Transcript
Speaker: Hey, happy Friday or Saturday if you're listening in Japan. Today we have an awesome episode lined up with one of our Akiyamart preferred agents, Robert. We cover a wide array of topics but really focus on the rental space for foreigners.
Speaker: I personally learned a lot in this conversation and I hope you enjoy the episode.
Speaker: Welcome back to the buying a house in Japan podcast. Today, we have a special interview with Robert Sorensen from Basamichi Room.
Speaker: ah Robert is one of our newest Akiyamart preferred agents. So really excited to have him here. We've been chatting with Robert for the past couple of months, finally convinced him to come on the pod. um Today joined with my co-host Joey. Joey, how you doing?
Speaker: Doing good. What episode? We're nearing 100 episodes, right? What number this? 94, 95? We are in 92. So robert i need okay not quite Robert is our 92nd episode.
Speaker: ah Robert, thank you for being here. How are you doing today? ah Thank you for having me. I'm doing fine. Thank you. 92 episodes. Wow. So there's some episodes that missed. I need to go back and check your library.
Speaker: and I'm personally embarrassed by the first 50. fifty Oh, really? yeah took We got to keep them on. so You were talking the other day about removing some of the older ones. i We just keep them on, I think. Badge of honor to have cringeworthy episodes.
Speaker: It's good to look back and see how you've improved over time. Exactly. Robert, you've been an agent for many years, right? I think maybe a little bit longer than some of the other agents we're working with. them I'd love to hear a little bit more about how how you got to Japan and how you became a real estate agent there.
Speaker: um I arrived in Japan in 84, right out of high school. I worked for the Navy of for four years. After that, I worked for the Red Cross for about, I'm going to get the time spans messed up here, but probably about 12, 14 years, I believe.
Speaker: um After i got married, I started working for Japanese corporations and I worked for one company ah for about another 12 years as a ah corporate employee doing their editing of all their English publications.
Speaker: So was basically a copy editor slash proofreader slash translator slash English consultant, bla blah, blah, blah. um But after my wife passed away, I needed to just break free of my life at that point. And saw an ad for a company. They're looking for a real estate agent. So I went to work for them. And that was mostly dealing with rental properties. The majority of my experience is working with ah rental properties for foreigners looking to rent apartments who or houses here in Yokohama area.
Speaker: ah When COVID or just before the, I'm sorry, just before the Olympics came, the company I worked for, they had transitioned to working only on do you call it? Those short-term rentals?
Speaker: Yep. Like one month or one week. And they had to put all of their eggs into one basket and then COVID hit. COVID. No to tourism shutdown, border shut. Yeah.
Speaker: And so the company went through a huge disruption. It was crazy. How long was the border closed? That was two or, sorry to interrupt Bob, Robert. Two and a half years, I believe.
Speaker: Two and a half years. Okay. Yeah. Long, long time if you're trying to run an Airbnb business. Oh yeah, definitely. saw the writing on the wall, jumped ship and found a company that had experienced renting to military personnel, which was a signal that they know or how to deal with foreigners. And especially when dealing with the personnel, there's a higher hurdle to overcome compared to just a normal foreigner trying rent here in Japan.
Speaker: And if a company is willing to rent to a military personnel using a military styled contract, that's a good signal that they're really open to working with foreigners despite ah the non-residential status of military.
Speaker: So I took an interview and I asked him if they're hiring and they said they weren't, but I told him I was interested working. And after speaking with the CEO, he took me on board and Yeah, my first sales experience was with this company. So that's been about three and a half, four years now.
Speaker: And Basha Michi, sorry, Basha Michi is, specializes helping military personnel find rental units. Is that correct? What it turned out is that different company?
Speaker: No, it's the same company. Yeah. So Basha Michi, they were fully open to dealing with military contracts. and So that was like a signal to me that, okay, these people aren't the tent to working with foreigners.
Speaker: They did have an English speaking staff, but still they were willing to work with military personnel. And they probably understand all the SOFA status related issues that might come up.
Speaker: Yeah. As far as rentals go. Yes. After I started working there, we sold two properties to military personnel. And so our knowledge base expanded from there. What's SOFA status?
Speaker: but I'm sorry, ah status of forces agreement. So that's the treaty between Japan. i think it's the same term used in Europe as well. It's just a treaty between the United States government and the host country of the military or military related personnel. So basically,
Speaker: They can reside in Japan, but they don't pay Japanese taxes and they don't have a residency card. So they're like long-term tourists on paper. and which very like very hard Bank accounts, I've heard, which is like, so yeah yeah, long-term tourists, but there are interesting benefit. Can get bank accounts, maybe can get mortgages too.
Speaker: I'm not 100% sure there, but maybe, Robert, have you ever heard of that? Mortgage is possible if you have a Japanese spouse, you can work it out that way. But a status of forces agreement person, whether they're military or civilian, a SOFA person, they cannot get a Japanese loan from a Japanese corporation because they're not in Japan. So um on paper, they're not in Japan. They're just too high of a risk for the mortgage provider. Okay. Good to know. We've had those questions before.
Speaker: ah give Going even further back, before joining the Navy in 89, where were you? Are you from the U.S.? Are you from Canada? Oh, no, I'm from a very small town of about, but it was about 300 people back small valley in central Utah.
Speaker: From central Utah to the Navy to Japan. Yeah, I have severe allergies and growing up on a dairy farm was the first miserable 17 years of my life.
Speaker: but Joining the Navy, i was hoping I could get out in the middle of the ocean and just free myself. Disastrous spring, summers and falls. ah But the Navy sent me to Japan and I never saw Sea Duty, ironically.
Speaker: ah What about Cuffoon Show? how How are you doing with your allergies here? But it's only a spring. So it's still a big relief from living back home where you got alfalfa and corn, wheat, ragweed. It was just miserable for three three quarters of the year back home.
Speaker: Did you ever move back to America after getting started in Japan or since since that day? i got out of the Navy in 88 and found a job working with the Red Cross.
Speaker: And you know you just start a new job, you start a new career, your finances are tight. and So I went back maybe only two or three times. My wife, ironically, she went back several times.
Speaker: Yeah. So she was like the, my parents just fell in love with her. And so as long as she had the credit card, she was able to do anything she wanted back home with my family. No, but I've been here the whole time. I just, I like to go back, you know, work. yeah I've always had side hustle, it seems. So even if I had time off from my main job, it was still hard to find time with my side hustles to, you know, so spend a whole week or two weeks away from whatever I'm doing here to go back home.
Speaker: And that's actually how we found you. I think you maybe you had reached out to us and then our first project with you, ah we actually had asked you to take some photos for us. Oh, the normal house. Yeah. That was fun.
Speaker: For people listening, we we started and we're still trying that this new product called Acumart Native Listing, where we feature people's properties, sellers on our website.
Speaker: One of the big pain points, and and Robert, I actually want to talk to you about this, is the photos on these listings are usually really bad. yeah yeah You'll see good photos. So we're like, Robert, yeah We found out Robert was a photographer. Like, Robert, hey, we got a mission for you. Can you go down to Noma? what We call it Noma House, which is in Kansai, and take photos of this place because the photos we had were just like bleak before that.
Speaker: So Robert helped us take those photos. Robert, why are the photos in on Japanese listings just not great? Did you did you see this, the Reddit thread? There's a big Reddit thread on this just today.
Speaker: That exact question. why Why are the photos on Japanese listings so bad? Rob, let's hear the answer, the truth. In urban areas, I think the real estate agent just doesn't really have an incentive to make good photographs. They don't really need to.
Speaker: There's just such high demand. you know, why are you going to put the money out there for professional photography when if you just put up something you took with your your smartphone at a skewed angle with no lighting and you're still able to get a client for that property,
Speaker: There's not much of an incentive there. However, properties that have been properly staged and are being sold, they've got some really good photographers coming in for those properties. ah But they're far and few between. i just don't, there's just not a big incentive really for the agents to take pride in their work, I guess, as far as the photography goes.
Speaker: yeah So you're saying there's just enough demand. It honestly doesn't matter what the photos look like. The agent is very likely to find ah a renter or a buyer. Like that kind of goes against the reason why there's 9 million Akias. There's no buyer. How do you square that circle there?
Speaker: Yeah, I think for the real for most real estate agents, it wasn't until maybe within the past 10 years or so that younger real estate agencies agencies have started to ah shift more toward putting their profile online and opening up to a wider market. So those agencies will tend to have better photography, they'll have a better user interface on their website.
Speaker: But the vast majority of real estate agencies are still mom and pop shops with a classical fax machine and maybe even a Windows 95 computer running in the office. oh and so there's I believe that answer actually. yeah so yeah For the majority of those, yeah i can't even interact it with them by email. It's either telephone and a fax.
Speaker: So there's a huge gap between what they can do and what they actually want to do, especially if it's an old mom and pop shop and there's not much competition for them. What about the, so I've also heard this i this idea around why the photos are so bad. Some people will say, oh, they're purposefully trying to make it difficult to, so for one thing, Japanese listings, they never put the full address there, which I believe is they're trying to, you know, you have to contact the broker and and they they will introduce the property to you. So you can't bring your own broker and go look at that. And I've heard the same thing with photo. Do you think gatekeeping could be involved? Because I do see gatekeeping in other aspects of Japanese real estate listings.
Speaker: Yeah. So there are two situations I can, that I can address. mean, in regards to that, if the tenant is still living in the property, they probably haven't tidied up the house to make it photo or photo worthy.
Speaker: And also they probably don't want people to see what their house looks like in the inside, just out of Not for privacy as from a security standpoint, but just from a sense they don't want to be embarrassed by their poor interior design, or they just, saw they don't want live their yeah home life to be exposed to the world out there.
Speaker: And also Reigns, network that we all use, especially for um retail properties. It's just a PDF or a converted Photoshop, not Photoshop.
Speaker: What's that? My PowerPoint, power page PowerPoint page that, or an Excel that they've assembled into one single document. There's no room for photographs anyway.
Speaker: And if they are, they're just really low value or blurred or pixelated. So the one thing is privacy and the owner just doesn't want to everybody, they don't want the whole world to see what they have in their house or how crappy their interior looks.
Speaker: Also for some agencies, if the interior is not very good and not photo worthy, it's probably better just not put any photos up in the first place.
Speaker: if not to I've seen some really creepy Akiya shots taken at nighttime. yeah Looks like a haunted house. i would I think it would sell better with no photos. I agree with you. Yeah. So there are cases where for clients that I've shot and that' shot photos for, where I take photos of everything so that they can have a good collection they can choose from to put on their website.
Speaker: And it's clearly noticed where the balcony looks really trashy or the balcony next door. They've got a hoarder living there, but that kind of shows up in the photo. So they won't show those photos. But on the other hand, I think personally, I think it's important that you show the property with all of its good points and bad points so that you don't get accused of misleading the client.
Speaker: So that's just my personal point of view, but. Yeah. um There's a little bit of gatekeeping, privacy issues, and some agents just don't care or they don't see the value of having photography for the property.
Speaker: Can't justify the expense. I agree sometimes, especially we look at a lot of cheap homes on the cheaper end of the scale here. And yeah, you you do the mental math and you're like, okay, this much to hire a photographer. Is it really worth it to to try to sell this house?
Speaker: Robert mentioned something for the listeners it called RAINS. So in Japan, RAINS is the equivalent of the US is like MLS, government database of real estate.
Speaker: And with the RAINS, something that as we build AkiMart, it is very challenging to get clear, good data on properties. As Robert mentioned, they're literally like PDFs.
Speaker: Doc, is like Google Slower, like, except i don't know, PowerPoint slide with ah pictures all over the place, floor map. No, it's just, it's not. It's like a JPEG, JPEGified, like screenshot of a PowerPoint slide kind of thing. It's not interactive. You just get the image almost. So you can't parse any data from it too in that sense.
Speaker: Or yeah, like a scraper can't. What's the deal with RAINs? Do you like RAINs? Why are they not updating it? It just seems like they're trying to have it be bad.
Speaker: I hate RAINs. I really hate working with that interface. ah When you enter, when you first access the database, You have the choice of either going by address or train line. You can't train line.
Speaker: cant You can't choose both. So I'm looking for a home now for a client in Kamakura. So if I choose Kamakura city, I'll, it will include everything in Kamakura city. I can't narrow it down by how far from a train station.
Speaker: But if I go in by train station, it won't let me see anything that's just a little bit beyond a certain parameters of the train station. So I've got to go back and forth. It's just probably frustrating work with.
Speaker: And a lot of times, the since we are, I'm sorry, that back up a little bit, we are required to list properties in reins after a certain number of weeks if we have an exclusivity contract with the seller.
Speaker: So a lot of agents, what they'll do is they'll do the bare minimum to pass the requirements. And so I'll see some nice listings that my client would like with a really good price. And I open it up and it looks like it's being rented out.
Speaker: It's being sold as a, what we call it? ona changei Comes with a tenant. Yeah, it comes with a tenant. Yes, yes. Now that's not what I'm looking for. I can't. parse out those particular properties.
Speaker: So it's a little bit frustrating, but yeah, there's no incentive there either for whoever's in charge of that organization. It's a quite, what's the word? Quasi? Quasi private government institution. So I'm sure it's a ah location where politicians or bureaucrats can go work at Reign's as a director or consultant, get a nice false salary without having to do any work.
Speaker: Is the impression I get. It's a carryover from the bubble era. Oh, no. I get the impression that that they are politically powerful and don't want to change anything. they They like the system as it is, and they're going to defend it.
Speaker: Yeah, it works well for them. And since for most of us, especially for younger or more progressive real estate agencies, our voice is very weak as far as trying to make changes and upgrading or modernizing anything.
Speaker: Like I mentioned you earlier, there are a vast majority, I think, i real estate agencies are mom and pop shops. they're They're not even using reins on a regular basis, I would think. I think it's just all by word of mouth, working with local owners, local sellers.
Speaker: It's really Sorry, could I... Not set up for the 21st century. Could I just ask a little bit more about Reigns? So what do you actually use it for? So you mentioned, okay, you if you are working with a seller and you have an exclusive contract or some sort of legal reason why you need to post the property on Reigns after a certain number of weeks, but ah any other reasons why you use Reigns to find properties? I guess my question is why wouldn't you just use Sumo to find properties for your clients or do use Sumo?
Speaker: in addition or Akiyamart as well, or you do use these other websites in addition to Reins. I'm just curious about like, where does Reins fit into your daily life as a real estate agent in Japan? My company, we we follow the same flow. We don't advertise so much on Sumo, Nifty, at home, et cetera, et cetera, because it's so expensive.
Speaker: and So if we have a property we we want to sell, we'll post it on Reigns and that gives the property access to every other real estate agent in the whole country.
Speaker: So that's the portal that we want to use to expand our market share. With the hopes that if you post the property on Reigns, someone else, another real estate agent with a buyer can come approach you and say, Hey, I've got someone that wants to buy the house. Okay.
Speaker: That's right. And if the buyer is not local, that kind of makes it easier for us to work with the other agent who is local to the buyer. So if the buyer's in Nagoya or Nagano or whatever, um it's going to be a little bit easier for us to interact with the buyer's agent because we know the vocabulary, we know what the documents are needed and we'll let local agent, the buyer's agent, interact with the buyer as far as getting things processed, getting the different documents that they need, getting it correctly authorized, make sure everything's clear. It's just a little bit easier flow from ah the seller's side to use reins.
Speaker: In addition, a lot of the items are listing posted on the open web, like Sumo, Nifty, at home. There are a lot of dead listings out there. So you really can't trust it.
Speaker: In my personal experience. Whereas Reigns, we are required by the rules that we agree to and pay for to unlist the property once it's been sold.
Speaker: um just There's a strong incentive to follow the rules of homes, I'm sorry, of reins from an agent to agent standpoint, but dealing with the open web, a lot of agencies will keep listings online just to attract potential clients, yeah even though they know the property's already been sold.
Speaker: I've heard of that. Tricky. Or the undervalue of property that that you're something like that by so much that it's not even on the market, but it's again, just to get someone to contact them. And then like, we also have these other properties.
Speaker: ah So it's it' really frustrating, both for the rental side of the house and the retail side of the house. Clients will see something online, especially foreigners, but they'll use the translation. Google Translate.
Speaker: Yeah, Google Translate, or they'll switch their browser to English. And they'll send me a lost ah nice list of lots of properties that... don't exist. So it's like, it's just easy for me to tell them what's available and choose from that list as opposed to going through all the recommendations and then finding out that those properties don't even exist anymore.
Speaker: So how do you figure out that they don't exist? Are you able to cross reference with reigns somehow, or how do you actually pull up the address and but either the address and the, by address. Okay. Typically the address and the value or what it's being sold for and go search it in Reigns. Also, at BB is the other portal that we use in in within the industry.
Speaker: But yeah, I'll cross-reference it to Reigns. And if it's not there, that means two things. The property's already been sold. or the property is still under an exclusivity contract with the seller and they haven't reached the time limit where they have to put it on reins.
Speaker: And if that's the case, I can still help my client work with the seller's agent on that property But it create it requires a lot of extra legwork.
Speaker: And in most cases, the seller's agent doesn't want to deal with the buyer's agent. They want to keep that commission. The seller's agent wants to keep the commission from both the seller and the buyer.
Speaker: So there's not really a big incentive for them to interact with the third-party agent. so if sell is So if you are working with a seller and it's not an exclusive contract, do you still have an obligation to post on Reigns or you can keep that completely secret?
Speaker: As far as I know, they are not required to put it on Reigns if they don't have the non-exclusivity. But if they don't have the non-exclusivity, then that's a signal to me that they're pretty easy to they're willing to work with the other agents, um they're not really looking to get both commissions.
Speaker: And yeah, I haven't actually come up. I don't think I've experienced situation where there is no exclusivity and it wasn't listed on reigns. I'm sure the situation exists.
Speaker: Yeah. All right, I'm pulling this out of the technical. i Okay, yes. going to switch gears here because I know you've had a lot of experience in the rental space. and it joey Joey's actually looking at maybe renting a spin in Tokyo as he gets his employee visa here.
Speaker: As a foreigner, I'm just going to situational here. Let's say I want to move to Japan. i have a remote job. I would like to rent something in Minato or Yokohama or something like that for a long-term lease.
Speaker: Am I allowed to do that? Or what what do you tell someone who's trying to do something like that? Do a long-term lease for an apartment in Tokyo? So there, let's back up a little bit. There are two basic types of rental contracts. One is a standard lease.
Speaker: And that's a two-year contract that's automatically renewed unless the ah tenant opts out. And then everything else is just basically short-term.
Speaker: And in most cases, the rent is paid in full upfront. What's a short term? yes How short is short term? Typically one month, it could be one month. It could be three months. It could even be two years.
Speaker: Short term, I typically bundle short term in with fixed term leases. Fixed term. Fixed term can be three months. It can be six months. it can be two years. It can even be three years in some cases.
Speaker: The deal with a fixed term or short term contract is need to move out or or you should ah expect to be able to move out once that leashes up. With the standard contract, which is a two-year contract and it's automatically renewed, ah once you get in, it's going to be really hard for the owner to kick you out. The rights, the laws are set up to benefit the rights of the tenant over the owner.
Speaker: Hmm. In those cases. And in that particular situation with the standard two year lease, it's automatically renewed. And Lords want to make sure that they're getting a tenant. Who's going to pay the rent on time. They're in a secure job.
Speaker: um They're not going to cause hassles with their neighbors. So they're like and looking for the ideal tenant. I don't tell it would be anybody who isn't basically a foreigner, a single mother with a child, an elderly person who might pass away during their tenancy.
Speaker: and And of course, ah part-time workers, students start to fall into that realm as well. if it's a is If it's an ideal property with high demand and a good, a nice rent, a good return on investment from the owner standpoint,
Speaker: For those properties, they'll often rent it out under a fixed term two year lease so that the owner can raise the rent after two years are up without any issue.
Speaker: And if it's like a one of the high rise tower apartments on the waterfront in Yokohama or Roppongi or Shinjuku or Uen or whatever. where those price values are actually increasing annually.
Speaker: And so there's a strong incentive for the owner to keep those under a fixed term contract so they can raise the rent ah in accordance with market values and also their property taxes increasing. But that's for an exclusive or elite clientele anyway. So it doesn't really fit the average.
Speaker: person like Joey coming in for a tour contract. And in Joey's case, if you were coming in here, you really need to have some domestic employment. You need to have your domestic telephone number, your domestic bank account, an emergency contact and domestic emergency contact in most cases.
Speaker: There are a lot of barriers for somebody who's just coming into Japan. Yeah. I'm curious about, again, the sort of gaijin friendliness of different listings out there. So say I'm browsing on Sumo for rentals or some other Japanese listings website, you're going to reckon that I would not be able to rent 90, 80, 75% of those rentals because they're likely standard lease and no one's going to rent to me as a gaijin under standard lease agreement. Is that i don' it good
Speaker: I don't interact with listings on the open web so much. For rental properties, I use the portal site at BB. And in my experience, close to 70 to 80, 90% of the properties that I see that meet my client's criteria, when I call the property manager to confirm both actual vacancy and if they'll accept a non-Japanese tenant, most the time I get turned down.
Speaker: Really? 70% of the time? Yeah. In some cases I've called like 20 properties they all said no. No. So it's just incredibly frustrating. But that also plays into how...
Speaker: willing my client is to be flexible. So if they're, they want backyard, they want a two car garage. And they want to be, you know, 10 minutes from a train station, but they all want that with a budget of less than a hundred thousand yen.
Speaker: ah Those properties exist, but not for you, buddy. ah So actually I'm curious, but yeah, what advice do you have for someone? Let's say i was able to secure a visa in the next 12 months. What advice would you have for me coming into the Japanese rental market to secure something that works for me?
Speaker: The very first thing I would do is before you come to Japan, sign up or subscribe to some kind of telephone number, Japanese telephone number. Got one. You can get before you arrive in country. Because once you arrive in country and you try to get your cell phone number, in most cases, you're going to need an address.
Speaker: You're going to need a bank account. But to get the address of the bank account, you need a cell phone number. But to get the cell phone number, you need an address or a bank account. So you're stuck in this loop.
Speaker: Yeah. Yep. I've heard of this before. Yep. That's the first thing. For people listen people listening out there, I use mobile.com, M-O-B-A-L. dot com I was able to get a Japanese phone number, um which I went to Vodafone. I went to SoftBank everywhere.
Speaker: When I was just there visiting as a tourist, no one will give you no one will allow you to sign a contract for to get a Japanese SIM card except for this company, Mobile, and one more called Sakura Mobile, I've heard.
Speaker: Oh, Sakura Mobile. Did you grab this with our company, though? Or what kind of documents do they ask you for Mobile when you signed up? it's You can do it? Yeah, I don't think it's with our company. Actually, i think it was just me straight up my name. Yeah.
Speaker: right, Robert, I want to just play a quick game of what can you get for this? What money in in Tokyo? What's per month? Let's say what's 1000 US dollar or what is that like 150,000 yen?
Speaker: What kind of apartment does that get you in central Tokyo? Central tilt, it really depends on which station, which train line, but just off the top my head, maybe a 1K 16 to 20 square meters. For something that's nice with a bathroom that doesn't have ah that oxidized yellowish, orangish tone to it.
Speaker: It's still white and hasn't. no So it's built within maybe the last 10 to 15 What, and it so 1K is equivalent of a studio in the U S right? So yes, where the cooking area is not in the same space where your sleeping area is.
Speaker: Yeah. One bedroom. Yep. Okay. Let's up the budget, double it. 2000 U S dollars. So 300,000 yen. And what does that get you in Tokyo? Oh, that get you in a nice one LDK. and If you're willing to work, to walk maybe 15, 20 minutes to the station, you could even get a two LDK.
Speaker: If you wanted a, if you're fine with a wooden two story flat, maybe second story unit or first story unit, you can maybe even get by with maybe a three, dk a three bedroom apartment.
Speaker: Okay. But in really nice locations, you're still going to be stuck with a one K or a one room, a one room apartment or a studio flat. Okay. Yeah. ah yeah yeah yeah Forget it. Maybe you can rent a blue sheet and put that on the ground. That 4,000 US dollars or six, was that 600,000 yen month?
Speaker: What's that? What's that going to Get Joey in Tokyo. or six was that six hundred thousand yet a month what what's that what's that goingnna get get joey in tokyo Yeah, that can get you a very nice, that can get you a comfortable apartment. Maybe even with a one LDC where you've got the bedroom, separate living, dining, separate kitchen.
Speaker: You're probably going to get modern kitchen appliances, built-in stove top. You don't have to bring your own stove top with you. And the bedroom will probably have a full, at least six times a size, which is the basic size.
Speaker: So you could fit a nice comfortable semi double or double sized bed and not have to jump over the bed to get to the other side of the room. That would be nice. Okay. $4,000, Jerry. Let's see if we can. Yeah, and on Instagram, some like eHousing or Mike at eHousing, I see some Instagram accounts out there that they're posting properties in the $4,000 range. there's some They're nice, I would say. They look modern.
Speaker: um There's some space. you know Sometimes ah they're posting something that seems like it has a lot of space, but it's like way, i don't know, somewhere south of Shinagawa or I'm not quite sure where. So a little bit outside the downtown core of Tokyo, I would say. But I think $4,000 goes a long way in Tokyo.
Speaker: Yeah, that could do well if you're on a major line, on a trunk line, like ah along the Yamanote line, the Tokyo loop. You're going to get a smaller apartment, but it's going to be incredibly convenient for your daily commute or visiting with clients or just hanging out.
Speaker: And if you're out with friends late at night and and you miss the last train, taxerite isn't going to break the bank to get home because you're in that area. Understood. And okay. So now over time, how much have you seen again? we don't need numbers here, but you've been in the rental market space for quite a while. Have you seen Tokyo just like skyrocket or were there bumps along the years or any thoughts about as how much has rent really increased in Japan?
Speaker: I'm primarily focused in Yokohama. So I do get inquiries for people who want to live in Tokyo, but there are just so many real estate agencies now who have English speaking staff, especially from, sees with staff who are bilingual or trilingual in Chinese, English, and Japanese.
Speaker: And so they've basically flooded that, that market there. they They can. help anybody who wants to live in Tokyo. I don't know the quality of their services as well, but in my case where I primarily focused in mostly Kanagawa, and which would include Kawasaki and Yokohama my main, is where the heart of our, my clientele worked with.
Speaker: I'm sorry, what was the question? but you i I think you answered just like how much has arisen? It sounds like the competition has gone quite high on both ends. Besides exclusive or high end markets, whether it's the Okama waterfront or central Tokyo,
Speaker: Rents haven't changed that much in the 40 plus years I've been here. My very first apartment was a brand new one cave flat, a one bedroom flat with tatami mats, but it was brand new.
Speaker: I paid 70,000 yen, but I was being paid in US dollars in those days. Converting it into yen, I was living like a king. The same flat in Yokama now, but much older, but still clean and livable.
Speaker: 70,000 yen is still a reasonable rent to expect. um Understood. Robert. It's been stagnation for a long time, basically. Sorry, can we, I want to go back to the earlier conversation of what should I do in advance of trying to secure an apartment in Tokyo? So get the phone number first. So everyone's mobile.com. I got the phone number. What's the next step? Let's say the government grants me the visa. They say I have this IDU card ready to go.
Speaker: What should be my next step? In order to make sure that you are able to work with the vast majority of agencies who will work with a foreigner, like you like we mentioned, the phone number, that's going to be your biggest hurdle. Because once you get the phone number, then you can get the bank account, right?
Speaker: Okay. um With the Zidu card and phone number, you get the bank account. Right. And the next thing would be your domestic emergency contact. And that's a big hurdle for a lot of people coming up here for the first time.
Speaker: Not all contact. Yes. And that's for the guarantor company. They're the ones who actually do the tenant screening from a a risk. They conduct the risk assessment because they're guaranteeing your rent to the landlord.
Speaker: Right. In the event that you fail to pay the rent on time. So in most cases, they're going to want a domestic contact. And that's perfectly reasonable because 99% of their clientele are Japanese.
Speaker: And if you're Japanese living in Japan with no emergency contact, maybe you're a high risk person. ah You don't have family. You don't have coworkers. don't have friends. Nobody's willing to hold up the arm and say, yeah, I'll be the emergency contact.
Speaker: So for a foreigner, you really need to line somebody up, whether it's a friend or a coworker or a colleague is going to be here. If you're a student, somebody at the school or your professor or your H or the student council.
Speaker: And a lot of people need to remember the emergency contact is just that an emergency contact that they're not a personal guarantor. There's no financial risk whatsoever.
Speaker: ah The guarantor company and the ah landlord's agent, they just need to be able to call somebody and say, hey, what's going on? I'm to Joey ask him why his rent was delayed. Or ah there's going to be a fire inspection and Joey is not answering his phone.
Speaker: Joey was incarcerated. Or he's overseas on vacation. but Or he's in a hospital in a coma. So they need to be able contact somebody to find out what's the deal.
Speaker: And so they just want to be sure that they can contact somebody. So do I find the guarantor company or is that something my real estate agent helps me with as me as the renter? How do I get in touch with our, yeah, the guarantor Shifting to the guarantor company. That's all decided by the landlord's agent.
Speaker: Okay, got it. So they will sign a contract with a guarantor company and they'll submit all their documents, go through all the hassle and the paperwork, and they'll just limit themselves to that one guarantor company just because it's easier for them.
Speaker: So when a foreigner comes in, and most guarantor companies don't have Japanese or English-speaking staff. And so that's where the biggest hurdle will come in where, like, if the guarantor company is Nihon Safety, they're like, oh, no, we don't speak English. Sorry.
Speaker: And they're just... It shuts down the competition. Womp, womp, womp. Curious for, from still going with the Joey perspective, let's say Joey's w renting this $4,000 sweet spot in Tokyo. Like, he's got the visa, he's got the bank account, he's all set up here. Like, how much would you budget for him in just fees in general before he gets his first, he gets the key to that apartment?
Speaker: Minimum of six, just $4,000. for yeah four thousand Minimum six to seven months rent in it. ah What? Really? Yeah. And because Joey's going for a nice high-end apartment where there's going to be a lot of demand, a lot of competition, landlords can easily ask for two months key money.
Speaker: the gift that you gift you don't get it back right no that's basically just to express your appreciation for the privilege of renting that property it's a bribe yeah it's a bribe okay that's more associated with the contour area i've heard from other people and i've seen online where in kansai in the osaki area In some cases, that's not really a thing.
Speaker: Don't quote me on that. Okay. But for the content area, especially Tokyo Yokohama, that key money is... yeah Key money, Reikin, and then Shikikin. Yeah, Shikikin, the deposit, the refundable deposit.
Speaker: So you do get that. So one, you get back, one, you don't get back. Right. Key money is just outright. That's just a loss. It's a bribe. And from the landlord standpoint, if it's a really nice property and they're tacking on two months rent of key money and that tenant is really, is willing to pay that money. That's a great sign to the landlord. This person is legit. aggressive They've got the money.
Speaker: If they don't have any qualms about paying that fee, sounds like they're going to be a really good tenant. If somebody balks at it, no, I'm not going to pay key money. Okay. Then I don't want you because i can get this.
Speaker: I can get a tenant who will. and So bye-bye. Understood. Okay. Robert, with a couple minutes left on the podcast, I'm bringing it to a couple advice corner with Robert here.
Speaker: I got this moody music here. Turn that off. ah Robert, a couple questions for our guest. I know that was awkward, but it worked. For someone who is considering buying or even renting ah spot in Japan, what things should they consider? but let's Let's actually go for the buying perspective.
Speaker: I'm in the States, you know, I'm from Utah also, and I'm looking to buy in Japan. What kind of words of wisdom do you have for them or thing advice you have for them before they embark on this Akia purchasing journey?
Speaker: Well, with Akia Mart, it's the first time I've dealt with clientele who want to buy something that is not livable right away. hey So this is new to me. I've only sold with non-Akia clients. I've only sold properties that are basically ready to move in. They just need maybe some new wallpaper or something like that. But I'm finding that, yeah, Akeamart clients are really neat.
Speaker: They want something that they need to put some work into. And so far with the clients that I've had, so that's been a very interesting aspect. And for me as well, I'm looking at properties with a different set of eye. Okay.
Speaker: potential Yes, this could work. You're going to have to budget an additional 10 or 20 million yen to stabilize the foundation and maybe replace the roof.
Speaker: But yeah I can see the draw where some of these older houses with a beautiful wood interior and they still got the original ceilings where you can see the bigs yeah twisted wood beams that had been darkened from the Hibachi over the past years.
Speaker: Oh, 70, 80 decades. I can see the draw. Yeah. It's pretty cool. I'm sorry. What was the question? i think that that's good. What advice or wisdom do you have, but it sounds like. Yeah. yes Yeah. Yeah.
Speaker: Don't be surprised to see. Yeah. Just don't get your hopes up. I mean, if you've got a low budget, then expect to, you're gonna, you're gonna have to budget for some work.
Speaker: These free houses are not free. You're gonna have to spend some money for some, for some work. But for what I've seen, there is an awful lot of potential. If you're willing to put in some time and effort or do something like Anton does, you know, where he really is into the DIY stuff.
Speaker: There's a lot of potential there. Also yeah I've had a couple of clients refuse properties that are on leasehold land. Yeah. I don't quite understand why that's a drawback for buyers.
Speaker: Maybe it's just... I guess from a U.S. perspective, we want to own the land. I think the idea of owning the building on top of the land but not owning land doesn't seem sit well, I think. earth like um But yeah, I mean, we we have actually just quick plug on Akimar. We have a leasehold filter.
Speaker: We ended up, Joey and I would always find good properties. We're like, dang it. oh After getting our hopes up, seeing a leaseholder, we'd drop out of that. But yeah, I think that's how I feel about it personally. Yeah, if you were, if you're going to live there yourself, you're to actually have your, raise your family there. I can understand why you'd want the security of actually owning the land.
Speaker: Of course, if you're taking out a mortgage and the leasehold is going to be a huge barrier. But if you're an investor or you're looking for something you're going to put up for Airbnb, I see these leasehold properties as a missed opportunity. Oh.
Speaker: um I think that maybe something to be- I think couple leasehold properties. Joey, I think Anton has two leasehold properties, right? The one, yeah, at least his ones in Sangin Jaya, I believe, are leasehold properties. So he's buying them, ah renovating them, and making a profit off those properties.
Speaker: Robert is right. Yeah, I think that's a missed opportunity. The prices are really good and you can't rebuild on many of those properties anyway, especially if they're at the low cost because there's no access. But from renting it out or short-term stays or Airbnb, it seems like a missed opportunity that a lot of people are passing up for maybe cultural reasons and not financial reasons. I'm not sure. How long are these leases? Could the landlord just take it back in 10 years after I poured 80K into renovating a property? That would be my concern.
Speaker: The landlord just says, oh, I'm not going to lease it anymore. you're grandfathered under the original lease contract. You have to get permission from the owner to build something new or different.
Speaker: ah It's almost like the rental contracts. If they don't have a good reason to kick you off the land, they can't do that willy-nilly. okay The leases are typically for 20 to 30 years.
Speaker: Yeah. So in my case, if I were an investor, I'm at 59 years old. If I wanted to invest in property, I would go with a leasehold property right away. I'm not going to be here when the lease renews in 30, 40 years. Why not take advantage of it?
Speaker: ah This is interesting. You're the first person I've ever heard express this. that leasehold properties are not a a negative thing. In fact, that they might be a little bit of a diamond in the rough. Yeah, I'm not a financial advisor, so I might be missing something. i' I'm not into investing myself. totally blank on that, but just for upfront value, I don't see the downside if you're not actually living there.
Speaker: And since you're covered by your grandfather by the old contract law, it's not that easy to kick somebody out. So it you can happen, of course, you know if a developer comes in and buys up the property.
Speaker: And even if they do kick you out, they've got to give you some compensation. This is not going to be willy-nilly. Yo, out next week. No, it's going to be a six-month legal protracted process and you can ask for some compensation for moving and everything.
Speaker: There is some risk there, but you know what if you buy freehold property and the river overflows its banks or a mountain climbs, smashes down onto your house or earthquake wipes you out?
Speaker: You can't. You can't do anything with absolute zero risk. So fair, valid point. Yeah. I might be missing something, but that's just from, for a financial, from a financial point of view, or just from investment property, it seems like a missed opportunity. And I've had to ah tell my client, oh and no, this house is these holds. They refused it, which is sad because it was a really good property in a good location.
Speaker: Yep. Robert, very last question for the pod before we let you go here. If you had a million dollars, where would you invest in Japan outside of Tokyo?
Speaker: Can't be Tokyo. Can't be Yokohama either because that's for or where, what prefect, where would you want a vacation home if you had a million dollars to spend? When I'm just trying to take a break from work, I like to scour listings in the Izu Peninsula.
Speaker: Izu, okay. From a photography standpoint, you've got mountains, you've got coastal. I just love that location. It's so photographic. However, i just got back from a... the highlands in Nagano prefecture yesterday.
Speaker: oh my God. It was so beautiful and it was nice and cool. The breeze is coming in. ah We're about 1,600 meters elevation. lot of ice. Where in Nagano, Urias, where did you go?
Speaker: I just was second. I was a 7 Rizao and I felt the same. I was like, Joey, did we buy Karu Rizao property? It's so cool. Kirigamine. Kirigamine Highlands. Oh, interesting.
Speaker: Oh, it was beautiful. wildlife, skies, it was just so comfortable. it wasn't humid. It wasn't hot. I think, oh my God, I want to live here. I don't want to go back to Yokohama tomorrow morning to go to work.
Speaker: Okay. At least during summertime, but overall, easier I think that's great because you still have easy access to Tokyo. ah Catch a train, hop the hop aboard the Shinkansen in Odawara, zip into Tokyo if you need to do business or have some city life. But Yeah, EZU, that's where my heart is. I just, I really love that area.
Speaker: All right, let's buy leasehold property with you in EZU. That would be nice. food If I find something, I'm not going to tell you, buddy. Keep it by myself. We'll go in together with it in the EZU. Okay, I can do that. Yes, okay. That'll work.
Speaker: But Robert, thank you so much for being on the podcast today. We're really excited to work with you. i think you've shown a high level professionalism from taking photos to working with our customers. We really look forward to continue working with you. And again, Izu Peninsula, leasehold properties. Let's talk about that.
Speaker: yeah Sounds good. Sounds and like a deal. Thanks so much, Robert. Okay. Thank you for having me. We'll be in touch.
