Top Tips for Buying Property in Japan
The Opportunity
As the real estate market evolves with changing circumstances and demographics, the availability of standalone private property continues to grow, offering buyers an increasingly broad range of options.
One of the key advantages of purchasing standing structures is affordability. For those interested in getting the best value, used property’s lower upfront costs free up funds for additional renovations or other investments. Of course, not every property meets everyone’s needs, and this is why due diligence is such an important part of the process.
Targeting the right legacy properties can easily grant access to attractive neighborhoods, which can offer an increased sense of belonging, access to existing infrastructure and a shorter runway to getting settled.
Types and Characteristics of Heritage Houses
In Japan, wooden houses make up a significant portion of stock that is standing, residential and even commercial. Given the esteemed character of these wooden structures, they are often sought by a wide range of buyers.
However, when purchasing heritage property, a buyer must understand the building’s age before entering an offer or risk acquiring something less than optimal.
Seismic safety standards were notably updated in 1981, 2000 and 2009. Now, compliance isn’t required–after all, some properties have been standing for 100+ years, so presumably they’ve done something right–but it is highly recommended to take this into consideration.
Additionally, structural warranties became more common after ‘81, which also factors into a property’s long-term reliability. However, properties with “type-approved” building status can be difficult to renovate, as strict regulations may limit what can be changed or upgraded.
Red Flags When Buying Pre-owned
While some standing stocks are excellent opportunities, others aren’t. Complex building shapes or unnecessary additions, such as large roof balconies, often lead to higher maintenance costs and structural issues. Exterior walls or roofs made of weak materials should also be avoided, as they can require costly repairs. Hidden damage, such as deteriorated pipes or termite infestations, are also common problems in older homes. You may not immediately spot them, but a professional inspector will.
Location, Location, Location
Land is just as critical as the building itself. Weak foundations or precarious situations can negatively affect the value and livability of the home. Reclaimed land is also to be taken very seriously. Top tip: just avoid it.
Social factors must also be considered. Check for nearby vacant homes or problematic neighbors, as either can impact the property’s appeal. What may seem like a dream house on paper can end up being a nightmare in reality, which is obviously a situation to avoid.
Flooding and landslides are possible, especially with poorly administered properties, so be wary of underground garages or retaining walls.
There’s also the matter of public and private roads, the latter of which can cause access issues to a property situated on one.
Expert Consultation
Engaging professionals, such as carpenters or inspectors, for detailed examinations is highly recommended. These experts can identify hidden defects that you may miss, such as structural weaknesses or areas in need of repair. A professional’s input will prevent costly mistakes and ensure that you are making an informed decision on the purchase.
Increasing Value Through Renovation
For many buyers, the merits of buying existing property over new is to spend on renovations–such as energy efficiency or structural improvements–versus construction. Prioritizing renovation costs and focusing on the most critical areas will ensure that the investment adds value to the property without overspending on unnecessary upgrades.
Conclusion
Sourcing leads, running due diligence and astutely acquiring existing property requires careful consideration and engaging third party providers, which adds up-front costs, but when done correctly can yield considerable rewards. By consulting experts, thoroughly evaluating the property and considering future renovation opportunities, buyers can secure quality properties that fit their budget and lifestyle while offering long-term value and satisfaction.
About the Author
Matt Ketchum is the founder of Akiyaz, specializing in rural exploration, alternative lifestyles, and akiya, or “empty house” solutions. He also advises The Delphi Network, Centrum and Hello xLab on creative strategy and business development.
Toshihiko Yamamoto is the founder and lead broker at ’Yamamoto Property Advisory’, a real estate brokerage firm based in Tokyo. With extensive experience in high-end properties, he specializes in serving foreign investors and offers in-depth knowledge of both urban luxury markets and rural revitalization projects in Japan.