Profit-Making and Yield of Asset Management ~ Real estate Q&A Corner~
- Japanese real estate expertise
Q. What is the "Yield" of real estate investments?
Advertisements, etc., mention a "Gross Yield" which is showing the percentage of rental income to property price.
Practically, there are expenditures such as expenses, so the "Net Yield" will be slightly lower.
Q. What are the costs and expenses on real estate investment?
There are Management fee, Sinking fee (Reserve for repairs), Repair work expenses (if any), Fixed Asset Tax and Urban Planning Tax. In the event of having a mortgage, may also result in repayment and interest payment.
Q. Concern about finding tenants.
Tokyo 23 wards have made great accessibility from redevelopment and expansion of public transportation systems, and the population concentration in central Tokyo has become clearer.
Especially, more than 40% of all households in Tokyo metropolitan area are single people, and the demand for studio-type apartment is steadily increasing.
It is necessary to pay attention to the fact that the spread of population outflow to central Tokyo, therefore the number of tenants tends to decrease in regional cities and suburbs.
Particularly, apartments for single person in central Tokyo are not supplied enough to meet abundant demand, so it is easy to secure tenants.
There are also properties that can use sublease agreements that guarantee rent.