Can Foreigners Get Loans to Buy Japanese Property?

Investing in real estate properties is not easy, but it can be rewarding in so many ways. Many wealthy people have claimed that property investment is the best way for wealth creation. It can provide the investors various benefits such as a diversified portfolio, cash flow stability, and long-term high returns. But acquiring real estate under your name is not as simple as buying a stock. There are legal processes to undergo before owning a property.

In most Asian countries, it is complicated for foreigners to purchase real estate properties due to several state restrictions. However, Japan is different – it allows non-Japanese to own real estate without the need for citizenship or visa. The same process applies to them as to Japanese buyers. In simple terms, foreigners can own real estateland included –  in Japan.

Recently, many foreigners got interested in Japan's real estate investment. They have observed that the value of real estate in the country is relatively cheaper compared to any other country. For any real estate investor, this is an excellent opportunity to have a diversified investment portfolio. But looking for the best Japanese property is not the only thing that investors must consider. Foreign investors also take into account the method of financing that they are going to use.

 

I’m A Non-Japanese Buying A Japanese Property. How Can I Finance It?

 

Of course, before buying a property, you need to consider your financing. If you have sufficient cash to purchase a Japanese property, you can anticipate a faster and smoother transaction. But what if you do not have enough cash on hand as of the moment? Getting loans will probably cross your mind. But is it possible for a foreigner to get a loan approved in Japan?

The answer is an absolute yes. If you are a foreigner, you can get a loan to finance your ideal Japanese property. In Japan, there are financial institutions that offer mortgage loans to non-Japanese and assist them with their loan applications.

Typically, there are general prerequisites for housing loan applications. And for applicants, some of these prerequisites include the age, years of employment, annual income, and the eligibility to take out Group credit life insurance. However, these requirements vary depending on the financial institution you have applied for a loan. Some of the Japanese banks that offer mortgage loans to foreign residents are:

Prestia SMBC Trust Bank

Shinsei Bank

Tokyo Star Bank (Japanese Site)

 

English language information is available on these banks' mortgage products. However, take note that all legal documents, as well as the terms and conditions, will be in the Japanese language. English translations are usually for general guidance only. If you are planning to get a mortgage loan with a Japanese financial institution, it is your advantage if you are fluent in Japanese.

Additionally, most of the Japanese banks require that the foreign applicant of mortgage loan has either:

  • Permanent Residency status
  • a Japanese spouse; or
  • a residence period in Japan long enough to be eligible for applying for Permanent Residency status

It is better to consider these when applying for a mortgage loan. Typically, Japanese financial institutions require these prerequisites to reduce the risk of payment delays. Your residency and employment status will give them guaranty that you can pay, and you have a genuine personal background. When you have at least one of these criteria, your chance for loan approval will be higher.

 

I don’t meet any of these prerequisites, but I want to invest in Japanese real estate property. What should I do?

 

Perhaps, you are just looking for a Japanese property as an additional investment. You probably heard as well that the borrowing rates in Japan are usually lower than the other countries. The benefits can entice you, but with these criteria, you will feel restricted to build your wealth in Japan real estate market.

Is there another way to invest in Japanese real estate property?

Yes, there is.

Japan Property Investments is a platform that provides foreigners like you to invest in the Japanese real estate market without the hassle of getting a loan. JPI helps foreign investors to grow their wealth through Fractional Property Investment. It is a simple and low-cost way of investing that guarantees you quality properties with the potential to generate income. With this type of investment, you can purchase a Japanese property and earn passively at your own convenience.

 

Want to expand your wealth with Fractional Property Investment? JPI can definitely help you. The JPI team is just one email away. Remember, time is vital when it comes to investments and wealth creation. Every second counts.