at all, you do need to show, you know, that you've done all the proper paperwork and you, but you can have, you can have a failing business. I, you know, it does come down to, I would expect some, you know, someone in the Japanese government office has to make an assessment of your business at a certain time. So probably better if you're making money and you're profitable, but it's not like written in any of the rules anywhere. What I've heard people doing are like Airbnb type guest house type businesses. There's someone I spoke to that's just the honeybee farming.
Speaker: As the, as their business, the start of visa is for six months and then you need to check in again. And I think you get a subsequent, another six months. So you can do that twice. And after those two startup visas, then you need to apply for the business manager visa, which is very similar. I think the first time you get the business manager visa, it's two years. And then after that you can apply for the five year business manager visa.
Speaker: Again, you need to have a business in Japan and yeah, just show that you're done sort of you're doing everything appropriately is what it seems to be the biggest hurdle in terms of like filing the proper paperwork for your business.
Speaker: Yeah. If you're coming to Japan to buy a place and then start a business here, I think it's a pretty easy bear country, especially compared to the United States. Joey's been talking about immigration stuff in the US and it seems like Japan is quite favorable. If you're legitimately coming to Japan, let's say buying a place to make it a coffee shop or do some kind of store or some kind of business and you're legit, I think you'll most likely find a path to get a visa if that's something you're interested in.
Speaker: Yeah, be aware that for things like the business manager visa, there are costs associated with it. So one, you need to have a property, you need to have an address. So if you're purchasing property in Japan, well, you haven't, you know, you think that, okay, you may have an address. The address has to be separate from your, your primary residence. So although this does kind of seem gray zone, I don't believe it.
Speaker: It might not have to be a separate mailing address. It could be the same mailing address, but it needs to be a separate physical structure from your primary residence. So if you buy a home with two buildings on it, that could be like a storehouse and then the home, that could work.
Speaker: Yeah, we'll have Robert from She -Max Legal. We're talking to someone who's kind of an expert on this. We'll have him on as a next podcast guest, and we can go really deep in the visa. But the high level is, yes, you can get a visa, not by purchasing, but there are alternatives that I think are pretty viable compared to other countries in getting visas. Yeah. High level, the house purchase can help you, but it's not directly going to get you a visa. Got it. All right. Next question, Jerry. I think I'm up. Hit me with it.
Speaker: All right. Can I Airbnb this property? So if you're looking for a property purchase, we get this question a lot. Can I Airbnb it?
Speaker: If you are looking at a house, yes, you can potentially Airbnb it. There are basically two different types of Airbnb licenses you can look at based off zoning. But the short answer is yes, you should be able to Airbnb if it is a house. If you're looking at a condo, most likely no, there's the high level. There are very, very few condo buildings that allow for individual units to be rented out.
Speaker: The house route, which is where we're going for is possible. So the two licenses are one, one called Minpaku, which is short -term rental or specifically for Airbnb. And the other one is Yotan license or hotel license.
Speaker: The first one, Minpaku, allows you to Airbnb for 180 days a year, which is not great, but also not the worst. If you're planning to use it as a vacation home, this might be the route. The second one, the Ryokan, or the hotel license, allows you for 365 days a year. So this is what we'd ideally try to go for.
Speaker: due to specific zoning. And each city is going to be a little bit different. So you're going to have to contact the city office and see where the zonings are. Unfortunately, our house in Bapu is in the residential zone. So we cannot get the Ryokan or hotel license. So we can only rent 180 days a year, but that's fine. Our next one, we're definitely looking for something in the commercial zone, which is something we can do hotels or 365 days a year. So yes, you can Airbnb the property through those two different routes.
Speaker: But the true thing that isn't said is it's pretty difficult. There's pretty stringent regulations around it. I'll let Joey color that in, but high level, we needed to hire and we are hiring someone who speaks Japanese on the ground to navigate that for us, because there's things like earthquake proofing, fireproofing. There's certain construction things that need to be done in order to satisfy that. And it seems like it's a decent amount of paperwork. So Jerry, anything to add there?
Speaker: Yeah, so for anyone considering buying a property and Airbnbing it, first thing you got to think about is, you know, how are you going to get paid? You need a Japanese bank account. If you're not already living in Japan, you need to open a Japanese bank account to get paid from your Airbnb property there. And to open a Japanese bank account, you either need
Speaker: Well, work visa of some sort or you need to open a company. So that's what we're doing at the moment. So it, it, it kind of feels a little bit like in software engineering, we say yak shaving to do a, you need to do B to do B, you need to do C. And eventually you're, for some reason you're shaving a yak is, is what software engineers say, but it feels a little bit like that. You know, we're trying to.
Speaker: start Airbnb and you know, now we're building, we're, we're making a company to get a bank account, to get a Japanese cell phone number. So there's a lot that goes into the logistics of actually starting this Airbnb and it's expensive.
Speaker: Yeah, but at the same time, I run a couple of Airbnbs out in Hawaii. It's kind of a, you got to pay to play, you know, there is a bear to entry, but once I think we get it, it will be a lot easier. So it is intimidating right now, looking outward or looking, looking at it. But I think once we're on the inside, it will be a little bit easier. So we'll do more content on this as we go through the process. I think we'll have a lot more insight probably in the coming months on this process specifically. And we can update you all here. Yeah.
Speaker: All right, Joey, everything looks good. This house on Akiemara looks awesome. I, I, those previous questions sound good. What are, what are next steps? Like, how can I buy this? How can I view this? You know, I want to buy this. Yeah. First thing we talk about is when someone comes to us with this is we set expectations on timelines, especially if you're looking at a cheaper house, real estate agents in Japan are not incentivized to work very hard to sell this house. They make a 3 % commission off the house. You know, if you're buying a $10 ,000 house, they're making
Speaker: What is that? 30 bucks off of 300 bucks? I don't know, whatever the math is. Very low amount of money off of the house you're purchasing. So it does feel a little bit like they're dragging their feet and you know, rightly so. They would rather prioritize a different sale. So yeah, set expectations. Our property took us six months for, you know, 40 K property took us six months from when we, you know, first got into contact with someone in Japan to when we had keys in hand.
Speaker: And so what we do is we like to pass people to NTI, especially for these cheaper, more affordable properties. At the moment, NTI is the only entity we know of in Japan that will really facilitate these purchases on behalf of a foreigner. No one, if someone knows of anybody, you know, we're open to increasing our contacts, but at the moment we recommend NTI. That's the service we used.
Speaker: And yeah, they are, you know, we have a, we have a podcast episode and you can check out NTI's podcast as well, where they go over the explanation of services a lot better. But in my own words, they helped us everything throughout the process. We, we purchased remotely. They helped us do some virtual viewings. They helped us negotiate. They helped us schedule a building inspection. They helped close. So all the stamps and everything and documents that needed to be signed from our end, they just, he, NTI sent us some documents. We signed them, sent them back.
Speaker: And, you know, that was, that was all we had to do. So pretty, pretty easy from, from our side. They also helped us set up utilities. When someone says what our next steps, we will pass them off to NTI.
Speaker: Yeah, this isn't for everyone. If you can't speak Japanese or your spouse speaks Japanese and they can call the agent and you guys feel comfortable to do this, I don't think it's necessarily rocket science, but the big limiting factors typically for foreigners are one, we didn't have a bank account. You do need to transfer from a Japanese bank account to purchase the property. So that was a big one. Ziv over at NTI let us use his bank account.
Speaker: And I want to emphasize with Joey, like a lot of these real estate agents aren't motivated to sell these houses. It's weird. They're worried. They're I think concerned to deal with foreigners is one big one. And also they're worried that these houses are so cheap that they're going to be liabilities to have her buys them. Do they know, you know, Joey and I are
Speaker: happy with junk and we feel like we're treasure hunters here. We did emphasize to them that like, hey, we're okay with it as is. We did get a home inspection, but I think that's something to keep in mind that
Speaker: The Japanese side is worried about the liability of you coming back and being like, Hey, you sold me this. It's a piece of junk. So know that what you buy, expect to buy it as is and not to go back to the agent complaining. But NTI was the way to go. Joey calls them the glue. They really were the glue in our process. We highly recommend them. If you.
Speaker: find someone else that we're yeah not too many people again want to deal with this space so if you find someone we're happy to connect with them too but at this point we do wholeheartedly recommend them because they helped us through the process and i think they're one of the only options out there all right joey those were top five questions so again you know i think we probably have a couple more we should probably we'll do another one again in the future but
Speaker: We are scaling back our consultations now. We're going to be heads down, building, working on things to improve the site, things to improve our business and kind of re -brainstorming. We really appreciate everyone taking the time to schedule consults. We'll still have a couple of consults per week, but they will unfortunately be paid. We just need to prioritize our time at the end of the day. And we had enough no shows that we needed to do this.
Speaker: Yeah. And yeah, likely we'll speak about the Airbnb process in depth as we go forward and, you know, let us know if that's topic of interest or if anything else we mentioned is interesting, we can speak about it. Yep. Cool. Well, thanks so much for listening a lot. We're going to do a couple more updates. If we're going to, we're going to get on it 2024, Joey, we got to hit some more pods. I'm setting a goal, weekly pod. All right. All right. Cool. Catch you later.
