Transcript
Speaker: Welcome back to the Buying a House in Japan podcast. Joey, this is our last live podcast in person for the year, or at least in Japan, or at least in Beppu. Yeah. We've done a lot of podcasts over the past 10 days. It's been a content creation past 10 days. Joey, first off, thank you for compacting the what would have been a month stay into 10 days. Unfortunately, I had some family health issues. So I have to go back to California today, flying from Oita to Narita and then Narita back to San Jose. So this is a little bit of a trip recap slash 10 insights that I feel like topics we've discussed over the course of the past 10 days, things we've noticed that have stood out. Absolutely. And these 10 days, holy crap, we've done a lot. So just to catch everyone up,
Speaker: landed in Tokyo right away, met Joey at the airport. We met our agent, Leo, there too. And we took a cab, a gro that was a brutal cab, two hours to Tama Base. After 16 hour flight, two hours in a cab. We got to figure that out or figure out how to get a closer house. But it was straight to work, honestly, right when we landed. I think the next day we went immediately into Tokyo, handled some business, talked to some corporate venture capital folks, followed by a direct trip to Miyoko. We got a last second off -market deal Miyoko and drove four hours up to Niigata, checked out at abandoned home, talked to this guy, Matt Guy. So we have a lot of content and interview and videos from there. What do we do after that, Joey?
Speaker: We drove back to Tokyo from Niigata immediately when they had the J -Rep conference put on by Ziv over at NTI, gave a talk there the next day, didn't after party and then hung over yeah hung over the very next day. We drove down to Nagoya to meet some new agents that we're partnering with.
Speaker: After that, we drove from Nagoya to Tokushima to meet our agent, Yo, and spent a little bit of the time in Shikoku just to see him and his family, followed by us driving down to Kochi, where we met Maigo Mika, because she's a YouTube influencer, talked to you a little bit about her day in the life, why she's in Japan. It was really interesting. I'm really bullish on Shikoku now.
Speaker: Immediately after that interview, we got on a ferry to bed, boo met with our contractor right away to discuss the house. She's so deluxe. Our first house here in Japan in that city. And then net no downtime yesterday drove to Kita Kyushu.
Speaker: to check out another property that listeners are aware of. KK20, we've been calling it another property named in Kitakyushu. Drove back to Beppu last night. And here we are. Here we are. Here we are. And holy crap, Joey. I didn't think it was possible. I'm actually less burnt out than I thought I would be, but definitely I think both of us are exhausted from all the content creation and just yeah doing this Acia tour. I don't know if anyone else in the world is doing something like this. It's not sustainable first off, but we did it. ETC card saved us too. um All right. We're going to hit the 10 insights again. We spent like 30, 40 hours on the road just talking about the space, Acia, what we're doing with our business. So we wanted to share 10 insights that we've come up with.
Speaker: Again, these are our personal opinion. People are going to be like, Hey, you guys are wrong. This is just what we think at this point. And we spend a lot of time, at least yeah again, these past 10 days talking and thinking about some stuff. So leading it off, Joey, what's number one?
Speaker: Number one is Japan is a beautiful place. It's undeniable. we I think we went to like 11, 12 different prefectures in the past 10 days. Some we just drove through, but others we did stay at least one night. And whether it's Nagano or Niigata or even Nagoya, we were blown away by. Bempu obviously love it. Kitakyushu, we were impressed by.
Speaker: Japan is a very beautiful country, ranges in where you get mountains, you get beaches. I forgot about beaches, forgot about rivers down in Shikoku. It's a good surf. We saw rivers. In all the roads are great. There's no issue, no potholes on any of these highways, no traffic even. All the rest stops are great. Just infrastructure. Fantastic. In Japan, scenery. Fantastic.
Speaker: 11 out of 10, I think, as a for Japan on just everything, beautiful infrastructure, food, safety. So I can definitely see why tourism is on the rise. But food, the list goes on. Yeah. Number two, that you can do...
Speaker: The possibilities and the things you want to do in Japan are much more doable. We had a long conversation with Matt Guy, who's a YouTuber up in Myoko. And he kept saying, hey something that he found interesting and really resonated with us is Japan is really a land of opportunity. Coming from California, I feel like I'm just bogged down with bills and stress and anxiety from jobs and things like that. but Matt talked about his separating from that Silicon Valley life and coming here and having the space to do what he wants, whether that be hobbies or being outside more and not being worried about the financial pressure. And I thought that's something that really resonated with me. And as we join, i we were touring around, we'd see like open shops. Should we make a coffee shop or wait, should we do this or should we start this business? And I feel like it's just prohibitively expensive in the United States to even think about doing something like that.
Speaker: Yeah, on top of that, like we've talked to a few people, our interview with Coons and I think a few other people with our interview with Michael Mika and Jesse, a few other people have just told me ask's about permitting, like permitting is a big, ah you know, if you're trying to build a new home extension on your home, etc, build a shed in Canada or America, permitting is a big part of the process. Not a single person here that we've talked to has ever pulled a permit for anything. You can really, if you're DIY inclined, I agree with Take as well. Like it like Japan is your oyster. You can build whatever you want. Buy buy a shop here, build it out however you want. And it does feel like there's a lot less red tape in that sense. I don't think Japanese people see this as land of opportunity, but
Speaker: from the American mindset. If you also love Japan, i do think there's a lot of you know you can buy a building with a lot of space. there's There's a lot of opportunity here. Absolutely. Moving on to number three. As we were driving down, there are a lot and a lot of akias in Japan. I think the quoted number right now is 9 million. It feels like there's a lot more. The stat is going to move up by 2030 to 23 million.
Speaker: Driving around, it's concerning. They call it the akiya mondai or akiya problem here. And it's something that I feel like people are sweeping on the rug and not really addressing. Yeah. The empty houses are one thing, but I also believe that the empty houses are like a symptom of the larger economic problem Japan will face as the labor force size just decreases due to the aging population. What's going to happen for Japan's economy as the labor force shrinks and what's, how is it?
Speaker: socially within the country? Is it going to affect crime? is it going to How will it transform Japan? It feels really brittle here. like Things are good, but ah it's not going to take too much for maybe a little bit of chaos to come through. like Our neighborhood, I think we're definitely the youngest people by 30 to 40 years. All our neighbors are 80 plus, I would say. I don't i keep saying this to Joey, what's this place going to look like in 10 years? It's going to be very different. Yeah. and yeah That's a good question. Who, want other apart from us, who wants to move to this kind of random neighborhood in a random town in Japan? There's no solution in sight. There's a couple of towns we stopped by for lunch or coffee. And we just looked around who's going to want to know, maybe some foreigners going to want to live here, but it's not going to attract a ton of people. And what's interesting is we talked to a couple of locals, our friends here, and they're just, Hey, what's the solution? They're just shrug their shoulders and be like, yeah, we're ignoring it. There's like many other, the Japanese.
Speaker: They don't address it and it's hard. It's a really hard problem to figure out, which hopefully we're doing ah helping our helping the problem a little bit, Joey. Yeah. Okay. Number four, something that we've noticed is.
Speaker: chap It does feel like Japanese people don't have a lot of money. Many people that we've spoken to here, it's just in conversation, how they're talking about their budget, whether they're looking for property or just in in general, other things. It does seem like me and Takei comparatively have a lot of money.
Speaker: And we don't have a lot of money. I live at home with my parents. Tak is scraping by in a mobile home a little bit. But it does feel like the average American European coming here to Japan will be Okane Mochi or feel very likely have more money than the average Japanese person.
Speaker: That's definitely fueled by the exchange rate. Again, we're US $1 to $140, $150ish. So that's that's a big thing there. But also we've been spending a lot of time in rural Japan. So when we're in Tokyo, sure, all our friends feel like they're living the standard life that we see in America, New York City, San Francisco. But as soon as you go a little bit further out and the jobs really just dissolve in it, it's very clear that it's There's not a lot of economic opportunity in some of these other areas and it's without that economic opportunity, there there becomes a lot of problems. Yeah. We had a $2 Okonomiyaki yesterday. It was really like good. We walked into this old lady. She was really cool, really old lady. It must have been in her 70s and 80s almost. Very curious to hear about us. but yeah She had this big teppanyaki grill where she was like,
Speaker: juggling four to five Okonomiyaki's at once and up on the sign is 300 yen for a bacon Okonomiyaki and we're like hustling for $2 a meal is not a lot of money. Yeah, know something interesting, actually, maybe this is not an insight, but she was just like, how did you guys find us? And we're like, Oh, Google, she's, I don't pay attention to that. I don't even know about Google reviews, but she has like killer Google reviews. And it's, it was really ah heartwarming to see that there's that mom and pop shop still around in Japan. Yeah. She was like, Oh, I've never looked at the internet before, but that's how we found her all five star reviews. yeah This kind of leads into our fifth point, which is.
Speaker: over several different experiences we've had here. And even over just the years that we've been coming to Japan, Japan feels like it's falling behind technologically. Like I've heard people say Japan was in the 2000s in 1980 and it's in the 2000s in 2024. Like they were advanced back in the eighties nineties. And then they were on par in the 2000s and they've been stagnant since then.
Speaker: Absolutely. and And something actually with that Okonomiyaki lady is Japan just came out with a new currency bill. ah new yeah All new bills. And at first the old lady was like, I don't like them. They remind me of playing money when I was a kid. But even more, they it doesn't work. So youre when you're at the vending machines and stuff like that, they won't take the bills. And it's just a deep problem? Like how could they roll out a currency that just isn't compatible with everything else? Japan is such a cash heavy society. I was here in the summer when they first rolled it out and we have a car in Tokyo and I was driving around paying for parking everywhere. And then all of a sudden I only start getting the new bills. I guess they were really trying to push push it heavy at the start when they rolled out the new bills and not a single vending machine. all All these parking lots are vending machine service. Not a single vending machine would take these new bills. So it's just indicative of like,
Speaker: technologically wise, like they didn't plan three steps ahead here. Yeah. So there's deep problems here and it is reflected actually in what we're doing here. We are disrupting the space and I think we're getting a lot of attention because we are breaking some rules. and We're doing something different that not everyone is open to doing, especially these Japanese companies. So a lot of opportunity for us, but also there needs to be more of this for Japan to really push forward in my opinion. and Yeah. Last thought on that as well as I see, we've we've looked at a ton of, or I've looked at a little bit of the kind of front end source code for these Japanese websites, real estate websites. And I have my own personal opinions that I think it's bad code all the way down, but I just feel that you see it in so many different places that technology is, they're still using fax machines here. So the technology is falling behind in Japan relative to the rest of the world. and
Speaker: Personally, I think that this could be one way that Japan could get out of this looming economic and don't want to say crisis or looming economic crisis that could be on the horizon is to bring the country back up to modern technological standards, subsidies for small businesses, small subsidies for tech companies potentially.
Speaker: Totally. All right, moving on to insight number six. Japanese real estate is not widely educated or known about as it is in the States. So in the States, I listen to a lot of podcasts, bigger pockets. Everyone's talking about real estate investment. Everyone's up to date on interest rate.
Speaker: It seems like from the people we've chatted with on this trip, it's definitely not as popular at least. I don't know. We we had a mixed subset of group, but Japanese real estate is still really confusing to folks. We talked to a lot of local folks on like how we bought this house in Kitakushi for 3 ,500. They're like, what? And just that offer process and how we're working on real estate and and making money. We're trying to make money off Airbnb. We got a lot of like crazy amount of interest from our cleaners and Fumi and Mika, some of the things, some people like that. its It's crazy to see that it's not widely educated as it is in the States. Yeah. A lot of people we'd spoke to and I can't blame them. I've never purchased property in Canada or the US and the GsoGlex is my first property. And that was an intimidating process. I'll be honest. It feels like you're spending a lot of money. So I do understand for people that have never purchased a property before, not understanding the ins and outs of the real estate market. That's normal.
Speaker: Yeah, but there's like absolutely a gold mine here with so much supply. The interest rate is so low and it's just... I'm sure there's people that are really pushing it, but I think it can be pushed harder. There's a lot of empty houses. There's a lot of money capital out there that for for loans that people can get for almost but sub 1 % interest rates. that its i don't know For me, it it doesn't make sense, but also at the same time, I think there's a blue ocean of opportunity.
Speaker: Yep. No, I agree with you there. And I do think there's a lot of people don't know how, like Japanese owners. I think that with the whole deal taste situation as well. I feel like a lot of the times they don't understand the contract that they're signing into with the Japanese sellers agent as well. It does seem they, a lot of people end up signing these exclusive deals where only one seller can represent the buyer. And what happens is that.
Speaker: sellers or sorry, only one agent can represent the seller is what I mean to say. And what happens is that seller's agent ends up throwing away potential buyers because they want to they don't want to work with any other agent. So there's a little bit of a misaligned incentives here where there are people trying to buy this house and the seller's agent is ignoring them. Absolutely. Leading on to point number seven, Tokyo Swindlers, Joey. I think it was funny. we We'll have more episodes about why we feel this way. But I remember we were driving yesterday to the key to Kyush and you're like, is everyone just lying to us? Like we've had some, okay. Yeah. So one, we've learned a few things about the real estate market here in Japan and everybody likes to think of Japan as everyone being super honest and super clean and polite and to the majority time and on time 90, let's say 90 % of
Speaker: The population and country is like that it is back to our first point. Japan is a great place to be deeper. We get into this. There have been some instances where we're like, we want to give this person the benefit of the doubt, but like all logical signs are pointing to this person's lying to us. As I just mentioned, the whole double handed transaction thing where.
Speaker: agents aren't representing the seller in the seller's best interests is, one, a little bit devious thing that they're doing. Two, we've had, as people who are familiar with our Kitakushu property, then Keaton who was helping us had to drop out very and unexpectedly do due to some health issues, but just the whole setup there where we paid him a bunch of money to help us through this process. And then halfway through, he has this emergency health issue and and says he cannot help us anymore, might not even be ah able to answer.
Speaker: Any texts any outsider looking at this is gonna be like you guys got and swindled I just oh yeah, so yes any outsider looking out but it also like the house we saw in key to key issue we'll talk about it later but It was banging for $3 ,500, like the quality and condition. I don't, I'm given still benefit of the doubt, but just to say, yeahp I agree with Joey. It's not as linear as we thought it would be. It's been a lot of ups and downs and similarly to I think the US, you have to be involved. You have to not micromanage, but you need to be in the game. We thought a little bit like, Hey, we could be hands off. Absolutely not. I think you really need to be hands on if you want things to be done the way you want them to be.
Speaker: Last swindle story is our contractor Sato -san. The ultimate swindler. maybe Potentially the ultimate swindler that boost swinler slash compulsive liar. um for I think it comes down to a little bit. This is my best ah overlay of the entire situation is that he has trouble telling us that the job, needs that he needs more time.
Speaker: to finish the job, and he's come up with some elaborate lies and stories on why he he was in a situation where it couldn't possibly have been finished on time. he His leg got impaled by a piece of rebar when he fell off a ladder, and then he sent us a ah picture that like looked so suspicious, and then what was the last time? Oh, like he went to jail. He went to jail. He needs to be paid in cash. He can't do money transfer. Yes. Again, just is everybody lying to us?
Speaker: I haven't eaten for three days and Joey gave him a piece of cake. And then literally right after that, we're like, are we getting swindled out of... What is happening here? so Okay. Number eight, rental market is really convoluted and it has a lot of opportunity to disrupt. As we've chatted with a lot of people, we've we learned a little bit more about it. It's not as simple as like signing a contract, putting a deposit down to get a monthly rental here.
Speaker: Airbnb currently doesn't allow for more than 30 days. So I know there's some monthly rental agreements out there, but I think this is a really big opportunity. And Joey, especially as we have our couple places now, that there's an opportunity to try to rent to foreigners that are and have furnished furnished places. right
Speaker: Yes. that You're talking about monthly rentals, right? Yeah, monthly rentals. Yeah. I do see the opportunity there. The Airbnb regulations are just oh overly strict. Maybe that's a good thing for the country. Maybe it's not. Honestly, I don't know enough about the market to ah make a judgment call there, but monthly rentals are this ah Not quite a loophole in the system, but they are the easiest way to start renting out your property to other people without going through the headache of all the mean paku and short -term rental restrictions. Generally, you just need to have somebody stay for 30 days and sign a lease agreement for the duration of the time that they're going to be there.
Speaker: and you can rent to anybody you can rent three hundred and sixty five days a year you can remove the tenant when their thirty day lease is up etc so there's a a ton of positive benefits there yeah and this is an air blue ocean that say there's a lot of opportunity we we don't know a ton about the space but as we.
Speaker: have our places and we're helping other people buy, I think this is going to be an increasing demand. ah Short plug, we launched a site, acia -stay dot .com yesterday night, just to host our stays and we're going to make this site a little bit better. But for now, if you're interested in renting one of our places, acia -stay .com, we have our Tama Base Camp pretty much up and ready. Does the form go anywhere? It should come to... a Yeah, we just put this up for now. but we it'll Email address at the bottom, email and just just email us. yeah All right, Jerry, take it away with number nine. Okay. Number nine. I want to say this one more time. I mentioned this on a previous podcast, but just one more time because this is a real insight for me that I've learned. So but we we talked to a company here that is a large home manufacturer in Japan.
Speaker: and learned a little bit about their process. They've been in the market for a long time since the 1950s, building homes in Japan. and so we were talking about pref One of their earlier products was a prefabricated house that was ah built into modules in a factory, and then those modules were assembled on site to form these kind of prefab homes in America. I guess you could probably get two single wides manufactured in a factory, both dropped on the lot and then pushed together on the lot itself. Very similar setup. and The reason this all came about, Japan's population was booming in the 1960s, 1970s, and they needed to build a lot more housing, a lot more affordable housing for the growing population. And those are the akias that we're seeing more or less. Maybe they weren't prefab, but from that generation where they needed a ton more affordable housing, those are, it feels like the large majority of the akias that we're seeing. This was cheap construction in the 1960s, 70s. It's still cheap construction today.
Speaker: And that's why there's so many similarities between these homes. The point I just want to make is that you're not going to get that hyper precision Japanese japanese craftsmanship with many of these homes that you might be expecting. That's going to come with the older Kominka style houses. These homes were built cheap and built quickly.
Speaker: um Absolutely. And it's interesting as we looked at so many listings, the pieces are starting to come together more. We're like, oh, that's a Daiwa house. We're like, oh, that's a Seki Sui house. And we're starting to see those trends. And with that, we're also understanding like how they're made. We're not sure who manufactured our house, but we're understanding Japanese construction. Again, as we've gone through the construction, just want to emphasize these houses were made cheap, but they are still a good deal. And we're sitting in Jisouji Lux right now. and This place is going to be pitching. Yeah. Very, very happy with it again. um Nothing against these homes. Maybe your floor might be tilted is like only the one of the things I'm saying. You can get your contractor to fix that, but yeah, I would just say insulate the walls. Okay. Number 10 insight. Jerry, I'm going to go off script a little bit on this one, but as we are here in Beppu.
Speaker: we Yesterday, actually, we were driving out. It's a holiday and in Japan. And Pepu is so crowded. And we see some of these cities that we think are maybe bad investments or don't make sense. But it's really good to see how bustling some of these areas are. So there is still a ton of opportunity in Japan, not just in Tokyo or Kyoto.
Speaker: take a look at Batboo, contact us if this is something you're interested in. But we're five, 10 minutes away from a threestar michelin three michelins -star Onsen. What is that place called? The Jikoku, the Hell Springs. A lot of tourist attractions near us. And it's just like, hit us like, holy crap. We threw a dart on the map to some degree when buying this. And we really followed our gut to purchase this place without really knowing what the returns were. But Our guts were right. There's definitely a lot of tourism demand here, buses after buses. So it's good to see that a lot of people were questioning us, like why Beppu and all these things are like, I don't know. We like hot springs, but our gut was right. Yeah. It's a long weekend here this weekend and yesterday was Sunday was yeah, pretty bustling in Beppu.
Speaker: I think this is a larger thing kind of going off the mat guys. You can do anything you want in Japan. like I would say follow your gut. A lot of people ask us, like what area should I and yeah invest in and things like that? I think as long as you like the place, I think things will work out is what I would probably say to people. As long as you like the place, I think others will like the place. And for us, we like Bepu. Maybe it wasn't the highest ah ROI investment, but we're making it work. And I think that was the best course for us.
Speaker: Yeah, completely agree. Very happy with Beppu. And even before we saw how bustling it can be on a long weekend. yeah yeah Okay, cool. So those were our 10 insights. Joey, it has been a freaking week, 10 days. I can't believe we we put so much in.
Speaker: But, and I guess maybe very last insight, it's interesting. It's a, it's really a blue ocean for us. We're, I feel like we're the only, maybe not the only ones, but nobody else is doing this hustle. I feel like to go to every prefecture, talk to these people talked about, talk about Aki has learned maybe, hopefully some people are, if you are, please contact us. But there's a lot of opportunity to disrupt here. Again, going back to Matt Guy's point, I feel like there's a lot of opportunity here for us comparatively for me in California and you in Nova Scotia.
Speaker: All right. Otzkade. Otzkade, Joey. It's been an incredible 10 days. I think we're going to go hit this new bakery next to us called Pengin Bakery, and then I'm going to go take the flight out. All right. Otzkade.
