So in our previous blog post, we mentioned that as a rule of thumb, you have to factor in an additional estimated 5-8% of the cost on top of the cost price.

If you’re an existing home owner in Singapore, you would know that you have to pay conservancy charges for public house, maintenance fee and sinking fund for condominiums. Just like in Singapore, running costs depends on the type, age and size of the property. For example, it is not uncommon for the maintenance fees of a holiday home Hakone with a hot spring to cost more than a thousand dollars, but if we’re using our trusty studio unit in Tokyo that doesn’t have many facilities a as an example, management fees and sinking fund can be as low as $100, especially if it is new.

Here’s a breakdown of the fees together with ballpark figures of how much you can expect to pay:

1. Fire/Earthquake Insurance

Being an earthquake prone country, it is mandatory for home owners to get insurance if they have obtained a bank loan. It is hard to give a specific figure because insurance premiums depends on the company, coverage term. Also, insurance coverage is being re-evaluated all the time, so it’s best to speak to your bank or your agent.

2. Property taxes (Billed anually)

How much: JPY 130,000 (approx $1500)

We all know that property taxes have to be paid in just about every country, and Japan is no exception. Although property taxes are calculated based on the assessed value of the land and building, you can expect to pay around JPY 130,000 for a unit purchased at JPY 35,000,000 (approx. $SGD420K)

3. Management Fee and Sinking Fund (Paid Monthly)

How much: JPY 300-400 per sqm (SGD$3.50 to $5.00 per sqm)

For cleaning and maintenance of the common areas in the apartment/condominium, owners have to pay management fee and sinking fund. The fees depends on the age of the building, facilities and number of units, but it adds up to about JPY 300- JPY 400 per sqm.

The sinking fund together is collected every month by the building management. These funds go toward large scale restoration works to the buildings after a period of 10-15 years.

4. Leasing Management Fees (Paid Monthly)

How much: Usually 5.4% of your rental income

If you’re not in Japan, it makes sense for someone in Japan to help you take care of your monthly rental income, act as a proxy for some fees; for example management fee and sinking fund, day-to-day operations which includes liaising with your tenant.

5. Repair fees

Unless it can be proven that your tenant had willfully damaged any appliances/fixtures/equipment, any repair fees incurred from fixing broken appliances and equipment in your studio will have to be borne by the owner under circumstances of normal use.

Relating articles: How much do you really need for Japan properties Loan edition?