1. Start with a clear hypothesis
Every deal should serve a specific objective: cash‑flow, long‑term positioning or a balanced mix. Clarifying this up front will determine how strict you are on GRM, liquidity, renovation scope and financing structure.
2. Filter by station before filtering by price
Instead of browsing random listings, serious investors begin with a shortlist of stations and lines that match their thesis. Only then do they look at what is currently available. This avoids the common trap of chasing discount percentages in structurally weak micro‑markets.
3. Benchmark GRM and rent
For each candidate listing, compute GRM using realistic rent, not the marketing figure. Compare this to the station‑level corridor for the same layout and age. A deal priced outside the corridor is either a trap or a genuine opportunity — both cases require deeper investigation.
4. Check layout, age and size competitiveness
Layout and age determine how attractive the unit is for tenants. In many Tokyo stations, 1K units under 20 years old with efficient plans sit in the heart of demand. Older or poorly planned units need a stronger discount to compensate. Size should be compared to local norms rather than abstract rules of thumb.
5. Assess walk-time positioning and micro-location
Two units with the same "8 minutes to station" label can behave very differently depending on the actual path, slope, safety and retail environment. A good underwriting process cross‑checks the address, maps and street view rather than trusting the portal description blindly.
6. Model conservative downside scenarios
Serious investors always run at least one conservative scenario: lower rent, a few months of vacancy, slightly higher maintenance or repair costs, and a softer exit. If the deal only works at the optimistic base case, it is not truly attractive.
7. Synthesize into a simple decision
At the end, the question is binary: does this asset, at this price, at this station, improve your portfolio or not? A clean memo summarising thesis, station, GRM, rent, risks and exit strategy forces clarity and prevents emotional decisions.