The property path less traveled
If your plans for buying property in Japan have been put on hold because of the recent economic downturn, don’t abandon your dream of owning a piece of Japan just yet. There is a little-known route to acquiring property in Japan at unbelievably low prices—through the Japanese foreclosure auctions.
All kinds of properties emerge at these auctions, and as little as ¥5 million can land you a ski chalet, beach house or traditional Japanese country home. In some places, you can even land a small hotel or apartment building (yes, an entire building). If you don’t know where to safely put your cash these days, you may want to take a hard look at investment properties. Office, retail and warehouse space might fit into your company’s start-up or expansion plans. And, of course, there are scores of properties that could be your home and land out there where you could build your own house.
Traditionally, the majority of the bidders at these auctions have been local real estate companies who then re-sell the properties at a handsome profit. Many of these companies have found themselves in financial straits as of late, and there are now fewer bidders, resulting in even lower sale prices.
There are, however, a few drawbacks to foreclosure purchases. Financing is basically unobtainable, so cash is required. If you are looking for something specific, or if you only bid extremely low on only the best properties, it could take you some time to find a property. Before you let your eyes pop out at the prices of the lowest-end stuff on offer, keep in mind the cheapest stuff tends to be cheap for a reason. It pays to do your research as there may be issues with the property you need to discuss or fully understand before putting in a bid.
That being said, it is not out of the ordinary to get 25-75% off of market value. If you do not speak any Japanese, consultation services are available in English with a quick Google search. So, don’t give up your homeowner dreams in Japan; just dig a bit deeper into the foreclosure market, and you may be surprised what you unearth.