How I lived in Setagaya Tokyo with free rental for 5 Years
There was an event that I bought a mansion room in Tokyo and lived for almost 5 years, then resell even at a little profit, make me 5 years free living in a brand new mansion in Setagaya totally for free.
The the real estate market in Japan in 2010s is a bit boring, no appreciation for asset prices, average rental income is 9% or less of investment. How do I make it? I just follow a few rules that I discover during my 3 years of property search.
Yes, it take 3 years. For some it might take within a few days or weeks to search and decide, but for me my saving and working has thought me how difficult to earn money, and so do I have to caution on investment, and passed all my concern. I hope my tips will save your time and get a better one.
I did not attend any training or read any book of how to. All I learnt during my journey search for property that going to call “My Home”.
My search begin with tired to search for rental apartment, move in — get bored — move out.
At first, I was looking for 2nd hand mansion, cause in TV talk show or newspaper or colleage used to say “buying 2nd hand is a good deal”. After looking about 10 rooms, I feel that not that much good deal compare to brand new one.
I did my research in 3 steps. First from the internet and check the information. Lucky that information are available on property portal that make searchable by location/train station/budget/floor area/features and do many comparison, developer website that list all property they developed, and even property specific website. Internet research filter out many, some spec you don’t favour. For example, how many minutes from station, because have to walk to take public transport, where in Tokyo car parking fee is not realistic for daily commute.
Second step search is ask for documents of property, they will send mostly via post a few in email, the complete nicely printed catalog. They are informative with drawing, maps showing neighborhood, illustration and imaginary visualization.
The last and important steps of my search is go and see the real room, walk in, open every doors, sit and use the facility just like you are living there. Seeing the real thing and touching usually differ from photos. All new mansion have model rooms properly setup before the construction start, some already completed projects, model room are part of the actual rooms. For 2nd hand property, there were two types, the owner still there or the owner has moved out.
One point of onsite visit is, you can interact with sales staff. Don’t just listen to what they pitch, but try to ask questions, ask why people buy from them, try to get insights from the communication.
I prefer visiting the real site, than the model room, so end up looking for already finished projects in my last year of search. My wife plays a good partner in checking process and thus make me visited almost 50 different property during my search, even I check the room 2nd time, that may not closed to decision.
During my internet and on paper research steps, the property has information such as how many minutes to which supermarkets, shopping street, clinics, hospital, school, ATM, station, bus stand, theather, etc. I like it, and I put in my one point of comparision.
The Japanese word we used to say is 利便性, which direct meaning is “convenience”, but I think better to express as environmental values that let us interact with community and our lifestyle. This is one important point to choose to match one’s lifestyle Convenience.
For me, I prefer established pace than new town, because there are shopping streets with quite variety of small business with local delights. I prefer not closed to station, because the noise level from train operation hours, and same to not next to highway, to avoid the tire scratching noise.
Location is everything at the time when you are reselling it. This is the value buyer concern a lot. People want a nice place to live, better community, easy to access, and thus a good location.
That location happen to be well-known for residential to movie celebrities and politicians, and so does fashionable. It is home to cartoon character sazae-san, Godzilla producer Toho Studio, Tamura Masakazu, Matsuda Seiko, and many talents. It aslo closed to place that young generation like, Shimokitazawa station area, Sakura shinmachi station.
Good location mean, the place should have wow effect. How many wow you hear from people whenever you reply their question on “Where do you live?”
Solid Land, Old town
One old friend who live in his own 3 story building near a station, he himself made secondary income from a few apartment he bought, teach me to choose land that exist long ago. The point is to identify is there any temple nearby, because a few hundred years ago temple (like church or mosque) were build at solid land like hill or high land in order to make it long lasting.
That proof the place exist long ago, and not freshly made land that might risk from natural diseaster.
When 2011 Tōhoku earthquake and tsunami occurred, I was on sickleave thus in living room with family, I feel the earthquake and saw hanging wall lamp swinging, but just think earthquake as usual. During the year I got to learn that how important the sea level, liquefaction and hardness of land. Never risk at a freshly born manmade land.
Building Quality Standard
During the many visits to showrooms and listening many explanations, I notice a few words from some salesman repeatedly. I usually ask them to explain more, so I can use to ask in next property. how smart :)
One word was “earthquake proof standards”, and the building association has a test to issue certificate of which level this building passed. The property I choose got certified, and they also have record of all inspection during construction like concrete foundation test, plumper works, electricity works, etc. If your mansion certified the quality standard, that is one big point to show to next buyer.
Developer, Architect design
During my journal of search, I don’t really focus on big brand developer, because I don’t think it matter, and also I really don’t know who is who. But reading some REIT reports and industry map (日経業界地図) I got to know who is who in developer world, in construction industry, and in property sales.
When doing my tens of onsite visits, I got to feel the works of developers and the art & stories architect put in, and I even notice their signature design. One example is when you look outside across the big glass door from living room, does the balcony beam crossing your eye sights? It counts.
Then I end up choosing a property in Setagaya, stylish medium rise 5 building circling a center garden where the whole compound is more than 10,000 square meter, 3LDK type, with common facilites such as kids room filled with toys, party room with cooking facility, reservation based hotel quality guest room, sound system equipped mini theater, drop out area, sakura garden and whatever the mansion are trendy at that time.
Best of all, as the title has mentioned, after living almost 5 years and when I resell I got appreciation that pay off my moving expense, property transaction tax, agent fee, and still got about $10,000 left in hand.
disclaimer: I am not a real estate expert, nor I am trained professional in this field. This is NOT an advise, Please don’t except that it will work in any instances. You should consider getting professional service and do proper research on buying property.