We have been shifting and twisting and trying to adjust to a comfortable lifestyle under COVID-19. Part of that has meant getting away, even moving from crowded cities into more spacious areas. And for quite a few, Japan’s countryside has become more and more appealing. Imagine for a moment, retiring with Japan’s fresh air, greenery, rivers. Or that ideal environment to raise a family. Or imagine for a moment to generate an income on short-term rentals taking advantage of the country’s back on track campaign to boost tourism. Let’s look at how to make this dream more realistic.
DIY Restoration vs Move-In Renovated
Abandoned properties have taken the limelight recently because of their affordability and countryside location. One couple from Alaska, with home-building and restoration skills, had a fascination with by the beauty and detail of traditional Japanese timber work and craftsmanship. They had dreamt of using their home-building skills to restore an old, traditional kominka style (large stand-alone) home for a place to settle in for retirement. Ideally, they wanted an akiya or abandoned property for no more than about USD$20K, but weren’t sure if their budget and plan was realistic.
When purchasing abandoned homes, the three points of consideration are price, costs and inspection. Given this couple’s background, certainly, their retirement dream is very much achievable. Price-wise however, $20K could be a little under the mark. Realistically, a property that wouldn’t require substantial work would be no less than $50K. And, generally, renovation costs could amount to between $50K and $100K. Because of their DIY skills, the advantage they’d have is to be able to explore some of the affordable, older, run-down houses in the smaller towns and villages of the beautiful countryside. They would have to have an assessment on the property of interest, to confirm if the land and soil are safe to build on, as well as an inspection on the structure for its condition. The cost for the ground inspection would be around $500 with structural inspection approximately $1,500.
Of course, not everyone is a DIY expert. It is possible to find renovated, two storey houses with five to six rooms at incredibly affordable prices, some as low as $65K.
Either way, keep in mind you would probably need a car because the distance to the nearest station would not be within comfortable walking distance.
Generating an Income
You could use your countryside property as your own getaway. Or, you could use it to generate an income and if that’s what you have in mind, the challenge is not renting out the property, but the approvals and licencing to be able to rent it out. Here’s how it works. To rent out your property, you have two choices, minpaku (short term rentals of under a month), or longer term standard leases of over one month. Although short-term rentals can generate more income, they involve compliance of zoning approvals from the ward, plus possibly a hospitality license. In addition, stays of less than one month require staff to be available to respond to any urgent matters 24/7, normally within 15 to 30 minutes distance of the property. This means staff would need to be hired in most cases as short-term stay management companies are pretty much non-existent in rural areas.
If on the other hand, you are purchasing a property which already has been approved for a short-term license then all that would be required is a local judicial scrivener to confirm the approval and advise what needs to be done to bring the property up to compliance. The approximate cost for the scrivener is $180 to $260. Keep in mind that each prefecture and local municipality has its own regulations. Take for example, a traditional 100 year old farmhouse on a plot of land of 2,500 sqm, with 6 bedrooms plus living, dining room and kitchen in a remote area of Hyogo, an hour away from Osaka. This property was approved with a hospitality license with the potential to generate approximately $100/night for a double room. Quite profitable if you do come across it.
If you do not come across and “approved” property, then, to avoid having to jump through the time-consuming and expensive hoops of the short term Airbnb style rentals, the option with the least amount of hassle is to rent out the property on a longer term “standard” tenancy lease with stays of over a month.
With careful planning, vacation houses can be a viable way to earn extra income year round, or seasonally. Perhaps consider advertising the property as a “countryside experience” to appeal to international tourists, artists, businesses for corporate retreats, and general vacationers.
Ski Guest House
Countryside is not the only home away from home Japan has to offer. Ski resorts can be very appealing with ski lifts, onsen, pool, and other amenities. The question is where to you purchase or build it – on a resort-serviced property, or outside of the resort?
It sounds logical to consider a building or purchasing a guest house on a resort-serviced property. But, don’t waste your time thinking about it. Guest houses cannot be built or used on resort land because, similar to co-owned buildings, resort-serviced properties have an owner union which often do not allow monthly or long term rentals. Nor do they allow the stay of anyone aside from property owners and their friends and families.
If a guesthouse is your goal in a resort environment, the approach to take would be to find a free-standing parcel, not on a serviced resort, but close to a resort, approximately one to three km away. Perhaps a two storey home with three to four rooms. Prices would be approximately $130K to $526K. Alternatively, you could consider clearing the area to develop a log or pre-fabricated cabin for personal use for family and friends. Keep in mind, there could be restrictions in terms of the structure, materials, colour, access to resort facilities and other benefits.
The monthly service fee would be approximately a nominal $350/year for the land which would cover gas, electricity and hydro to the property line via the resort’s infrastructure. This fee would increase once a structure is developed. The fee generally covers management of the resort and use of various facilities such as discounted prices for the pool, onsen, ski lift, reception for deliveries, ski equipment storage room, etc.
With vaccines and the resumption of travel, Japan relaunched its tourism, campaign to meet an ambitious goal of welcoming 60 million overseas visitors by 2030. This time not all tourists will be looking for the hotel scene with amenities but, instead a home away from home beyond crowded cities with a desire to connect to nature, explore traditions, enjoy cuisine, and find relaxation. There is no question the demand of tourists is there to generate an income.
Once upon a time, a countryside or slope side property might have been a pipe dream, but today it is a new direction.