FAQ
Frequently Asked Questions
QUESTIONS
Properties and buildings
Here we have gathered the questions our clients ask most often.
Please do not hesitate to contact us about anything not covered here.
I hear that Japan has many earthquakes. Is the earthquake resistance of buildings a concern?
Japan's Building Standards Act has been reviewed after each major earthquake.
The most important date is 1 June 1981: buildings that received building confirmation on or after that date
are subject to the "new earthquake-resistance standard".
The new standard is designed so that a building will not collapse in a major earthquake of roughly seismic intensity 6-plus to 7. Surveys of the damage caused by past earthquakes have confirmed a clear difference in the extent of damage between buildings under the old standard and those under the new standard.
As a rule we introduce properties meeting the new earthquake-resistance standard for investment purposes. Please note that the test is the date on which building confirmation was received, not the building's age. Even if completion was in or after June 1981, a building whose confirmation predates that date is an old-standard building.
The new standard is designed so that a building will not collapse in a major earthquake of roughly seismic intensity 6-plus to 7. Surveys of the damage caused by past earthquakes have confirmed a clear difference in the extent of damage between buildings under the old standard and those under the new standard.
As a rule we introduce properties meeting the new earthquake-resistance standard for investment purposes. Please note that the test is the date on which building confirmation was received, not the building's age. Even if completion was in or after June 1981, a building whose confirmation predates that date is an old-standard building.
What type of property do you recommend?
Where the purpose is investment, we mainly introduce secondhand units designed for single occupants
(studio and 1K units).
The capital region has a high proportion of single-person households, so rental demand for these units is less exposed to market swings and tends to translate into stable income. Because the acquisition price per unit is also contained, the same budget can be split across several properties, spreading your risk.
Of course, depending on your budget and objective, a family-sized unit or a whole building may be more suitable. We will make a proposal once we understand what you are looking for.
The capital region has a high proportion of single-person households, so rental demand for these units is less exposed to market swings and tends to translate into stable income. Because the acquisition price per unit is also contained, the same budget can be split across several properties, spreading your risk.
Of course, depending on your budget and objective, a family-sized unit or a whole building may be more suitable. We will make a proposal once we understand what you are looking for.
In concrete terms, what difference does the age of a building make?
Even among secondhand properties, construction and specifications differ according to the period in which
the building was built. The main differences are set out below. Each has its merits,
so please consider them in the light of your own investment plan.
| Pipework | Newer buildings increasingly use resin piping laid above the floor slab. This is easier to replace or repair and keeps costs down. In older buildings the pipes may be embedded in the concrete, which can make renewal a major undertaking. |
|---|---|
| Bathroom and toilet | In newer buildings, layouts with a separate bathroom and toilet are the norm and tend to be more popular with tenants. In older buildings the combined type (unit bath) is common. |
| Floors and ceilings | Many newer buildings use raised floors and suspended ceilings, a structure that makes renewing pipework and wiring, and carrying out renovations, easier. |
| Earthquake resistance | Buildings that received building confirmation on or after 1 June 1981 are subject to the new earthquake-resistance standard, which raises their safety in a major earthquake. |
| Acquisition price and yield | The older the building, the lower the acquisition price tends to be and the higher the gross yield. On the other hand, repair costs are more likely to arise and loan terms tend to be shorter. Please judge on more than the headline yield, taking the outlook for repairs into account as well. |
In an older property, which fixtures are most likely to fail?
Air conditioners, water heaters, water supply and drainage pipes, and the fittings around the bathroom
are the parts that most often need replacing as a building ages.
When viewing a property, please always check the installation year and working condition of these items.
In the case of a sectional-ownership condominium, it is also important to look beyond the fixtures within the unit itself: when the management association last carried out major repair works, when the next works are scheduled, and whether the repair reserve fund has been built up sufficiently. We provide these documents to you as well.
In the case of a sectional-ownership condominium, it is also important to look beyond the fixtures within the unit itself: when the management association last carried out major repair works, when the next works are scheduled, and whether the repair reserve fund has been built up sufficiently. We provide these documents to you as well.
What should I look for in choosing a unit that will let well over the long term?
The fittings and layouts that tenants look for change over time.
What matters is not only whether a property is popular now, but whether it has the qualities
that will continue to be accepted over the long term.
In practice this means the distance from the nearest station, sunlight and orientation, the amount of storage, whether the bathroom and toilet are separate, the internet connection, whether there is a delivery box, and so on. We explain these points having first compared the property with competing units currently being marketed nearby.
In practice this means the distance from the nearest station, sunlight and orientation, the amount of storage, whether the bathroom and toilet are separate, the internet connection, whether there is a delivery box, and so on. We explain these points having first compared the property with competing units currently being marketed nearby.
CONTRACT
Transactions and contracts
Can a foreign national buy real estate in Japan?
Yes. Japan places no restrictions based on nationality or status of residence on the acquisition of real estate.
Even if you do not live in Japan, you can acquire ownership of land and buildings in your own name
and register it at the Legal Affairs Bureau.
Ownership is not subject to any time limit.
Financing from a financial institution is another matter: the terms differ according to your status of residence, your income in Japan and your record of residence in Japan, and some institutions do not lend to non-residents. If you are considering financing, please consult us before you begin looking for a property.
Financing from a financial institution is another matter: the terms differ according to your status of residence, your income in Japan and your record of residence in Japan, and some institutions do not lend to non-residents. If you are considering financing, please consult us before you begin looking for a property.
What is the difference between buying from you as seller and buying through you as broker?
A transaction in which we are the seller and a brokered transaction in which we stand between the seller and the buyer
differ in the scope of liability and in the costs involved. The main differences are as follows.
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| Item | Where we are the seller | Where we act as broker |
|---|---|---|
| Liability for non-conformity with the contract (formerly warranty against defects) |
A period of two years or more from handover is stipulated. We also deal with equipment failures, repairs and, within the scope of that liability, replacements. |
Where the seller is an individual, a period of around three months is usually stipulated. The scope may also be limited to matters such as termite damage, rot in timber and drainage pipe failures. |
| Brokerage commission | None payable. |
Where the sale price exceeds 4 million yen, the cap is "sale price × 3% ＋ 60,000 yen" plus consumption tax. |
| Cooling-off |
Applies. Limited to applications made somewhere other than our office. |
Does not apply where the seller is not a licensed real estate broker. |
| Languages | Japanese, Chinese, English and Korean | |
* The period and scope of liability for non-conformity with the contract depend on the terms of the individual sale and purchase agreement. Before signing, please always check the explanation of important matters and the contents of the contract.
How long does it take from the purchase application to handover?
Roughly one month is the usual guide.
The period varies with the loan assessment period, the condition of the property and the scheduling agreed with the seller.
The procedure is explained in detail on the Investment Process page.
The procedure is explained in detail on the Investment Process page.
What are the distinctive features of Japanese lease agreements?
As an owner operating a property, it is important to understand the nature of Japanese lease agreements.
The main features are as follows.
- The contract term is normally two years.
- Under an ordinary lease, the contract is as a rule renewed even when the term expires. For the lessor to refuse renewal or give notice of termination, "just cause" is required, and in practice a reason such as "I want to use it myself" is unlikely on its own to be accepted.
- Even as lessor, you may not enter the unit without the tenant's consent.
- A tenant who gives notice of termination in accordance with the notice period set in the contract (normally one month) can generally move out without penalty, even part-way through the term.
- If you wish to be certain that the contract ends on expiry of the term, a fixed-term lease is an alternative. Because it affects rent levels and tenant recruitment, however, please discuss with us case by case whether to adopt one.
Can I operate the property while continuing to live overseas?
Yes. We take on tenant recruitment, screening and contracting, rent collection and remittance to your overseas account,
attendance at move-in and move-out, and the arrangement of repairs.
Note, however, that to file a final tax return in Japan you must appoint a "tax agent" and notify the tax office. We can introduce you to a tax accountant we work with, so please raise this with us at the same time.
Note, however, that to file a final tax return in Japan you must appoint a "tax agent" and notify the tax office. We can introduce you to a tax accountant we work with, so please raise this with us at the same time.
RENTAL
Rental customs and costs
The commercial customs surrounding renting a home in Japan differ from those of other countries in a number of respects.
They are relevant both when you rent a property yourself and when you let one as an owner.
What are key money and the security deposit? Can they be avoided?
Both are lump sums paid on moving in, but they are entirely different in nature.
The security deposit (shikikin) is in the nature of a guarantee, typically one to two months' rent. The condition of the unit is checked on move-out, and the balance is returned after deducting the cost of repairing any damage for which the tenant is responsible.
Key money (reikin) is a lump sum paid to the lessor and is not returned. It is typically one to two months' rent, and tends to be set higher for more attractive properties. It is said to serve to encourage tenants to stay longer and to reduce turnover.
The amounts are set property by property, and there are many properties for which neither key money nor a deposit is required. If you want to keep your initial costs down, look for properties where these are not charged.
The security deposit (shikikin) is in the nature of a guarantee, typically one to two months' rent. The condition of the unit is checked on move-out, and the balance is returned after deducting the cost of repairing any damage for which the tenant is responsible.
Key money (reikin) is a lump sum paid to the lessor and is not returned. It is typically one to two months' rent, and tends to be set higher for more attractive properties. It is said to serve to encourage tenants to stay longer and to reduce turnover.
The amounts are set property by property, and there are many properties for which neither key money nor a deposit is required. If you want to keep your initial costs down, look for properties where these are not charged.
How much is the brokerage commission?
For a rental, the cap is one month's rent plus consumption tax.
Some properties are offered at half that, or with no commission at all.
For a purchase, where the sale price exceeds 4 million yen the cap is "sale price × 3% ＋ 60,000 yen" plus consumption tax. No brokerage commission is payable on properties for which we are the seller.
In both cases these are the caps set by the Real Estate Brokerage Act, and the amount actually charged differs between the real estate companies you engage.
For a purchase, where the sale price exceeds 4 million yen the cap is "sale price × 3% ＋ 60,000 yen" plus consumption tax. No brokerage commission is payable on properties for which we are the seller.
In both cases these are the caps set by the Real Estate Brokerage Act, and the amount actually charged differs between the real estate companies you engage.
If I have no joint guarantor, am I unable to rent a property?
You can still rent. In the past, a joint guarantor in Japan was required,
which was a significant barrier for foreign nationals who had only recently arrived.
Today the practice of using a rent guarantee company in place of a guarantor is widespread,
and for most properties you can sign a contract without a guarantor.
Where a guarantee company is used, an initial guarantee commission (a set percentage of the rent) and a further guarantee fee each year or on each renewal are payable separately. Costs are higher, but you gain the advantage of being able to contract without imposing on family or friends.
Where a guarantee company is used, an initial guarantee commission (a set percentage of the rent) and a further guarantee fee each year or on each renewal are payable separately. Costs are higher, but you gain the advantage of being able to contract without imposing on family or friends.
Besides rent, key money and the deposit, what other costs are there?
- Management fee and common area charges (paid monthly together with the rent)
- Cleaning of the unit on move-in
- Lock replacement (if you request it, or where the property requires it)
- Fire insurance premium (taking out cover is generally a condition of the contract)
- The guarantee commission where a guarantee company is used
- Restoration costs on move-out (deducted from the security deposit)
What costs arise while I hold the property as an owner?
The management fee and repair reserve fund, the rental management fee, fixed asset tax and city planning tax,
the fire insurance premium, and the restoration costs and advertising fees arising on a change of tenant
are all incurred on a continuing basis.
For details, please see the Taxes & Costs page. How to model income and expenditure is explained on the Investment Process page.
For details, please see the Taxes & Costs page. How to model income and expenditure is explained on the Investment Process page.
GLOSSARY
Glossary
The Japanese terms most often used in floor plans and contracts, set alongside their Chinese and English equivalents.
We hope you will find it useful when reading property documents.
Notation commonly seen in floor plans
| 玄関 | 玄关Entrance |
|---|---|
| 下足入 | 鞋柜Shoes Closet |
| 廊下 | 走廊Hall / Corridor |
| 収納 | 储藏间Storage |
| 洋室 | 洋式房间Western-style Room |
| 和室 | 日式房间Japanese-style Room |
| 押入 | 壁橱Closet |
| クローゼット | 衣橱Closet |
| ウォークインクローゼット／WIC | 更衣间Walk-in Closet |
| トイレ／WC | 厕所Toilet / Water Closet |
| 洗面室 | 盥洗室Powder Room |
| 浴室／UB | 浴室Bathroom / Unit Bath |
| 洗／W | 洗衣机放置处Washer |
| 冷／R | 冰箱放置处Refrigerator |
| バルコニー | 阳台Balcony / Terrace |
| MB | 水电燃气表箱Meter Box |
| PS | 管道间Pipe Space |
| LDK | 客厅・餐厅・厨房Living / Dining / Kitchen |
Terms relating to sale and purchase
| 売買 | 买卖Purchase and Sale |
|---|---|
| 不動産 | 不动产Real Estate |
| 購入申込書 | 购房申请书Application to Purchase a Property |
| 価格 | 价格Price |
| 成約 | 成交Contracted |
| 契約 | 合同Agreement / Contract |
| 不動産売買契約書 | 不动产买卖合同书Purchase and Sale Agreement of Real Estate |
| 資産の名義人 | 资产名义人Titleholder of the Property |
| 契約不適合責任 （旧・瑕疵担保責任） | 合同不符责任（旧称：瑕疵担保责任）Liability for Non-conformity with the Contract (formerly Warranty against Defects) |
| 重要事項説明 | 重要事项说明Explanation of Important Matters |
| 宅地建物取引士 | 房地产交易士Licensed Real Estate Broker |
| 委任状 | 委托书Power of Attorney |
| 代理人 | 代理人Proxy / Agent |
| 司法書士 | 司法书士Judicial Scrivener |
| 書類 | 文件Document |
| 印鑑証明 | 印章证明Certificate of Registered Personal Seal |
| 実印 | 实印Registered Personal Seal |
| 手付金 | 定金Down Payment / Earnest Money |
| 違約金 | 违约金Penalty |
| 小切手 | 支票Check |
| 預り証 | 收据Deposit Receipt |
| 残金 | 余款Remaining Balance |
| 共益費 | 公共服务费Management Fee |
| 修繕積立金 | 修缮公积金Reserve Fund for Building Repairs |
| 管理規約書 | 管理规约By-laws of Home Owners' Association |
| 付帯設備 | 附带设备Equipment and Fixtures |
| 保証書 | 保修书Warranty |
| 説明書 | 说明书User's Manual |
| 境界確認書 | 界线确认书Statement of Confirmation of Property Borderlines |
| 土地測量図 | 土地测量图Land Survey Drawing |
| 検査済証 | 竣工检查合格证Certificate of Completion |
Terms relating to tax and registration
| 登記申請 | 登记申请Application for Registration of Title |
|---|---|
| 登記費用 | 登记费用Registration Fee |
| 登録免許税 | 登录许可税Registration and License Tax |
| 不動産取得税 | 不动产取得税Real Property Acquisition Tax |
| 消費税 | 消费税Consumption Tax |
| 地方消費税 | 地方消费税Local Consumption Tax |
| 固定資産税 | 固定资产税Fixed Property Tax |
| 都市計画税 | 城市规划税City Planning Tax |
| 所得税 | 所得税Income Tax |
| 印紙代 | 印花税Revenue Stamp Fee |
| 住民税 | 居民税Residents Tax |
| 住民票 | 居民票Certificate of Residence |
| 譲渡益 | 转让收益Capital Gain |
| 譲渡益にかかる税金 | 转让所得税Capital Gain Tax |
| 抵当権 | 抵押权Mortgage |
| 抵当権者 | 抵押权人Mortgagee / Lienholder |
| ローン諸費用 | 贷款各项费用Loan Fees |
| ローン完済費用 | 提前还清贷款的费用Loan Closing Fee |
Terms relating to investment and letting
| 賃料／家賃 | 租金Rent |
|---|---|
| テナント | 租客／承租人Tenant |
| 礼金 | 礼金（不返还的一次性谢礼）Key Money |
| 敷金 | 押金Security Deposit |
| 保証人 | 保证人Guarantor |
| 家賃債務保証会社 | 房租担保公司Rent Guarantee Company |
| 投資 | 投资Investment |
| 投資利回り | 投资回报率Investment Yield |
| 表面利回り | 表面回报率Gross Yield |
| 実質利回り | 实际回报率Net Yield |
| 空室率 | 空置率Vacancy Rate |
| 原状回復 | 恢复原状Restoration to Original Condition |
| 建築確認済証 | 建筑确认证书Certificate of Building Confirmation |
| 建物解体費用 | 建筑物拆除费用Demolition Cost |
| 引渡し | 交付Delivery / Handover |
| 不動産引渡確認証 | 不动产交付确认书Confirmation of Property Transfer |
| 権利書 （登記識別情報） | 产权证书Property Title Deed |
| 書類手続き費用 | 文件手续费Document Fees |
* These translations are provided as a reference when reading property documents. For legal terms, the original Japanese text set out in the contract is the authoritative version. If anything is unclear, please be sure to confirm it before signing.
If your question is not answered here, please ask us directly
One of our team will respond. In addition to Japanese, we can assist you in Chinese, English and Korean.
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