How we came to own our English school in Japan

The Bulletin (Issue 37)

If you’ve not been following how my wife and I came to be self-employed English teachers in Japan, the saga began with the decision to teach English in Japan, to teach from home, continued with a move to rented accommodation above a soba shop, how we dodged a bullet and, for the next six years, rented a Showa-era single story house to run as our very own English school.

Only it wasn’t entirely our very own English school. The landlords were fine, the neighbours were fine, I dug the house (check out my watercolours of the place). But we were renters — sharecroppers, educated sharecroppers maybe, but sharecroppers all the same.

Still, from a purely pounds-and-pence point of view, buying property in Japan is not the no-brainer that it would be in England. Land values in the land of the rising sun rarely go up and buildings tend to depreciate in value from their initial asking price of tens or 100s of millions of yen, all the way down to zero after 30 years. What kind of fools were we to consider buying? Here was our thinking:

1. The landlords (a retired couple) were getting on a bit, and it was just a matter of time before they’d sell the rental property we were teaching from or their heirs would, and we’d be forced to move.

2. It ate me up that we had nothing left to show for six years of rent money (sure, renting gave us a place to do business and by renting rather than buying, we were free to move on. But where were we going to move on to? All that rent money had given us a place to do business in — for the moment — but it had bought us nothing for the future. Our lease renewal was coming up. Should we commit to another two years of renting — or find a place to buy?

3. The way to make this work, to my mind, was to find an affordable, slightly rundown Showa-era house that we could teach from until we were ready to retire and sell it to developers to release the value of the land.

4. Over a few months we did find three places that met our criteria, but we came up against a key problem: the real estate agents were better at this game than us. Every time a good place appeared, it was snapped up by the agents themselves to be knocked down and split into two or three plots, releasing the value of the land to the agents’ firms, not to us.

5. We found one place that was really affordable (just ¥10 million!) that hadn’t been reserved by the estate agents but it had a kind of ghost-house feel to it, and when the out-of-town agent tried to hurry us through the buying process, we got cold feet and backed out, thinking he knew something bad that we didn’t¹.

6. Out of the blue, another estate agent contacted us. One of the old houses we’d liked that had been sold to developers was indeed going to be knocked down and converted into two new houses. Would we be interested in buying one of the as-yet-unbuilt houses?²

7. This new house would be on a corner plot, close to a scenic lake, but not in a flood zone, close to supermarkets (with ample parking) and even better was in the target neighbourhood we had long wished we could afford. The developers were going to build a brand new, ready-made house and its layout was just what we would have wanted if we’d had to order-make it ourselves.

8. We were just entering our 50s, getting perilously close to the age where banks would not consider lending us a 25-year mortgage.

9. But we found banks were very happy right then, in the height of COVID-19 to lend us money (a permanent residency card and three years of filed income tax forms opened the bank’s coffers) for less than 1% in interest on a new build. Plus, the government was happy to give us 10 years of mortgage relief (we could deduct the price of the mortgage payments from our taxable income) — plus three extra years because of COVID-19.

10. Still, I was reluctant. Sign up for 25 years of debt? At our age? But maybe this debt represented something more — a chance to break free from forever doffing caps and tugging forelocks? It was do or die time.

So, er…, we do-ed.

We didn’t need telling twice that this kind of opportunity wouldn’t come again for us. Sure, we were going into debt, but we’d be the masters of our destiny, as much as anyone can be, and while it wasn’t a great financial investment, we’d at least have something to show for it — a piece of property, technically our new home, and our freedom to run our business out of it without fear of eviction. That was worth the price of admission to us.³

And let me tell you, three years in, it’s a wonderful, motivating feeling knowing that every single day we work, we own a little bit more the place.⁴

I hope our saga inspires you in your search for self-employed-English-teaching-in-Japan nirvana. Let us know where you are on your journey.

Check out video of the place that we bought here.

Talk to you on Friday,

Patrick

1. We’ve since learned that out-of-town estate agents might be called in when a property is proving hard to sell, for any number of reasons, but ones that spring to mind are the former owner committed suicide in the house, the neighbours are anti-social or the place is structurally unsound.

2. You may detect an anti-real-estate-agent vibe from me. We’ve had good ones and bad ones, but if you are lucky enough to find a good one, he or she can save you a lot of trouble, taking on the tasks that a solicitor would in the UK, guiding you through the labyrinth of paperwork you will have to file with city hall, insurance companies and the bank. Sure, they get a hefty fee, but if ya wanna play, ya gotta pay, as property tycoon Bruce Springsteen says. Our agent found us a good mortgage deal and wasn’t phased by my non-Japanese-ness or our intensions to run an English school from the building — no problem as long as, for mortgage-lending reasons, the place is our official residence.

3. You might legitimately quibble how going into debt for the remainder of much of my life constitutes freedom, but it’s all relative. The freedom to pay for a roof over your head and enjoy its comforts for your (and possibly your children’s) life beats the freedom of paying nothing to sleep on the streets. Ask me again when I’m pushing 80 and have converted the school into an art studio and gallery and I spend my remaining winters painting lake sunsets and summers painting scantily clad ladies whether paying another mortgage was worth it. The jury’s out until then.

4. Oh, and within a month of us moving, the unused road next to our old rented school was connected to the city road grid with new traffic lights which turned it into a busy main road, unsuitable for the momma-tachi to use any more to park their Toyota kiddie-battlecrusiers. Looks like we’d dodged another bullet. Fortune favours the brave? Certainly the independent-minded, so far at least.