RetireJapan

Hi All,
I have read through the forum and found it very useful.
I got my PR recently and decided that its time that I buy my own house/mansion in Tokyo.

I am of an Indian origin and lived in Kasai Station area for around 6yrs. I have come across a new construction near Nishi-kasai station. https://nskre.jp/nishikasai/
The cost of the flat that I am interested is around 62 million yen (72 square meter)and I will have to pay additional per month of 34000 yen for (parking, maintenance,internet fee,reserve fund fee)

Considering the EMI for loan and additional payment, my total monthly outgo would be around 200000 yen.
Currently I am paying around 150000 yen per month as my rent + maintenance.

My thoughts for buying this manshion are :
1. If I leave japan early, than I can put the house on rent (expect: around 130k rent considering current rents in the area)
2. Or sell it probably at same price but atleast I would have saved on rent.


Kindly advice, if I should proceed with above deal or cost of the manshion is too high for the area?
Also, what would be future tentative property tax that I have to pay?[/b][/b]

Welcome to the forum!

A few quick thoughts:

-whether this is a good idea is probably going to depend on your income
-paying 200,000 yen a month for a property you can rent for 130,000 yen a month sounds less than ideal
-if you have a residential mortgage you probably will not be allowed to rent out the property

Anyone else?

I have no comment about the cost of the place compared to the market price for the location. You can have a look at what similar apartments go for in the area by browsing the ads at the real estate agents. I doubt that anyone on the forum is an expert on Nishikasai real estate market so you will be better served doing your research by browsing recent deals.

You seem to want to buy a new mansion. They usually come at a premium and depreciate faster than older buildings. The maintenance costs might also be artificially lowered to attract buyers and might rise in the future. You have to do your due diligence and compare to other options in the area you are targeting. I would be doubly cautious if it is a tower mansion (cf. posts from "cat forehead" blog on the Monday read).
I am of the opinion that used mansions are likely to be better deal but in some prime location you do not have the luxury of the choice.

How does 200K compare to your take home revenue? You do not want to buy more "house" than you can afford and be what is called "house poor". Do you also have room in your budget for an increase in fees or unexpected maintenance?

RetireJapan wrote: ↑Wed Jan 15, 2020 10:56 pm Welcome to the forum!

A few quick thoughts:

-whether this is a good idea is probably going to depend on your income
-paying 200,000 yen a month for a property you can rent for 130,000 yen a month sounds less than ideal
-if you have a residential mortgage you probably will not be allowed to rent out the property

Anyone else?

Hi Ben/Petronius,
Thanks for quick response. I have provided more details about myself so that it addresses few of the question raised by you.
A quick rundown about me.
- We are family of 3 (wife is non-japanese and kindergarten going kid). No financial liabilities at the moment here or in home country.
- 200k would be about 30% of my take home salary.
- My Japanese skills are limited, so doing all of manual checks for 2nd hand house would be difficult for me.
- As of now I dont have plans to return to my home country anytime soon.
- I have a house in my home country so if I return back, I am looking for a rental income from a property in Japan(hopefully to supplement retirement income.)

Reasons behind buying a new manshion:
- Good quality Old manshion's (20+ yrs) are priced around 40-50 million + parking & maintenance.
- Buying an old house and then renovating it would probably cost same in this area.

Following additional expenditure, I am not sure about.
- How much maintenance will increase? Anyway to check that before hand?
- Property taxes? Not sure, how much monthly outgo would be there. Any way to check on it?
- Any other taxes/expenditure that I should consider?


Kindly share your thoughts and advice based on above details.

You will pay property taxes on it. How much I'm not entirely sure.

From https://www.globalpropertyguide.com/Asi ... -and-Costs

Property Tax
Municipal tax is levied at 1.4% on the assessed value of the land or building. For land used for a residential purpose, one third of the assessed value is excluded from taxation. For residential land up to 200 square meters, one sixth of the assessed value is deducted from the taxable amount.

To be excluded from property tax, the assessed value of the land must be not more than JPY300,000 (US$2,752), whereas for a house, the threshold is JPY200,000 (US$1,835).

Expect the assessed value to be less than the real value but it's still a significant cost.

Other expenditures:

You will get a tax return of up to 1% of the remaining balance on your home loan, so that is a + for home ownership.

There are significant one-time fees involved in making the purchase: agent fees as well as stamp fees and fees on the loan itself.

As a general guideline, with homes in japan you should expect to live in them 5-10 years before they become cheaper than renting(because of the buying/selling expenses, taxes etc). With new homes in particularly this will probably be close to the 10 year end.

So really, you should be planning not only to stay in japan for at least 10ish years, but probably also be happy to stay in kasai(so if your workplace moves, you may have a long commute if you can't move). It affects your mobility, but can give your kid stability. It's a tough choice to make that has pros and cons.

Hi All,
Thanks a lot all of your for your feedback.

akizoid wrote: ↑Thu Jan 16, 2020 6:15 am - How much maintenance will increase? Anyway to check that before hand?

Usually if you are a serious buyer, they will give you a document that shows precisely the plan for the maintenance costs for the next 20 years or so. If I recall correctly, this increases pretty fast to surprising amounts, as the building gets older, maintenance costs are supposed to go up. Also as Petronius mentioned, they lure prospective buyers with a lower maintenance cost in the early years. Not that 34'000 looks specifically cheap to me, for what it's worth (when I used to own a condo, the first few years it was 20'000. But we didn't have a parking spot, that might be why).

There are significant one-time fees involved in making the purchase: agent fees as well as stamp fees and fees on the loan itself.

For our new home, when all was said and done, fees and additional (not directly related to the house) construction costs represented about 10% of the total cost.


Also see here for another topic regarding "how much mortgage": viewtopic.php?f=7&t=792