Do any of these worries or concerns sound familiar with a whole-building income property?

• ・I'm anxious about whether I can even get financing at all—I've heard it can change depending both on the property itself and on my own profile.
• ・I've been searching by how high the gross yield is, but I'm not confident the income and expenses will actually add up.
• ・I'm not sure whether I can simply trust the "fully-occupied assumption" rent roll (a table listing the rent and occupancy status of each unit) that the seller provided.
• ・I want to keep adding to my portfolio, but I'd like to sort out what criteria to use in choosing my next building.
• ・This is my first whole building, and I don't know what to check first.

On this page, we lay out the viewpoints worth keeping in mind when you decide whether to "buy, pass on, or go with a different property" for a whole-building income property, and then honestly share what we at SIMCITY can genuinely help with and the things we'd like to confirm together with you when you consult us. (This does not guarantee investment results or future profits. The final decision is always yours to make.)

What we do first when you come to us for a consultation

With a whole-building investment, deciding on momentum tends to leave the numbers not adding up later. First, we check the following together with you.

• ・Clarifying your goal: Are you adding to a portfolio, or is this your first building? The properties worth looking at change depending on the direction you're aiming for.
• ・Gauging your own funds and borrowing capacity: This is the very first thing we check (whether financing is granted ultimately depends on each financial institution's review).
• ・Checking the site, the rent roll, and so on: We visit the property in person and gather the rent and occupancy status of each unit, along with the necessary documents.
• ・Widening the search: We don't fixate only on off-market properties—there are good ones among publicly listed properties too. We look at both.

The core of SIMCITY's judgment——we don't choose by the yield figure alone

A property with a high gross yield is not necessarily a good property. Precisely because we also handle management ourselves, we look at a building less by the size of the number and more from the manager's viewpoint of "whether it will keep attracting tenants" and "whether there is room to raise the rent."

For example, refining the rental terms (allowing room-sharing, pets, or elderly tenants, and so on) can broaden the pool of potential tenants. Including such refinements, we think together with you about ways to raise the yield, even by 1% (results vary by property, timing, market conditions, and occupancy, and we do not guarantee any increase in rent or improvement in yield). Whether to buy in the end is your decision. We see our role as honestly assembling the material for that decision.

Two numbers that are easy to overlook——"gross yield" and the "fully-occupied assumption"

Gross yield (annual assumed rental income ÷ property price) is the figure before deducting vacancies, various costs, and taxes. The net yield, which is closer to what you actually take home, comes out lower than the gross once these are subtracted. If you judge by the gross figure alone, you can end up, after buying, with numbers that don't add up.

Also, the "fully-occupied assumption" rent roll presented by the seller is sometimes estimated higher than reality. Taking into account nearby asking rents and vacancy conditions, we review a realistic estimate of income and expenses together with you.

*Any income-and-expense estimate is only one example. Actual results vary with vacancies, rises and falls in rent, repair costs, interest rates, taxes, and so on (the figures are not premised on continuous full occupancy). This is meant to organize and explain the details of the property; it does not recommend any specific investment or guarantee future profits.

Whether financing "comes through"——the first fork in the road for a whole-building investment

With a whole-building income property, whether a financial institution will lend at all becomes a major fork in the road. Whether financing is granted, and on what terms, is ultimately decided by each financial institution's review, based on the property (age, structure, location, earning power) and on your profile (annual income, own funds, existing borrowings, and so on).

Many people hope for a so-called full loan (borrowing with almost none of your own money put in), but the financial institutions that will agree are limited, and the review tends to be stricter. We first check your own funds and borrowing capacity together with you, assist with the financing consultation, and think through what approaches and options are available (this does not promise that financing will be obtained).

"Buy / pass on / go with a different property"——our honest line-drawing

With a whole-building investment, even for the same property, people waver between "buy, pass on, or change the terms and go with a different property." Beyond the yield figure alone, we sort things out together along axes such as the income and expenses, the market rate, the exit (how easy it will be to sell in the future), and the financing outlook (if we think "it's better to pass for now," we'll tell you so honestly).

• ・Buy: When the numbers work on a realistic rent roll (rents close to the actual local market, not a fully-occupied assumption) and the financing outlook is also in place.
• ・Pass on: When it feels higher than the market rate, when the yield looks high because of a "fully-occupied assumption," or when the price has dropped well below the market or the seller is in a hurry to sell and the background behind that cannot be explained. It is not necessarily a "bargain." Rather than judging by price alone, we carefully check the background of why it is being offered at that price and at that time (the reasons vary, and sometimes it is a good property).
• ・Change the terms and go with a different property: When, rather than the yield figure, it's better to prioritize location, building age and structure, the exit (ease of future sale, ease of dividing it in an inheritance), and financing terms, and to search again.

As properties to be especially careful with, properties intended for vacation rentals (minpaku) or share houses, buildings under the old earthquake-resistance standard (the standard in force before June 1981), and land that is unrebuildable (cannot be rebuilt under current law) tend to be harder to finance. When the old earthquake standard and being unrebuildable overlap, note that both funding and the exit (a future sale) tend to become difficult (whether financing is granted varies by property, financial institution, and your situation).

Please note that we do not offer sublease (an arrangement in which a real estate company leases the units and re-lets them). On that basis, we share our honest view as material for your decision. With a building that already comes with a sublease contract, the rent may be revised (reduced) partway through the contract, and costs such as maintenance and repairs may fall to the owner; and because the contract carries over to a new owner, we believe it needs to be assessed carefully (which approach suits you varies by property, contract, timing, and market conditions).

Costs and timeframe

From consultation to completion of purchase, the rough guide is about one month if things move quickly, and usually around two to three months (this is a guide from our experience so far, not based on statistics, and it may be longer or shorter depending on the property, the financing, and how negotiations go).

In addition to the property price, various costs apply. The main items are——

• ・Brokerage commission (the upper limit is set by law; for a sale price over 4 million yen, it is "sale price × 3% + 60,000 yen" plus consumption tax)
• ・Stamp duty / registration and license tax (registration of the transfer of ownership, and, if you take out financing, registration of the mortgage) / real estate acquisition tax
• ・Fees to the judicial scrivener (registration procedures) / fire and earthquake insurance premiums / fees and guarantee charges associated with financing, and so on

The total varies with the property and conditions, but the general guide is around 7 to 10% of the property price. Because income-producing rental properties can rarely use the tax reductions available for owner-occupied homes, the proportion taken up by these costs tends to run higher.

*A detailed estimate of tax amounts and registration costs will be provided by a tax accountant or a judicial scrivener. Some tax reductions have deadlines, and some differ depending on the municipality where you live. We do not calculate or assert individual tax amounts.

Also, separate from the costs at the time of purchase, costs also arise while you hold the property. With a whole building in particular, major repairs to the exterior walls, rooftop waterproofing, water supply and drainage, elevators, and the like can come due all at once, affecting what you actually take home (the net yield). From the manager's viewpoint, we also check together an estimate of future major repairs based on the building's age and structure (this is only an estimate and varies by property; these are costs incurred while holding the property, separate from the costs at the time of purchase).

SIMCITY's strengths

• ・We handle both "brokerage" and "direct purchase by our own company." When you want to sell, we can also buy it directly (a direct purchase in general tends to fetch a lower price than taking the time to sell through brokerage; this varies by property and conditions).
• ・We present an appraisal of the property and an estimate of its income and expenses (this organizes and explains the details of the property; it does not guarantee future profits or recommend any specific investment).
• ・We can take on management after purchase in-house as well (dealing with tenants, collecting rent, handling renewals, and so on). That is exactly why we can look at a property, even before purchase, from the manager's viewpoint of "whether it will keep attracting tenants." Of course, you are free to manage it yourself (self-management) or to have another company manage it. We never push our own management on you.
• ・We assist with your financing consultation and think through the choice of financial institutions together (whether it is granted depends on each financial institution's review).
• ・We handle matters on-site. For fields outside real estate such as inheritance, tax, and registration, we work with our retained attorney, retained tax accountant, and partner judicial scriveners, and introduce a specialist as needed (any engagement is a contract between you and that specialist). We do not take any referral fee for making an introduction.
• ・We take on consultations for income properties across a wide range—from Tokyo and the three neighboring prefectures, of course, to properties all across the country (please consult us individually about whether we can take on a given case).
• ・Consultations and appraisals are free (*for distant locations that take more than two hours one way, we may, after discussing it with you in advance, ask for actual out-of-pocket costs such as transportation).

Frequently asked questions

Q. Is a property with a higher gross yield a better property?

A. Not necessarily. The gross yield is the figure before deducting vacancies, various costs, and taxes; the net yield, which is closer to what you actually take home, comes out lower once these are subtracted. A seller's "fully-occupied assumption" rent roll is sometimes estimated on the high side. We recommend looking not just at the numbers, but also at the realistic income and expenses and "whether it will keep attracting tenants."

Q. Even if I have little of my own money, can I buy with a full loan?

A. Many people hope for a full loan, but the financial institutions that will agree are limited, and the review tends to be stricter. Whether financing is granted, and on what terms, is ultimately decided by each financial institution's review. We first check your own funds and borrowing capacity, and think through a manageable funding plan together with you.

Q. How much should I budget for the various costs of buying?

A. The general guide is around 7 to 10% of the property price (it varies with the property, its age, whether you take financing, registration costs, and taxes). Income-producing rental properties can rarely use the tax reductions for owner-occupied homes, so the proportion tends to run higher. A detailed estimate of tax amounts and registration costs will be provided by a tax accountant or a judicial scrivener.

Q. Can I also ask you to manage the property after I buy it?

A. Yes—we can take on management after purchase in-house (dealing with tenants, collecting rent, handling renewals, and so on). You are also free to manage it yourself or to have another company manage it. We never push our own management on you.

Q. How should I look at a property that comes with a sublease (rent guarantee)?

A. We do not offer sublease. On that basis, to be honest, with a sublease the rent may be revised (reduced) partway through the contract, and costs may fall to the owner; including the fact that the contract carries over to a new owner, we believe it needs to be assessed carefully (whether it suits you varies by property, contract, and market conditions).

Why clients choose SIMCITY (just three things, to close)

• ・Because we handle management in-house, we can choose a building from the viewpoint of "whether it will keep staying filled." Beyond the yield figure alone, we think together about whether it will keep attracting tenants and whether there is room to raise the rent (results vary by property, market conditions, and so on).
• ・Brokerage, direct purchase by our own company, and financing consultations too. Whether you're buying or selling, we help—from gauging the funds to the exit—to fit your circumstances (whether financing is granted depends on each financial institution's review).
• ・If we think "it's better to pass for now," we'll tell you so honestly. More than the size of the numbers, we value a long relationship with you.

Please feel free to reach out first

"Should I buy this building?"——the answer changes with each property and each client. First, tell us about the property you're considering and your situation. Whether or not we're the right fit, we'll tell you honestly. We do our best to reply to your inquiry as quickly as we can (timing may vary depending on the content).

Consultations and appraisals are free (*for distant locations that take more than two hours one way, we may, after discussing it with you in advance, ask for actual out-of-pocket costs such as transportation).

▶ Book a free consultation here (out-of-pocket costs may apply for distant locations)

Last updated: August 17, 2026
Supervised by: Representative Director / Licensed Real Estate Broker, Hiroyuki Konuki (Real Estate Brokerage Business, Tokyo Governor License (2) No. 101645)