Introducing MnK Real Estate
Eddie Guillemette first came to Niseko as tourist before falling in love with the area and the community and deciding to move here to start a property development business.
Click here to view all the listings from MnK on UchiJapan.com or read the article below learn more about Eddie's journey and his top tips for investors.
What is your background and experience in the real estate market in Japan?
We have been investing in Niseko real estate since 2004. It started with a purchase of a studio apartment in Hirafu Village while I was working for an investment bank. Since then, I have left that world to become a property developer.
With my team at MnK Real Estate, we were involved with over 80 projects in 2 housing communities, Country Resort and The Orchards Niseko, we were involved with a serviced apartment building in Hirafu, Akazora, and have recently launched a new housing development in Niseko town called Takeo Drive.
To provide a better customer experience, we also have a property management company, 2 restaurants, staff accommodation, a land bank for future development, and are a proud part of the EdVenture Niseko kids' camp.
What’s your ‘story’?
I first visited Niseko in 2001 with a group of skiing and snowboarding friends while living in Hong Kong. It was a different place back then, an antidote to hectic life experiences in a crowded city. I kept visiting every year and each time I left, I wanted to stay for longer. After I left banking, I moved to Niseko full-time and decided to pursue a second career in real estate.
What do you love most about Niseko and the surrounding area?
I love the variety that Niseko offers. There is a diverse group of people, from Hokkaido, Honshu, and abroad, there are many real estate investment and development options to pursue, and there is an amazing variety of food, activities, and 4 distinct seasons. I also enjoy being active and in nature, which Niseko has in abundance.
What qualities makes a good real estate agent?
Honesty and knowledge are the two most important qualities we look for in an agent. Persistence and creativity are helpful as well but come after those two.
What has been your favourite selling experience or greatest project to work on?
I have learned and enjoyed each project. The Orchards Niseko was fulfilling having seen it from scratch, with the support of many caring owners, and then seeing it through to the completion of 38 homes with a clubhouse, restaurant, and green spaces for people to enjoy.
What’s the hardest part about your job? And what is the easiest?
The hardest part about my job is time management. There are many people and projects that I want to spend time with, but there are only so many hours in the day.
The easiest part is going to work every day. I enjoy what I do, the people that I work with, and the improved, work-life balance.
What makes your market of Niseko attractive to investors?
I think there are a number of reasons Niseko is attractive to investors. For many people, this is an investment they can enjoy. Most of our owners visit their property once or twice a year, usually in the busy winter period and increasingly more people are coming during the green season.
Niseko’s real estate market has, for the most part, appreciated and as it is generally priced below that of comparable ski destinations around the world and most capital cities in Asia, it offers the potential for future growth. There are a wide variety of real estate investment options, you can buy land, a house, an apartment at low, medium, and high prices.
Lastly, I sometimes forget to add that nearly all property in Niseko is freehold title, there are relatively few restrictions on foreign investors purchasing, and the costs of owning a property are relatively low.
What is the most exciting thing coming to Niseko in the near future?
I am excited to welcome back our friends and our guests from overseas who have not been able to visit Niseko. Beyond that, I am looking forward to the continued infrastructure improvements on the mountain (better ski lifts, new trails, etc.), the long-awaited arrival of the Shinkansen (bullet train), the expansion of the highway to Kutchan, and the new restaurants that always pop up.
Where do the opportunities lie in Niseko at the moment?
We see opportunities in those developing areas that are a short drive from the main ski areas. There will always be a premium to pay for convenience, but when the land premium is 3 times and sometimes 10 times more expensive for a 10-15 minute drive, there is an opportunity. When we assess the market, we ask ourselves - will US$750,000 spent on a parcel of land that is a 2-minute drive to the ski lift double in value before or after a similar parcel of land that costs US$250,000 that is 10 minutes away. The building itself will depreciate at the same rate, regardless of the location. Our experience in Niseko has taught us that the tide usually lifts all boats (land values), but those that are more reasonably priced tend to accelerate faster and decline less.
What needs and wants do your clients have that might differ from other areas of the world?
For the most part, I think investors in Niseko have similar basic needs and wants – price appreciation, quality construction, sensible regulations and good management of their asset. The areas we occasionally see differences are with the building regulations, zoning requirements, and the importation of materials from outside of Japan. For example, Japan has strict fire and snow clearing regulations that require ample space between buildings, interior finishes that meet Japan fire rating standards, and expensive fire alarm systems need to be installed in rental properties.
The Next Few Years
How has the real estate market held up through the pandemic?
The market as a whole has slowed down since the pandemic. The new, luxury apartment sales have probably been hit the hardest as that is the area with the most amount of new supply. A number of apartment projects have been delayed. Land sales have continued as have sales of properties in our managed communities (Country Resort and The Orchards Niseko), albeit at a slower rate than normal. We have been able to close transactions with investors who have been to Niseko, stayed in our properties, and who were comfortable with the value they were getting.
What changes has it caused?
The pandemic has changed the due diligence process for some. Certain investors are now comfortable with virtual and video walk through tours as opposed to being here in person to purchase a property. We have also had to rely more on our online presence rather than generating interest in real estate from people who are in Niseko in person.
What changes do you foresee in the real estate market once borders reopen?
I don’t think there will be many drastic changes but there could be more buying of standalone homes in the value-orientated segments of the market once the border reopens. I think living or staying in crowded apartments may not be as attractive in the pre-Covid era.
Do you think the needs and wants of your clients have changed due to the pandemic?
There are some clients that may no longer want to be in apartments or crowded areas as often. There may also be more investors who are considering having a permanent residence in Japan given the travel constraints.
What exciting charges are coming to Niseko in the next few years?
I think Niseko will continue to evolve and grow in a more institutional way in the main ski areas. We will see more branded hotels and perhaps more businesses set up here on a year-round basis. As the institutions come in, I think there will be opportunities in the underinvested areas, a few kilometers away, that maintain that original Niseko feeling of being in a rustic, nature-filled part of Japan.
Your Tips For Investors
What are a few crucial things to consider for a foreigner looking to invest in Japan?
At the investment stage, it is crucial to be clear about your investment goals – is it a short or long term holding, is your preference for current yield or long term capital appreciation, etc. Real estate in Japan is a little different to other markets in that the domestic investors generally have different specifications and location preferences than foreign investors. It is important to understand these differences.
Another crucial thing to consider when investing in Japan is to find a good property manager. The language barriers are high and when investing in places like Niseko, nature can be harsh so you need proactive management to ensure your asset holds its value.
What are the mistakes to avoid when investing in Japan from abroad?
The single biggest mistake we see is not researching why a property appears to be cheap. There are certainly times when you can uncover value, but there are many more times that a property is cheap due to an issue - be it with future development, zoning, management, or some combination of challenges that are not apparent at first glance.
Do you have any properties available now that are particularly unique or exciting?
We are excited about our latest development, Takeo Drive, in the Arishima village of Niseko town. It is a land development located a short drive from Hirafu and Niseko Village that has views of Mt. Yotei and Mt. Annupuri. The neighborhood is next to the Takeo Arishima memorial museum as well as a local coffee shop, restaurants, and other artisanal Japanese businesses. We are selling land plots at a fraction of the prices near the mountain and we can provide a full suite of services to investors - the land sale, construction of a house, and property management thereafter.
Any other tips or comments for people visiting UchiJapan.com?
We recommend doing your research and trying to develop a relationship with your service providers (real estate agent, property manager, etc.) so they can better understand you and you understand them.