Expanding the Empire

I've always had this desire...I have mentioned it before to some of those who know me, to buy a house with a big bag of cash. Imagine this. You see a property with a for sale sign hanging outside. So you take a stroll around the garden and then wander inside for a bit of a poke around. All looks OK so you say "I'll take it".You then whip out the aforementioned bag of cash (In my fantasy it's a black briefcase) and you say to the owner "here's the money, now get your shit out of here". Wouldn't that be soooo cool?. Like, who does that? Only billionaires and gangsters probably. Well I can now say that I have achieved this goal albeit in a somewhat different way than I had pictured it would go. Well this is Japan after all.

Buying a house has always seemed to me to be one of those unnecessarily complicated things. On one hand you've got a vendor who presumably wants to sell his place. On the other theres a willing buyer who has the money/finance approved. So why does it take so long to wrap up a deal? I realise we're not taking about buying some chewing gum here but seriously, whats  up with all the bullshit? Like, why do people need to involve lawyers? All these delayed settlements and conditional deals going unconditional and other assorted paper shuffling. In Auckland it's all the rage now to sign a contract  making the sale of your house conditional on you being able to find another house that you like and can afford. It's ridiculous. You can buy a car and just a few minutes later be driving off in it. Why not with a house?  Cars have the same issues as property ie, loans, mortgages, and paperwork for title. Car finance companies can have you approved and signed up in very short order and title searches and changes can be done over the counter at your local registration office. Security interests on vehicles get transferred and cleared quick smart. I just can't understand all the performance that goes with buying a house. 

Whatever. Back to the story. In April I went to Kameoka to look at a house that was a court foreclosure and was nearby the first house. I called in on our estate agent and asked his opinion on it. I duly put in my bid but it was too low so I didn't get it. In July Mr H sent an email saying he had a couple of listings that might interest us. So Shizuka and I travelled to Japan in August to have a look at what he had. The first one was very cheap but needed a lot of work. The backstory on this place was that an old couple had lived there. The husband had died a couple of years back and his wife went off to live with her family. In typical Japanese fashion they had simply closed the place up and walked away from it. The family had studiously ignored its existence for the next 2 years until some lawyer got involved and told them to sell it so he could sign off on the estate paperwork. The house was full of junk and needed a full renovation on the inside. While tempted to take it on, I just don't have the time right now.

House no.2 was even more interesting. According to Mr. H it was a holiday home for some guy in Yokohama and hadn't been used very much in the last few years. It was very clean and tidy and best of all had no junk to get rid off. Even the garden was tidy. Nice street, great views and a good price. It took me about 10 minutes to make a decision. Over lunch we told Mr H to hit them with an offer. We had our answer within a hour...we were on. Great. "When do we get the key?" I asked. "Ummm, well....ahhhh. this guy has to clear his mortgage and he's waiting on some money to come to him, so, probably one month or so, maybe". So even though I'm a cashed up red hot buyer and this house is empty and has a seller that wants off it as soon as, we've still got to go through the usual rigmarole and foot dragging that any ordinary Joe Blow has to. I wasn't too disappointed though...at that point I didn't know how close this thing would get to my aforementioned bag of cash scenario.

The one month turned into 6 weeks so it wasn't until late September that we travelled back to Japan. The deal was scheduled to go down on Monday in Kyoto. We arranged to go to Mr H's office first were we signed our end of the sale agreement. On our way there we stopped off at the house to make sure that it was still there and in one piece. We found that in the intervening 6 weeks the weeds had flourished, some bees had established a home in the garden and that most irritatingly, some tosser had dumped a rusty old bicycle and a huge old computer printer and screen behind the house. The whole rubbish thing in this country does my head in. All the nonsensical "recycling" rules and regulations are an abject failure and a complete waste of time. This is evidenced by the fact that rural Japan is one giant rubbish dump of junked equipment and machinery. I can honestly say that one of the main reasons that I would not contemplate living in Japan full time is the ludicrous, pointless time consuming charade that everybody there goes through on a daily basis just to get rid of your household trash. It makes me angry just thinking about it. Before the hoots of derision and exclamations of disbelief start, let me say this....It's always the little things that get to you. Like bread. And the chopsticks issue. And the legal system. 

Anyway...off we went to Kyoto. First stop was Mitsui Sumitomo bank were Shizuka has the account were we had sent the money to. I had imagined that we were there to arrange a transfer to the sellers lawyer's trust account and that it would then be transferred to the seller after the lawyer had clipped the ticket on the way through. Not so however. Mr H explained that as the seller has a mortgage that he needs to clear it's going to be quicker and easier for all parties if we pay him in cash. It took the appearance of several large bricks of Y10,000 bills to convince me that he wasnt joking. Now if you walked in to my  bank in Auckland and asked for enough money to pay for a house they A) just wouldnt have that amount of cash available at such short notice and B) would probably call the cops. Not so here. They didn't bat an eyelid. The bricks of cash went into Shizukas gaudy Hawaiian "carrying all my everyday crap around" bag. It was a far cry from the black leather attache case of my dreams but, it was indeed a bag of cash. 

Next we walked across the street to the UFJ bank and got in the elevator to the 3rd floor. There we met the seller Mr. M and the lawyer that would act for both parties. His name was Mr Big. I'm not kidding. That is actually his real name and I have his business card to prove it. We all went into a small conference room that was freezing cold. This place seriously was like a fridge. A quick call had the bank staff scurrying around looking for the thermostat. That's another one of those little things I was talking about....the 25 degree difference between inside and out that you get in both summer and winter here is crazy.

Mr M was sitting across the table from me. He was clutching a small carry bag which was full of...you guessed it. Cash. Mr Big explained to us the Mr M has 3 mortgages on this property and that with our cash plus his cash these would all be cleared right now. So we all laid out our cash on the table. Next thing your know is that the lawyer and the estate agent are counting these stacks of Y10,000 bills. It looked like a drug deal was going down. I so much wanted to take a picture of it but guessed that was quite inappropriate given the seriousness that was being exhibited by everybody else. Mr M seemed a bit tense as the money was being counted. When the count was confirmed he took all the cash out to the bank officer who deposited in his account and gave him a printout which said he was free and clear of all his debt on the house. He then had to stamp the sale agreement with his Hanko and the lawyer had to check it's authenticity by placing a semitransparent piece of paper over the top of the stamp and rapidly flicking it back and forth several times. It was just as amusing to watch as it was pointless to do. Why you need to verify his stamp when you have just taken a copy of his drivers licence is beyond me. Traditional I guess.

Mr Big, who struck me as a bit of a nerd, asked Shizuka if NZ was close to Russia. Geographically and socially challenged it seems. He then presented us with his bill. It was quite reasonable but in typical fashion wasn't a round number. It was something like Y83,489. payable in cash of course. All we had was 10,000's. Yep...we needed change. 

Mr Big went out to see the bank staff and came back with a handful of smaller bills and COINS! Now we are counting coins on the table of the conference room on the 3rd floor of the UFJ Bank as we buy a house. I could not believe it. And then Mr H hands us the bill for his commission which is something like Y112,833. Once again we are counting coins and everyone is digging into their pockets for the 3 Y1 coins we need to wrap this up. It would never occur to any of these people to say "Don't worry about the pocket change...just round it down". Not only did I just pay for a house with a big wad of cash it also involved loose change.

After it was all over Mr M seemed more relaxed. He handed me the key and I asked Shizuka to ask him about a couple of things I wanted to know about the house. It turned out that he speaks very good English and I was able to chat with him for a while. He told me that he had bought that house when it was new, about 20 yeas ago. He had lived in it for 7 years with his wife and kids before he had to transfer to Yokohama for his job. Since then he had not lived in the house at all. Yes...He had been paying his mortgage for 13 years and had not spent a single night in the house in all that time. He came down to Osaka regularly for work and would always visit the house to do maintenance and gardening but always stayed in a hotel as his company payed for it. He told me he had just received an early retirement payout from his company which allowed him to clear the mortgage, but he needs to continue working. Talking to him I was once again struck by the terrible cost of buying a new house at the peak of the bubble economy. That house had  literally cost him about NZ$400,000 and after 20 years of paying for it he was walking away with nothing. I felt really sorry for him right then. He was a very nice guy and didn't seem at all resentful of the situation. I wished him well for the future and I hope that fate is kinder to him in the next few years.

So just like that, we now own 2 houses in Japan. Mr H says he will find us a tenant so I'm looking forward to the day when I can collect some rent from that one as well. There's a number of things I have to do before that happens...we have to pay the city their exorbitant connection fee for the water system and the water heater is dead (just like the last one) but at least there isn't a mountain of junk and furniture and personal belongings to get rid off. 

Except for that fucking bicycle of course.

The Ideal Home

Sometimes people in NZ ask me questions about my experiences here. Just the other day one acquaintance said "What does a Japanese house look like? I can't even imagine it". He look slightly disappointed when I showed him a picture so I guess he was expecting something constructed entirely of rice paper and bonsai trees with a Zen garden full of Geisha's. If I had to sum it up in one sentence it would be this....everything you know is wrong. 

Kiwi economics 1.01. 

Everybody knows that house prices only go up. Sure you get recessions and crashes which cause prices to dip for a bit but before you know it they're back up there breaking new records. The idea that a house could lose 90% of it's value over a 20 year period is something Kiwis find inconceivable. When I tell them that this is invariably what happens in Japan they just cant believe it. For us a house is so much more than just a place where you crash each night. As well as being a home, its a status symbol(sometimes), an investment in your future, a compulsory savings plan, a retirement fund, a legacy and most importantly....it's a place to store and grow your wealth. As rising property prices are a surefire bet, home ownership is your ticket to financial success. If you can buy in an area that's soon going to be the next big thing that's as good as winning the lottery. You can bet your life savings on it...everybody else has.

Location, Location Location.

Next up for review is our concept of whats desirable. A "good area" is top of the priority list. Nice places have things like trees. Oaks and Pohutakawa's for established old money areas, Palm's for trendy new ones. Views are important...no self respecting million dollar house is without a million dollar view. Tops of hills are good. Coastal is even better. Waterfront property? now you've really made it. If it's an apartment you want the highest floor possible. With a big balcony. Everybody loves a garden, the bigger the better. If you live on a 10 acre lifestyle block you will be the envy of all your mates. God knows what you are supposed to do with 10 acres but hey, you've got them. Privacy is very important. We don't want to live on top of each other. The best neighbours are the ones you cant see or hear.

House and chattels.

Further down the list you've got things like Sunny aspect, prestigious school zones, indoor outdoor flow, BBQ/entertainment areas, period features, garages, parking for boats/RV's/classic cars/horses and designer kitchens and spa pools . Historically listed and Heritage buildings are all the rage. Eco stuff is also catching on. Insulation, heat pumps and double glazing are becoming the new "must have features". So called "Do-ups" fetch more money than renovated houses as people hyped up on home makeover TV shows seek to stamp their personality on the property.

The rest.

Right down the bottom of the list tend to be things like proximity to work public transport, hospitals and transport links. While Yuppie types tend to want to live near the pubs and clubs in the city, they tend to abandon that lifestyle as soon as they grow up and get a clue. Or have kids.  Most people are prepared to travel to work in order to have that ideal house. The last thing you want is a bus stop right outside...think of all those car less losers loitering around. Nobody really cares too much if there isn't a supermarket close by. Age of the building is not very important...it's all about condition. Builders brand names don't count for much.

Deal breakers.

Railway stations, busy roads, neighbours in close proximity, electricity lines, Ugly industrial buildings.

So there you have the rationale and thought processes that are behind probably 95% of real estate transactions in NZ

Just like the grammar, everything in the Japanese market is opposite.

Here, when you buy a new house the value goes only one way....down. If you are lucky the land will retain it's value but the building will be practically worthless in 20 years time. Forget about the property ladder. Here home ownership is more like an escalator to the basement. Unfortunately negative equity is a fact of life for many in this land. 

 

Convenience is linked so closely with location here that both words mean the same thing. I have been to good areas and bad areas in Japan but I'm buggered if I can tell one from the other. The presence or absence of trees or lawns indicates nothing. The most expensive areas tend to be the ones closest to train stations, schools and supermarkets. Views add nothing to the value of the property. Rusty old sheds and dirty factories are so much part of the landscape that they don't detract from the value. Like wise, tangled masses of phone and power cables hanging everywhere are not a consideration. Coastal land is unwanted due to the perceived risk of a Tsunami. Gardens are tiny are are used mainly for parking bicycles in. 10 acre blocks are called farms here. Privacy is non existent as in the most sought after areas people live mere centimetres away from each other. When they look for apartments they seek the lowest floor possible...it's that convenience thing again. It trumps everything. Balconies are just used for hanging out laundry and storing rubbish so nobody cares how big they are.

School zoning does seem to have some effect on purchasing decisions as does proximity to work but all the other stuff that's important to Kiwis counts for very little here. Outdoor living is something that exists only in glossy housing company brochures and things like boats and camper vans never figure in the wish lists of the vast majority. 

As with most things here age means everything. The newer the house is the better. Old house's have little appeal. Old means rubbish and most people are of the opinion the the best renovations involve bulldozers. The brand name is also important. A Toyota house is better than a Panasonic house. Yes Toyota does make houses. And beds too. Bet you didn't know that! 

For Japanese the real showstoppers are upper floors in high rise buildings, old houses, more than 5kms from a railway station, near the coast, or up a mountain away from main roads and hospitals. 

So now can see how the two countries have diametrically opposed ideas when it comes to property and homes and how they are traded and developed. For Kiwis the house is a piggy bank that they live and play in and a place to be cherished and constantly improved. For Japanese its a  machine for sleeping in and storing your possessions and family and that will be discarded when it is no longer able to do that.

Of course all of the above is firmly based on generalizations and stereotypes and there are exceptions to these rules. But you get the idea....

Ooya san

So here I am. A Bona fide Japanese landlord. An Ooya san as they say here. According to most foreigners, landlords in Japan are all racist xenophobes who extort large amounts of money from you and who will throw you out on the street at the slightest provocation. Here's my take on this...  

The western countries all have legislation which prohibits discrimination against various minorities and gives protection from exploitation which all looks very well and good from the ivory towers of the people who dreamt it up but in reality its complete bullshit. What actually happens is that it forces landlords to waste everybodys time and to lie to people instead of telling them the truth. For example, I cant stand the smell of curry. Or Kimchi. Or marijuana. Anybody who habitually eats curry or Kimchi or regularly smokes dope has got sod all chance of renting a house from me. I obviously don't want someone who is a deadbeat no hoper with no money to pay the rent so I won't have any struggling artists or aspiring poets. Wannabe cult leaders and new age spiritual guru's are definitely out...look what happened at Waco Texas. I also don't want 27 people living in my 3 bedroom house. Kiwi's and Aussies overseas would have to be the worst offenders in the world for this. Just ask any landlord in London. I don't want full time party animals who will vomit on my tatami and piss the neighbours off. So that pretty much rules out all Western and Latin American foreigners under the age of 25. I don't want any Cats, Dogs, Rabbit's or any other animals inside. Nor do I want any people with "special needs" who will hack my house to bits in order to create the "modifications" they need for their lifestyle. I don't care that you are Gothic Bondage Dungeon mistress...you're not screwing hooks into my ceiling. 

 In NZ I would need to lie to all these people about why they can't stay at my place because if I told the truth there would be a lot of Indians, Koreans, Rastafarian's, artists, poets, priests, cultists, antipodean backpackers, ravers, animal libbers and sex industry workers screaming about racism, sexism, ageism, fatism, speciesism (I might have made that one up) and just about every other -ism that you can think of.

So as you can see I've covered all contingencies by discriminating against people because of their culture, nationality, age, economic class, religion, sexual orientation and animal ownership status.  Is this all a bit discriminatory? Probably. (I like to think of it as equal opportunity discrimination though) Is it Unfair? possibly. Do I give a fuck? Absolutely not. It's my house and I'll damn well choose who I want to live in it. If I want to put "no foreigners" in my criteria then I will. I believe Its my right and its one of the reasons I choose to be a landlord in Japan...And to anybody who objects to it I say this to them...Grow up and buy your own house if you don't like it or go back home where it's your legally enshrined right to whine about it. Rant over.

Now having said all that I intend to be a good landlord, quite unlike the miserable old bugger I rent a warehouse from at home in NZ. He is the master of the fob off and the change of subject whenever the issue of maintenance comes up. If the roof leaks I will be onto that sucker quick smart. If the drains block I'll just call the plumber. The way I see it is the house is an investment and to protect that investment you need to do some maintenance on it. You also want to have a happy tenant who will stay there forever. If a tenant is late with the rent I won't sling them out straight away, as long as they communicate with me.

The tenant moved in about 12 months ago and has been good so far. She is a single mother of 2 boys in their early teens. She gets some kind of benefit from the government so doesn't work. They are all very polite and well mannered and have kept the place clean and tidy. One thing that does irritate me a little are the small dog's in the front yard. She kind of slipped that one past me. No sign of any Kiwis sleeping on the floor though.

 But most importantly, she pays the rent.

The Property Ladder

Japanese love DIY. No, actually they don't. It's DIY stores that they love. On any given morning around 10AM Conan is packed with pensioners clutching small bags of seeds and larger bags of fertiliser. But while the gardening department is jammed with geriatric horticulturalists, the hardware and building materials aisles are eerily empty. The passion for growing weird vegetables in your back yard obviously does not extend to things like painting walls or building a deck. After all, nobody in this country does any maintenance on their house. Ever. The propensity of the Japanese to call in a professional for anything more challenging than changing a light bulb means that very few people have any useful maintenance items like say, a ladder. Which is exactly what I needed.

Our house is quite tall. Which means things like the roof and gutters don't get much love. After the "no sale - leaking gutter" episode, I knew I would have to do something about it and, while I was up there, trim the pine trees that were overhanging the roof. The problem was where to find a ladder long enough to get up to our stratospherically high roof. The answer came from our increasingly helpful estate agent Mr H. He knew a guy down in the village who had such a ladder, or hashigo as it's known here. The great thing about renovating houses in a foreign country is the vastly expanded vocabulary you will end up with. Just think of all those gaijin suckers paying good money for Japanese lessons...all you're going to learn there is useless crap like "Can you tell me the way to the station?" or, "I have diarrhoea". Wouldn't you rather be out and about, chatting with people and learning really great phrases like "Hey old timer, can I borrow your ladder?" AND, as a bonus, end up with free flowing, non leaking gutters. Of course you would. So anyway, H san the agent brokered a deal with the ladder guy. A six pack of Asahi beer was the rental for this prized possession. 

Mr H came by the house the next morning in his car and drove me down the hill to the hashigo man's house. I don't know if he had mentioned to the old boy that his ladder was going to a foreigner and that it might be used for foreign purposes, like robbing a bank or buying drugs. He did look rather surprised to see me but seemed happy to overlook the possibility of such criminal intent when he saw the cans of Asahi. Next up came the issue of now to get the ladder back to the house. While the distance from here to there is less than a kilometer, it is all uphill. Japan is certainly a mountainous country and our street has a similar gradient as the north face of Everest. Mr H offers to help me carry it all the way up. Now this guy is in his 60's and to top it off he's wearing a nice suit and tie. I don't want to risk him getting injured/having a heart attack and I certainly don't want a ruined suit jacket on my conscience. I tell him that we need a suitable vehicle. His car is a very sensible and boring Corolla sedan. In White. Not very suitable for the task at hand. Now if this was back home in Auckland I could call on a number of vehicles for this job. Like a Mercedes Benz 500SL convertible, which is just as unsuitable but WAY cooler. Or a Like A Toyota Hiace van. Yeah, that would do. This being Kameoka however I'm stuck with a very sensible and boring Nissan Tiida sedan. Also in White. On the face of it both cars seem very similar in their unsuitability but my Tiida has a hidden advantage....it is an ex rental car. 

It is an indisputable truth that rental cars are vastly superior to ordinary cars. These vehicles can do stuff that just isn't possible with your own car. For example, did you know that all rental cars are brilliant for off roading? They are also perfect for street racing, burnout competitions and gravel road rallies. Their engines rev higher and their handbrakes provide more stopping power but, most importantly, they can carry all sorts of items on the roof....like ladders.

I tell Mr H to go ahead and do whatever he should be doing today and hike back to the house. A quick rummage around in the loft comes up with some old curtains and some rubber straps from the Kei truck cover. I jump in the Tiida and roll on down to the village. I notice that Mr H and the ladder owner are still there. Obviously they want to witness some gaijin craziness. When you're 80 years old and live in the boonies anything passes for entertainment I guess. I throw the curtains on the roof as padding and set the ladder on top. Next I take the straps and tie them to the ladder. I then open each door and lead the straps inside the car. Closing the doors holds the strap in place between the roof and the door frame. I hear the old boy utter an "AHH!!!" and turn around to see him nodding in admiration. Mr H is looking a bit concerned however. "Are you sure this is safe?" he asks. "As long as I don't go on the Highway" I reply. I give the old boy the thumbs up and cry "Kiwi Style" as I drive off. Looking back in the rearview mirror I see the pair of them watching me intently. I am silently praying that the ladder stays put...if it falls off they will talk about nothing else for the next 5 years. I make it around the corner and out of sight. The ladder wobbles a bit but stays on the roof. 

A couple of days later I return the ladder. The old guy is sitting in his kitchen when I knock on his door. "Hashigo arigato" I say to him. "beeru arigato" he replies to me. I take the ladder off the roof of the Tiida. He looks at me and grins. "Giajin style" he mutters to himself

Another local legend has been created.   .