Frequently Asked Questions
What is cash flow?
Cash flow is the remaining balance after monthly expenses is subtracted from monthly income. (Rental income).
The main 2 expense items are the following:
1. Regular expenses: Pension tax, insurance fee, property management fee, HOA, loan repayment (If loan is made)
2. Temporary expenses: Vacancy fee, repair fee, fees when purchasing a property (Closing costs, Brokerage fee)
For an investment property the best purchase price to obtain cash flow is what the average employee is able to pay which is thought as $80,000 – $150,000. We have carefully selected properties that are suitable.
Do I have to pay taxes for both America and Japan?
Whether in America or Japan, you will have to pay for the higher tax amount.
You will have to file a tax return for both countries, however, there is a foreign tax credit that may be applied so you will not have to pay taxes in both countries.
You will pay taxes in America, then if taxes are higher in Japan you will then pay the difference. If taxes are higher in America, you will not have to pay taxes in Japan.
If you are in a deficit in both countries then taxes do not have to be paid. In Japan, you can subtract the deficit from taxable income and earn tax savings as well.
This tax benefit is one of the biggest advantages in American real estate investing.(Click here for details)
How is the property managed?
We recommend utilizing the services of a local property management company which has gone through our strict examination.
We will translate investment reports and other English documents as needed. (A service fee will be subtracted from the monthly rent)
How do I receive monthly rent income?
Usually you will open a bank account in America and the property management company will collect and deposit the monthly rent.
You can choose to either keep the monthly rental deposit in your savings account or have it transferred online to a specific account.
Is it possible to open a bank account in America without going there?
At Union Bank it is possible to open an account while staying in Japan.
How do you pay for property tax?
Property tax occurs biannually, and it is paid the same way as other fees.
Every year or beginning of the year our company coordinates a service to assist in property tax payment for asset management clients only.
If you are not a client we will provide payment dates for you on our email newsletter.
When purchasing is there any other fees involved other than the purchase price of the property?
When purchasing there is a Title fee, Title insurance fee, Lawyer fee, and purchasing assistance fee that arises.
We are not the principle brokerage so we will not collect a brokerage fee.
Can I get a loan?
Of course a loan is possible. We have a relationship with a financial institution who can provide you with a quick preapproval.
Do you have seminars?
Our company has 1-2 seminars each month. Please check our website Progress Information – Seminar Information for more detailed information.
After the application process how soon will rental income occur?
Rental income will occur the following day after application.
We usually have tenants already renting the property so the rental income will occur the next day.
If the property does not have tenants, we will guarantee payment for the vacancy period, so you can expect rental income from the next day.
Rental income will have a large effect on profits, so this service is very popular with our clients.
Can you provide details of the repair plan?
The main repairs have already been done by our company, so major repairs will usually not be necessary. There is also a warranty for all repairs done within a year after sale. (Details in contract).
All repairs will be paid for by the owner of the property. The most common repairs will be toilet clogging, faucet repair, or similar minor repairs.
Every 2 years when a tenant moves in/out, we will repair as needed with the deposit made by the tenant for half a month’s rent at owner’s expense. (Examples provided)
What are common types of claims and how do you resolve them?
Most claims are repair related.
When a claim arises, the property management company will investigate and decide whether it is an urgent matter and repair as necessary. If it is regarding a large repair the owner is contacted each time for approval.
Our asset management service team will provide support in Japanese when discussing matters with the property management company making it a smooth process.
Please tell me about the different types of insurance.
The following are the types of insurance our clients purchase.
-Natural disaster (Flood, Hurricane)
-Rental insurance for tenants
In regards to Rental management, what is an income item and expense item?
For income item (Rental income – Vacancy loss) is calculated
Expense items are as below. (Some many not occur depending on the area)
-Tenant renewal fee
-Tax return fee
-Asset management fee
Please be aware that it may seem like there are not too many expense items and you may end up with income in some cases, however, there will be times when you will have no income.
With over 10 years of experience in investments, we are able to visualize detailed expenses from an investor standpoint.