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The Savvy Foreign Investor’s Guide to Japanese Properties

The full title of Toshihiko Yamamoto’s book about real estate in Japan is The Savvy Foreign Investor’s Guide to Japanese Properties: How to Expertly Buy, Manage and Sell Real Estate in Japan. We were interested to read more about what Yamamoto had to say about investing in property in Japan. We read his book, we took detailed notes, and as a service to our clients and real estate investors everywhere, we offer this very thorough review.

Let us begin with some biographical comments from the author:

I’m a licensed real estate broker, long time investor and property owner… I help investors make better and more lucrative deals.
— Toshihiko Yamamoto

In his book, Yamamoto uses his first-hand experience to take us beyond vague generalities and provide deeper insights into real estate transactions.

I… have a BA in economics from Osaka Prefecture University, as well as an MBA from Bond University in Australia. I bought my first condo at the age of 27, and my first residential building – a 13-unit apartment complex in Tokyo – in 2008, and another 13-unit complex in Chiba. I’ve dealt with real estate agents and brokers, property management firms, contractors providing renovation services, and many others.

Each aspect of Yamamoto’s background helps him provide value to foreign investors. Even with our own experience as real estate consultants, Yamamoto’s book introduced us to several new concepts that helped us to better understand real estate in Japan.


The Savvy Foreign Investor’s Guide to Japanese Properties is an important contribution to the category of Japanese real estate books written in English. In a little over 130 pages Yamamoto’s book delivers a lot of pertinent information without being a chore to read.

The book is divided into 10 chapters, covering a range of topics including “Practical Property Hunting Tips and Techniques,” “Evaluating and Managing Property,” “Investment Options – Conventional and Unconventional,” and more. There are also several case studies of foreigners buying real estate in Japan (including notes on real estate taxes in Japan and establishing residency). The writing style is almost casual, like a series of conversations edited into chapters.

Yamamoto also credits a co-author; an architect named Masatoyo Ogasawara makes contributions to the book about the building process, and more generally about managing real estate construction projects in Japan for foreign clients.

I’m a US-trained architect who specializes in high-end architecture, both residential and commercial… I am both a registered architect in the state of New York and a first-class architect in Japan. What I bring to this book is a global architect’s perspective and practical experiences both abroad and in Japan.
— Masatoyo Ogasawara

Ogasawara adds the last two chapters to the book, providing more examples of Japanese real estate transactions.

The book was edited by Douglas W. Jackson.

Why Invest in Japan?

Yamamoto does a very good job (in several places) of providing good reasons as to why foreigners might want to invest in Japanese real estate:

You should know that Japan is a viable place for real estate investment, and that several good options for investment exist. You can count on a good supply of viable properties, get a high yield on your investment, and depend on the rule of law to guard that investment. The country is politically stable, and the number of households is growing despite a declining population.

They’ve discovered the beauty of investing in Japanese real estate: fully leveraged deals, very stable cash flow, good liquidity and quite good returns.

[F]irst class investors believe in the Japanese property market. They believe the market liquidity is good enough in Japan, which should automatically give confidence to individual investors.

Through a series of comments and anecdotes, Yamamoto provides details and examples that explain the strong foreign interest in Japanese real estate.

Buying Property in Sapporo

As we are a Hokkaido real estate company, we have a strong interest in perspectives on the real estate market here and in Sapporo (in particular). The Savvy Foreign Investor’s Guide to Japanese Properties makes reference to Sapporo several times:

With those things in mind, the areas to focus on now are in the urban territories of Tokyo, Osaka and Nagoya, as well as Fukuoka in Kyushu and Sapporo in Hokkaido.

Notes like these about Sapporo appear throughout the book.

Investors should put priority on Urban areas. Tokyo is the best place to make an investment in Japan, offering stability and good value, although it’s expensive and offers relatively low yields because land prices are expensive. If you can’t find a good deal in Tokyo, then go to other urban areas like Osaka, Nagoya, Fukuoka and Sapporo.

When Yamamoto says there are a lot of great investment opportunities in Sapporo, we are quick to agree with him (allow us to show a little pride and enthusiasm for our slice of Japan).

Beyond ego and bragging rights, reports on land values in Japan from as recent as 2023 echo the ideas Yamamoto is sharing here. There is real estate appreciation in Japan, and land prices in Sapporo are one indication of confidence in the region.

Tokyo Real Estate

Yamamoto has spent much of his professional career living and operating in Tokyo. He has a strong preference for that market, and supports those recommendations based on interest from both private and institutional investors.

Institutional investors indicate that they overwhelmingly prefer Tokyo first and then Osaka and Nagoya, followed by Sapporo, Sendai, and Hiroshima. Everyone loves Tokyo. Institutional people prefer to buy an entire building in front of Tokyo station, for example.

While real estate investors that take risks are often rewarded, most investors prefer stability and a “sure thing” whenever possible. Tokyo is one-of-a-kind, and has so much gravity as a world class city it will always provide some measure of consistency. While stability is important for most investors, it is perhaps especially crucial for foreign real estate investors doing business far from home.

Foreign investors see Tokyo as the most attractive place in the Asian-Pacific region, and nearly 60% who responded that way are from Asia.

It’s commonly understood that Tokyo is a place of great opportunities for the Japanese (for business, but also for culture and creativity). Even as other areas of Japan experience depopulation, the Japanese continue to come to Tokyo. Tokyo’s popularity provides some assurances to investors about opportunities to rent and sell property in the future.

As the government works to draw foreigners to Japan with new investments in infrastructure in Tokyo, the city will become even more entrenched as the central hub of opportunity. This is true not just for Japan, but increasingly as a go-to economic center for all of Asia.

Tokyo is the most attractive city in the Asia-Pacific region.

Both Yamamoto and his partner Ogasawara operate businesses in Tokyo; it is no surprise that they put so much emphasis on the most famous of all places in Japan.

But as The Savvy Foreign Investor’s Guide to Japanese Properties is not a book about Tokyo, below we’ll share much more of Yamamoto’s broader perspective on various aspects of investing in Japanese real estate.

New Building Premium

As you begin to learn about real estate in Japan, you will quickly realize that the Japanese (and Asian buyers, in general) like “new.” There is a strong preference for new construction over what they call “second hand” apartments or homes in Japan, which influences both occupancy rates and real estate prices.

In the current Japanese market, new apartments tend to be priced 10 to 20 percent higher than the real value due to the marketing costs spent by the developers. New apartments usually offer the high-tech facilities and very modern service. Developers also know the Japanese consumers love new apartments more than second-hand units, so they take advantage of the consumer bias.

It is not that existing (“second hand”) property is less valuable or provides a lower yield (often quite the opposite). The book provides the investor with examples of how “new and shiny” real estate has benefits (easier to sell or rent that property), but can come at a cost (a higher purchase price, which can mean lower yield), and how that might impact financial planning (in terms of an exit or resale plans).

This preference for “new,” and even a willingness to pay more for new construction over existing construction, is such a strong trend it deserves its own focus. For now, Yamamoto does a great job of quantifying how powerful this preference is in the Japanese market. Investors should understand the trend as they assess investment property for sale.

Notes for Real Estate Investors in Japan

While the comments in The Savvy Foreign Investor’s Guide to Japanese Properties could certainly apply to someone buying a primary residence here in Sapporo, much of the detail of the book is specifically focused on how to make better decisions as an investor. In these 10 chapters you’ll find both lessons aimed at novice investors, as well as “insider tips” that might help round out the education of more experienced investors.

Here are two good examples of investor-specific comments from our notes on Yamamoto’s book:

Good property managers are very quick at finding replacements for departing tenants, which is crucial because rental properties all over Japan are in a surplus, which means rental properties are competing quite fiercely. It’s a tenant’s market.

Yamamoto talks quite a bit about property managers (which is a good topic for foreign investors, or anyone that needs a “hands-off” investment). We like this comment in particular as he mentions that Japan is a “tenant’s market.” There is a lot to know about renters’ rights and the rental market in Japan. Knowing that renters have a lot of options can help shape expectations about where to buy and what yield to expect.

And speaking of yield:

Some of the prestigious properties are only generating a 5% yield, which doesn’t make sense economically. It might be that those in business are looking at capital gains and not income.

As another sign of Yamamoto’s focus, there are numerous comments about investment yield throughout the book. In the comment above, he can help set some expectations for return on investment; 5% would be considered low for Japan, but there are reasons why that might be acceptable for some buyers.

Savvy investors always think about exit strategies.

We personally realized a few things about when (and why) to sell off real estate investments based on Yamamoto’s writing (with a little help from another book on our list, Winning Strategies for Japan Real Estate Investment).

Here is another comment about selling: This comment was from a section about creative investment strategies.

If you have such a property and want to sell, however, the design or structure may look a bit odd to potential buyers because of the combination of house and rental apartments, making it more difficult to sell.

While that quote is in reference to mixed-use real estate (and how that can affect your ability to get a loan for real estate in Japan), Yamamoto’s eye for how various decisions might help or hurt your exit strategy was another learning moment.

The book is full of specific details like the comments we feature in this review.

Akiya in Hokkaido

Akiya are a controversial topic in real estate. We include this section of our review of The Savvy Foreign Investor’s Guide to Japanese Properties because Yamamoto has quite a lot to say on that subject.

Yamamoto suggests that one reason why akiya are a growing phenomenon in Japan is related to what happens when someone in Japan inherits a sub-urban or remote property from their parents:

They don’t need or want to own and maintain another house, which are difficult to sell as it is without flipping. They can’t or won’t do anything with them, and just leave the place empty, go to their local agent to sell it outright without any renovations made. And the local agent can’t sell it because the place is often essentially damaged goods. Old, old-fashioned, or built at a time when the quality was not high.

Across several sections of his book, Yamamoto does an interesting job of looking at the subject of akiya from multiple angles:

Those places often become distressed properties. In the right hands, however, quite a few of them could be turned into Airbnb properties or other facilities and make money. [V]ery little investment… would make these places quite attractive to some customers in the market, such as a gross yield of 12% on the initial investment.

You should read the book to learn more about what Yamamoto thinks about akiya – he has quite a bit more to say on the topic.

Japanese Architecture

In The Savvy Foreign Investor’s Guide to Japanese Properties, Yamamoto includes contributions from his business associate Masatoyo Ogasawara, including some notes on architecture for real estate investors.

As just one of many examples, here is a note about the role of sub-contractors in construction in Japan:

Because the construction industry in Japan features a complex system of multi-layered subcontracting, it is difficult even for a primary contractor to calculate the actual amount. That ambiguity is particularly tough for foreign clients to understand.
— Masatoyo Ogasawara

Based on our own experience with remodels of existing property in Sapporo, we have seen evidence of what Ogasawara is saying. As you do business in Japan, you will see these “sub contractor layers,” often as teams of representatives (lead by the primary contractor) show up to tour the property in the bidding process, or as construction progresses.

Some of the differences in design, construction, and architecture you might encounter in Japan are addressed in these last two chapters. From there, Ogasawara makes the case for why some foreign investors might want to pay for consultants, as they work with local Japanese companies to remodel or build a new home in Japan. Much of the rationale he suggested for wanting help holds up to what we have seen in this market.

In Closing

We wrap up our review of The Savvy Foreign Investor’s Guide to Japanese Properties with this final quote from Yamamoto:

I always care more about the investors because I want them to make money. It has to be a win-win.

As foreign buyers work with experts to make decisions and navigate the process of buying real estate in Japan, they do expect a focus on their profitability . The “win-win” spirit of Yamamoto’s quote is something we admire and try to bring to our own work.

Throughout the book, Yamamoto goes out of his way again and again to show some creativity and “beyond-the-basics” comments about opportunities to make money in real estate in Japan. If you’d like to expand your experience with Japanese real estate, take the time to read The Savvy Foreign Investor’s Guide to Japanese Properties. It was very much worth it for us.


If you are interested in other books on real estate in Japan, we provide a similar level of detail in our review of Landed Japan, by Christopher Dillon. And for more information, see our post on the best books about Japanese real estate.

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For More Information:

— Our collection of articles on real estate in Sapporo
— Some details on buying a house in Niseko and more
— Research on property in Otaru
— More general articles about Hokkaido real estate
— Some particulars on real estate taxes in Japan

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