Examples of Investment Property in Sapporo for Sale

To help investors that want to buy Hokkaido investment property, this article will show some income-generating rental properties that are for sale in Sapporo. By showing actual examples, investors can gain a general sense for the types of property available for investment in Sapporo, as well as some specific examples of the cost and quality of those investments.

When you are ready to find a local agent that specializes in real estate investment in Hokkaido, contact us for more information.

Six Examples of Property for Investment in Sapporo

* Example #1: Low-cost 1LDK Condominium for Investment as a Rental
* Example #2: Perfect Location 1LDK Condominium for Investment as a Rental
* Example #3: Class C Neighborhood 3LDK Detached Home for Investment
* Example #4: Class B Neighborhood 3LDK Single Family Home for Investment
* Example #5: Seven-unit Apartment Building for Sale as an Investment
* Example #6: 10-Unit Apartment Building for Sale as an Investment
— Why Focus on Specific Examples of Sapporo Real Estate Investments?
— How We Choose The Properties in This Assessment
— Online Listings for Investment Property in Hokkaido
— Investment Properties Listed Online Tend to Have Lower Returns
— Investments with the Highest Returns are Sold Off-market
— Real Estate Brokers that Specialize in Investment Property in Hokkaido

 
Let’s get into some specific examples:
 

Example #1: 1LDK Condominium for Investment as a Rental

— Investment Category: Single condominium unit as a rental property in Sapporo
— Size: 36.94m²
— Year Built: 1981
— Price: 8,500,000 JPY
— Annual Rental Income: 600,000 JPY
— Rental Yield: 7.05%
— Price per Square Meter: 230,103 JPY

This property is a 1LDK (one bedroom) condominium unit; a good example of condominium for investment in Sapporo. The unit generates income from rent; the rental income is 600,000 JPY per year, or 50,000 JPY per month. That monthly rental rate is relatively low monthly rent for a central location, especially for a unit so close to a train station. The investment rental yield is 7.05%.

Notes on the investment: The unit is located very close to the Shin-Kotoni Station, offering a convenient two-minute walk to the JR Line (nice on snowy days), or an eight-minute walk to Asabu Station. The building is older, and not particularly attractive. It is directly adjacent to the train line (trains can likely be heard/felt from the unit). There is no landscaping. There is a funeral parlor adjacent to the property. The property may be relatively easy to rent, due to it’s location and low rent., despite being unattractive.

This looks to be a class “C” opportunity in class “B” or “C” neighborhood.

Example #2: Perfect Location 1LDK Condominium for Investment as a Rental

— Investment Category: Single condominium unit as a rental property in Sapporo
— Size: 34.1m²
— Year Built: 1982
— Price: 12,500,000 JPY
— Annual Rental Income: 855,600 JPY
— Rental Yield: 6.84%
— Price per Square Meter: 366,569 JPY

Like the example above, this is another 1LDK condominium in a large building (60 units); another example of investment property condominium in Sapporo. The unit generates investment income from rent; the rent for this unit is 855,600 JPY per year, or 71,000 JPY per month. For a one-bedroom, small unit, that rent is relatively high. The rental yield is 6.84%.

Notes on the investment: This unit is in an older building, but the building appears to be in very good condition. The rental unit is located directly across from the southeast corner of Hokkaido University, and just a few minutes walk from Sapporo Station. Depending on the interior, this unit would be very easy to rent, and based on the location should remain in demand for the foreseeable future. Of the six properties we review here, this unit had the highest cost per square meter (but not the lowest returns on cash invested).

An objectively nice building and location. A “B” class opportunity in an “A” or “B” neighborhood.

Example #3: Class C Neighborhood 3LDK Detached Home for Investment

— Investment Category: Detached house rental property in Sapporo
— Size: 100.19m²
— Year Built: 2008
— Price: 18,300,000 JPY
— Annual Rental Income: 1,200,000 JPY
— Rental Yield: 6.55%
— Price per Square Meter: 182,653 JPY

This is an example of a 3LDK free-standing house, ikodate, or single-family home for investment in Sapporo; it is a good example of Sapporo detached home rental property for sale. This unit generates investment returns from rent; the rent for this unit is 1,200,000 JPY per year, or 100,000 JPY per month. For a three-bedroom home, the rent is in an acceptable range for this part of the Sapporo City.

Notes on the investment: Of the six properties in this analysis, this is the least central (on the northern edge of Sapporo). This home is about 25 minutes from Sapporo Station by car, and about 34 minutes if taking public transportation – including a twenty-minute walk to the nearest station (JR Line), or a two-minute walk for bus service. The home is simple, and in good condition. It is next to home that is occupied, but looks almost abandoned. The home is located behind a gas station; you could smell gasoline while standing in front of the property.

This is a class B building in a class C neighborhood. It is not central or convenient. While the rental income is relatively high, it may be difficult to rent due to its distance from the city center and unappealing surroundings.

Example #4: Class B Neighborhood 3LDK Single Family Home for Investment

— Investment Category: Single-family home rental property in Sapporo
— Size: 129.74m²
— Year Built: 2005
— Price: ¥27,800,000 JPY
— Annual Rental Income: 1,200,000 JPY
— Rental Yield: 4.31%
— Price per Square Meter: 214,275 JPY

Here we have another 3LDK detached home to be used as a rental property in Sapporo. This Sapporo single family home can create cash flow for an investor from rent; the rental income for this unit is 1,200,000 JPY per year, or 100,000 per month. With three bedrooms, a relatively large size, and an attractive neighborhood, the rent may be at or even below market value (this unit could possibly rent for more).

Notes on the investment: This home is simple, done in a typical “minimal” Hokkaido architecture, but is reasonably nice by local standards. The neighborhood is clean, feels like a real community; the neighborhood feels welcoming. There is a school within walking distance. The home is also only a four-minute walk from the Namboku line (providing easy access to downtown). The yield is low, which may be an indication that rent is too low, the price is too high, or both. Of the investments listed here, this is one of the nicest properties, but has the lowest return.

This is a class B home in an attractive class B community. Looks like a nice place to live or invest (if the returns were higher). At the current price, as an investment, this home may be difficult to sell (which may be why it’s listed online).

Example #5: Seven-unit Apartment Building for Sale as an Investment

— Investment Category: Apartment building rental property in Sapporo
— Size: 390.08m²
— Year Built: 1993
— Price: 75,000,000 JPY
— Annual Rental Income: 6,002,000 JPY
— Rental Yield: 8.0%
— Price per Square Meter: 192,268

This example is the first of two apartment building rental properties for sale in Sapporo. This Sapporo multi-family rental property generates income from rent from seven apartments located in one building; the annual rental income is 6,002,000 JPY, or 500,000 per month. The units are not all the same size, but the average rent across all units is 71,400 JPY per month – which may be about average given the location and the quality.

Notes on the investment: This is an attractive building, on a relatively quiet street just off of a major street, in a central neighborhood. The building looks to be in good condition. The seven units are not all the same size; each unit ranging from 30.87m² ～ 81m². There are several private garage spaces on the bottom floor (which is off the street). The Namboku Line is just a four-minute walk away, and about 20 minutes total travel time to Sapporo Station. The neighborhood is very walkable, relatively close to Hokkaido University (18 minutes via train, including the walking time).

This is a class B property in a class B neighborhood. Likely easy to keep rented. The building looks very well maintained and attractive. This was perhaps the most attractive investment in this review.

Example #6: 10-Unit Apartment Building for Sale as an Investment

— Investment Category: Entire apartment building rental property in Sapporo
— Size: 628.75m²
— Year Built: 1995
— Price: 77,000,000 JPY
— Annual Rental Income: 6,216,000 JPY
— Rental Yield: 8.07%
— Price per Square Meter: 122,465 JPY

This is another entire apartment rental property for sale in Sapporo, another example of an opportunity to own multi-family property that could generate rental income for a Sapporo real estate investor. The annual rent comes to 6,216,000 JPY, or 518,000 JPY per month. The size of the units is unknown, but the average rent across all 10 units is 74,000 JPY per month (which suggests they must be larger units, perhaps 2DLK, 3DLK, a mix of both?).

Notes on the investment: This real estate investment opportunity in Sapporo is actually two separate, two-story buildings on the same property, with a total of ten units. Of the investment properties we assessed, this is the largest property, with the most square meters of living space, at the best price per square meter. The units seem to be relatively big, based on the average rent of 74,000 JPY per month (despite a class C neighborhood and location). The location is relatively far from the city center, about 30 minutes by car, or 30+ minutes by public transportation. The buildings are located in a mixed-use neighborhood, with some industrial looking properties interspersed with housing. The property looks adequately maintained, but not an attractive complex; the architecture is minimal, materials look strictly functional, buildings are surrounded by an old asphalt parking lot with no landscaping. The neighborhood looks safe, but not particularly comfortable or convenient.

This looks to be a class C building in a class C neighborhood. The large size of the units may compensate for a lack of comfort or the low visual appeal of the property. These unit may be more difficult to rent versus more attractive, or convenient property.

Why Focus on Specific Examples of Investment Real Estate

When investors consider buying real estate in Hokkaido for investment, they often begin with the same questions: What is the return on investment? What is the purchase price? The answers to those questions always depend on the location of the property, the type of property (single condo unit, single family home, multi-family investment property, etc), the age of construction, the quality of construction, etc.

In this article we have reviewed six specific Sapporo properties for investment, all from one location, across three types of Hokkaido real estate investments. These examples provide some exact numbers for investors, can serve begin to set some expectations and to educate potential buyers of rental property in Hokkaido, and can prepare investors for what they might see when they work with a local broker for their own purchase.

There are much better real estate investments available in Sapporo. To see better property, plan to work with a local Hokkaido real estate broker. For an introduction, contact us.

How We Choose the Properties in This Assessment

This analysis uses specific examples of available rental investments in Sapporo to help investors understand the market, prices, and returns.

All of the properties in this analysis are examples are investment property in Kita-ku, Sapporo. Choosing Kita-ku was a conscious decision. We intentionally only included investments from one of Sapporo’s wards, to show a range of prices and opportunities within the same part of the city. We chose Kita-ku because it is a central, excellent location, but it is not Chuo-ku. Chuo-ku is more unique, more central, and much higher priced. Kita-ku is still very close to the heart of the city, the values of the properties are positively impacted by the university, but those properties may be examples than premium Chuo-ku.

Websites that List Investment Property for Sale in Hokkaido

There are Japanese real estate websites that list real estate investment for sale in Sapporo and elsewhere in Hokkaido. We publish a list of websites that list property for sale in Japan. Separately, some of the real estate companies publish individual properties for investment, Sapporo multi-family buildings for sale, etc. The database of Japanese properties called REINS is also a good resource for property for sale, but REINS listing can only be accessed by licensed real estate agents in Japan.

While listings for rental properties in Sapporo exist, they are almost always in Japanese only, and they are very incomplete.

Most investment properties in Hokkaido are bought and sold “off market”; that is to say, the properties are never listed online. The properties are bought and sold in private transactions, within the trusted networks of owners and brokers in Sapporo’s real estate community. Agents working to earn both sides of the commission (see our article about dual-agency in Japan) are part of why this is remains true throughout Japan.

To work with a local Sapporo real estate investment advisor, contact us.

Investment Properties Listed Online Tend to Have Lower Returns

It is also true that the investment properties that are listed online tend to be much less desirable than properties that are sold in private real estate sales.

“When commercial brokers get a listing, they try to sell it to their private buyers list first. If these favored buyers don’t like it, then it goes to the rest of their list. If they don’t buy it, then the broker share the deal with everyone in the office, because they at least want the office to survive. If it’s still not sold, it goes on Loopnet or a similar site.”
— David Lindahl, from his real estate investing book Multi-Family Millions

Generally, only properties that cannot otherwise find a buyer in a private sale are listed online, and those properties tend to have low(er) returns, some problems that makes them undesirable, or both.

While professional real estate investors in Hokkaido may target rental returns of 10-15% of the purchase price, all of the options presented here return at ~8% or below. There are investment properties with high returns available in Sapporo, and those properties are sold via personal relationships in Sapporo between the local brokers and Sapporo investment property owners.

Investments with the Highest Returns are Sold Off-market

Talking with real estate brokers in Sapporo that help clients buy and sell investment property: 50% to 70% of real estate for investment in Sapporo is sold off-market.

The best investments are bought within the insider networks of agents and their preferred clients. Buying investment real estate off-market is the standard in Japan, and in every real estate market. When a valuable property is for sale, experienced investment property agents know that finding a buyer will be easy, because they know several buyers that will take high-yield properties in Sapporo as soon as they become available. Potential buyers are known, in advance (many of them are repeat buyers).

To see better investment properties in Sapporo, you should develop a relationship with a local Sapporo real estate advisor. When you’re ready to meet a property broker in Sapporo, contact us. We are happy to help.

Real Estate Brokers that Specialize in Investment Property in Sapporo

There are several real estate brokers in Sapporo that have experience helping qualified investors identify and purchase profitable investment property in Hokkaido.

If you want to find property for investment in Hokkaido, we recommend you establish a relationship with a local broker in advance. If you can demonstrate that you are a serious, prepared buyer, with adequate purchase funds, you may find a local Hokkaido real estate investment advisor that can introduce you to better properties, including some of Sapporo’s off-market rental properties for sale.

We work for you, not the real estate companies.

We provide person-to-person introductions to prescreened agents that help you sell, buy, lease, or rent property in Hokkaido. We search our custom database to connect you to real estate professionals that speak your language, address your needs and are available now to help you find what you want.

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For More Information:

— Different Real Estate Investment Opportunities in Sapporo
— See our piece about various Taxes in Japan
— Our detailed Guide to Paying Property Taxes in Japan
— We provide a list of Sapporo Tax Offices
— In Hokkaido, there are areas with special rates for property taxes
— Our review of the role of Property Management Companies in Sapporo
— Buying Property in Hokkaido as a Foreigner
— Our list of Tax Accountants for Expats Living in Japan
— Our complete guide for Buying a House in Sapporo
— Our report on How to Rent an Apartment in Sapporo and Move-In Costs for Sapporo Apartments
— Find Lawyers in Hokkaido
— Tax representatives in Japan
— Services that Help Foreigners Buy International Real Estate

See also:
— Guide to buying real estate for investment in Osaka
— Types of investment property in Osaka, Japan
— A guide to the concept of Domestic Contacts in Japanese Real Estate
— Off-market Properties in Osaka