Akiya (abandoned house) for sale, 50 mins from Tokyo : Is it really a good investment ?

* Foreigners can buy a property in Japan without having special qualification.

Japan has too many houses and there are more than 8 million empty houses/rooms here (which accounts for 13% of total number of properties).  Houses that are not used for a long time is called ‘akiya’ (空き家) in Japanese or ‘Empty house’ .Some home owners are virtually sitting on the empty houses doing nothing due to various reasons. And more and more individual investors are paying attention to this akiya market. 
In the light of Suruga bank scandal, Japanese banks are generally tightening their lending stance for the individuals investors.
Their business with institutional investors, of course,  are as usual but individuals investors are facing more challenging situation.
I am beginning to see more bogus-like hyperbole ads by rogue agents to lure the naive investors.
Please be careful and skirt such dangerous investment.
Individual investors are, in fact, shifting their eyes more towards akiya investment (abandoned house) because akiya investment does not require the large cash payment and offer the relatively attractive yield (return) . We recently spotted the following two properties in Chiba prefecture (Chiba prefecture is right next to Tokyo Metropolitan)  and are happy to share the information with you.

1.Property in Chiba city in Chiba prefecture

 

Location : Inage-ku, Chiba city, Chiba prefecture
Nearest station : Sports center station, Chiba mono-rail 3km (38 min walk)
It is only 50 mins drive from Tokyo station

 

Land : 77 m2
Building : 54m2,  3 tatami rooms and kitchen
2 storeys,  wood structure
Built : 1976
Price of property: 2.5 million yen (U$25,000)
Renovation cost : 3.2 million yen (U$32,000)
Transaction cost : 300,000 yen (U$3,000)
Service fee (consultation) : 800,000 yen (U$8,000)
Total : 6.8 million yen (U$68,000)
Rent : 58,000 yen per month
Gross yield on property price (incl. renovation cost) : 12.65% (before property management cost)                                                                                                      Gross yield on total initial investment : 10.24 % (before property management cost)
*  It is a full turn key deal.

2.Property in Mobara city in Chiba Prefecture

Location : Togo, Mobara city, Chiba prefecture
Nearest station : JR Shin-Mobara station (3km, 38 min walk)
It is about 80 mins drive from Tokyo station and 25 min to the nice and local beach.

Land : 126 m2
Building : 55m2,  4 rooms and 1 kitchen
2 storeys,  wood structure
Built : 1974
Price of property  : 3 million yen (U$30,000)
Renovation cost : 2.5 million yen (U$25,000)
Transaction cost : 400,000 yen (U$4,000)
Service fee (consultation) : 800,000 yen (U$8,000)
Total : 6.7 million yen (U$67,000)
Rent : 56,000 yen per month
 Gross yield on property price (incl. renovation cost) : 12.21% (before property management cost)                                                                                                       Gross yield on total initial investment : 10.03 % (before property management cost)
*  It is a full turn key deal.
Final thought
In Japan in terms of the macro view,  you have to understand that akiya investment is
a uphill battle. The property is abandoned most certainly because the rent demand is scarce.
However even in local areas,  it is still possible to address the risk by limiting the locations where the population is not increasing so dramatically
or places where a large factory is situated. As more investors are turning to akiya investment, t
he market of akiya is getting tighter. The yield of conventional investment such as residential buildings or condo units is also more so (yield is getting lower).
These two properties are not necessarily ideal but compared to the properties in Tokyo central areas, the price is dramatically affordable (and Chiba city is only 
50 min drive away from center of Tokyo)
Akiya market is very unconventional and if you keep watching, you should be able to
find a pretty good deal. 
We have some more listings and if you are interested, please let us know via contact us.
Other helpful Articles

The lure of Japan’s hidden treasures : Why are so many houses abandoned in Japan ?
1.5 hour by car from the center of Tokyo, enjoy the magnificent ocean view adjacent to Pacific Ocean: Unspoiled real estate opportunities in Kamogawa
You want to flip akiya (abandoned house, 空き家) into a rental property in Japan ? : Please do the math first

(Our YouTube Channel about akiya)

Consultation service
Spot consultation is available for those who are interested in buying an old Japanese property.
Spot consultation fee starts from 50,000 yen per two hours (plus tax). Consultation over Internet telephone is  possible for those who are distant from Tokyo.
If you are seriously interested in buying akiya, please contact us. Consultation fee starts from 50,000 yen per two hours (plus tax). We provide the following consulting service for akiya investment as well.
1) Akiya search service
100,000 yen (plus tax) per project. We will look for an appropriate akiya for you.
It requires time consuming process.
Finding a good akiya is not as easy as you might think.
If you buy a wrong property in a wrong location, your investment could be a disaster.
We will not search akiya for free.

 2) Contract support
   300,000 yen + tax per one property
  After you find a good akiya, you need to go through
  all the transactions including due diligence, making purchase contract, tax, title registration, finding a builder      to renovate, finding a property manager, promote your property for leasing (if you want to rent out) etc
  All the relevant documents are in Japanese.
  We support the process.
 If you are seriously interested in buying a Japanese old house, please contact us.

Toshihiko Yamamoto

Real estate investing consultant and author.
Toshihiko’s book, “The Savvy Foreign Investor’s Guide to Japanese Properties: How to Expertly Buy, Manage and Sell Real Estate in Japan”
is now out on Amazon, iBooks (iTunes, Apple) and Google Play.

About the book
Founder of Yamamoto Property Advisory in Tokyo.
International property Investment consultant and licensed
real estate broker (Japan).
He serves the foreign companies and individuals to buy and sell
the real estates in Japan as well as own homes.
He holds a Bachelor’s degree in Economics from
Osaka Prefecture University in Japan
and an MBA from Bond University in Australia
Amazon.com Link

 

 

 

 

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