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costs involved in renovating an old kominnka farmhouse

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  • costs involved in renovating an old kominnka farmhouse

    Just curious. I've got enough money that I could buy a renovated kominnka in a few years if the currency rates ever go back to normal, and I've been with a j-girl for 2 years and I'm starting to wonder if I'm going to be here permanently. Assuming I'm working from home and i had a somewhat rural kominnka what expenses are we looking at for renovations? and how much do people usually put into a project like this? I've heard people who do these renovations can make 80% profits on resale, which makes me think that it won't cost much at all to buy the house initially, and the renovations shouldn't be too bad either. Or am I totally off base? let's assume my absolute maximum is $150,000 and the currency rates have returned to something more reasonable.

  • #2
    Originally posted by theadamie View Post
    Just curious. I've got enough money that I could buy a renovated kominnka in a few years if the currency rates ever go back to normal, and I've been with a j-girl for 2 years and I'm starting to wonder if I'm going to be here permanently. Assuming I'm working from home and i had a somewhat rural kominnka what expenses are we looking at for renovations? and how much do people usually put into a project like this? I've heard people who do these renovations can make 80% profits on resale, which makes me think that it won't cost much at all to buy the house initially, and the renovations shouldn't be too bad either. Or am I totally off base? let's assume my absolute maximum is $150,000 and the currency rates have returned to something more reasonable.

    http://online.wsj.com/article/SB1000...214680736.html


    COMMERCIAL REAL ESTATE Updated November 6, 2012, 3:32 p.m. ET
    Foreigners Go Bargain-Hunting for Tokyo Property

    By WILLIAM SPOSATO

    TOKYO\
    Canadian Markus Leach figures he has gotten a bargain.


    Canadian Markus Leach, left, bought an ocean-view property 90 minutes by train from Tokyo and added a house shipped from Canada, below.

    Having left the confines of the world's most-crowded metropolis two years ago, he now lives a 90-minute train ride away in a 3,000-square-foot house sitting on a pristine acre of land overlooking the Pacific Ocean.

    The cost? Less than $500,000.

    "Such a property would be at least $2 million or more back home in Vancouver," said the 53-year-old executive recruiter. In Tokyo, a new condominium, at 760 square feet, sold for an average of $515,000 in September, according to the Land Institute of Japan.

    This seeming bargain is no fluke. While Tokyo keeps its mantle of being the world's most expensive city, a steady migration to urban centers and the country's long-term population decline have left swaths of property that can be had for a pittance by international standards.


    Mr. Leach bought his property in 2003 for \13 million (equal to about $120,000 at the time, now about $163,000). He then shipped over a red-cedar log house from Canada for $160,000, with the rest going for construction and landscaping.

    Bargains like this have proved to be powerful motivators for some foreigners who are willing to deal with the potential pitfalls awaiting anyone dabbling in a foreign country's property market.

    On paper, property ownership in Japan is simple. There are no nationality or residency requirements. Title is transferred at the local municipal office, eliminating any need for title searches or title insurance. And closing costs are just 3% to 5% of the purchase price, according to brokers.

    But as everywhere, there may be hidden risks. Only after buying, Mr. Leach found out that no permission had been given to build on the site, even though a house had been there previously. Gaining the required local government approval took two years, a period he describes as "a little scary," but consent was finally given. Construction was a breeze, he said, and Mr. Leach and his Japanese wife are happily ensconced, enjoying the view.

    The dilemma for owners like Mr. Leach, however, is that while they may have found bargain properties, the dismal state of Japan's property market makes it tricky to turn a profit. Outside of the big cities, land prices have been falling steadily over the past 20 years, and homes are viewed with little emotional attachment. Anything more than 25 years old is fully depreciated and largely considered worthless by Japanese buyers.

    That didn't deter British copywriter David Beeton, who determined that "really old places can't lose any more value."

    In 2006, he purchased a 200-year-old thatched-roof house and outlying buildings about an hour from Tokyo that had been the home of a bishop for \20 million. After another \5 million, or about $62,500, in renovations and a fair amount of sweat equity, he was able to sell it in 2011 for \35 million.

    But he said that such a home wouldn't appeal to the average Japanese family. "I found a Japanese couple who had lived for five years overseas," he said.

    Other foreign investors are taking a more traditional approach to investing in Japan's property market, that is, buying a condo in an urban area with a management company to handle any issues. The chance for an income stream of 5% to 10% on the investment backed by a strong legal system have made it popular with investors from elsewhere in Asia.

    One such buyer is Julia Chang of Taiwan. She and her husband have purchased two apartments in central Tokyo. "My husband likes Japan and he always had a dream to buy property here since he was a child. Also, both of my children are fans of Japanese culture," the 48-year-old said.

    While she said they were attracted by the fact that rental returns are usually 5% and above, compared with just 2% in Taiwan, they aren't leasing either property, instead using them on their frequent trips to Tokyo.

    "My husband wants to buy another one for renting out. Then, we'll use the rent money to pay for the management fees on these two," she said.

    For those looking for real bargains, there even is an English-language website dedicated to foreclosed properties in Tokyo and some other areas that are available via court-sponsored auctions.

    The site, www.sleepwellhomes.jp, notes that there are more than seven properties foreclosed on every day in Tokyo. Prices, reckons founder Edward Perkich, are 30% below the market level.

    Write to William Sposato at william.sposato@dowjones.com

    A version of this article appeared November 7, 2012, on page C11 in the U.S. edition of The Wall Street Journal, with the headline: Foreigners Go Bargain-Hunting in Tokyo.

    Comment


    • #3
      ^this is a little different than what I had in mind. I was wondering, if someone has done this what are the costs. new wiring, re-staining the wood, new light fixtures, laying down hard wood floors to replace tatami "I would", new bathroom fixtures, new windows? new plumbing? how can you make an old house more insulated? etc.

      Comment


      • #4
        I would say that you will need to spend about 10 million on renovation. I don't think you will even close to break even if you sell. Sorry but that's the hard truth. If your dream is to live in such a place then fine it doesn't matter. I would rent somewhere for a while to make sure it's what you really want.

        Comment


        • #5
          Originally posted by Brown Cow View Post
          I would say that you will need to spend about 10 million on renovation. I don't think you will even close to break even if you sell. Sorry but that's the hard truth. If your dream is to live in such a place then fine it doesn't matter. I would rent somewhere for a while to make sure it's what you really want.
          Good advice............

          Comment


          • #6
            OP......

            The material costs will all depend upon what you select. You can buy a nice looking but low grade kitchen replacement set at a DIY store for close to 1mY – but you will pay closer to 4mY if you go with the top end offerings of the brand names. Windows and doors, bath, toilets, light fixtures – will all be approximately the same ratio.

            I recommend that you do your research yourself, telling the suppliers that you will do all of the work yourself – so that they quote you the best prices. You should be getting closer to 75% off of list (doors & windows) – while a builder will initially only offer 25% off of list. With known costs in hand, you can approach a builder and negotiate your best overall cost.

            With all of what you want to do, Ifd plan on it taking at least 6 months with a builder – and if done entirely on your own – it will take over two years, a divorce, etc. – and still wonft be completed when you give up. Of course you can reserve some of the work for yourself so that you are on-site while the work is being done, and thus in a position to check on quality, etc.

            We renovated two 8-mat rooms and added a 20+ mat room, hardwood floors, new electric, high-end fold-out patio door, sealed double pane windows, very nice doors (7), insulation, etc., for 6mY to the builder inclusive of the materials. I did all of the deconstruction (removing all that was not load-bearing structural) of the two renovated rooms and lent a hand where I could.

            The rest of the house I did myself – insulation (attic), converted one of the tatami mat rooms into a hardwood floor bedroom complete with cedar lined clothes closets to replace the futon closets, remodeled the toilet and bath, pulled new electric, replumbed, external painted, and did all of the cosmetic items such as shoji and fusuma. I did these first, as we obtained estimates on the rest. The whole project took over a year.

            We chose high end brand name kitchen and bath/toilet fixtures and paid close to 4mY and 2mY on each. The new septic tank system was just over 1mY.

            The result – a new home in the countryside, and still happily married. Of course if we ever need to sell - nothing will be recouped (except the marriage).

            Comment


            • #7
              Originally posted by TJrandom View Post
              OP......

              The material costs will all depend upon what you select. You can buy a nice looking but low grade kitchen replacement set at a DIY store for close to 1mY – but you will pay closer to 4mY if you go with the top end offerings of the brand names. Windows and doors, bath, toilets, light fixtures – will all be approximately the same ratio.

              I recommend that you do your research yourself, telling the suppliers that you will do all of the work yourself – so that they quote you the best prices. You should be getting closer to 75% off of list (doors & windows) – while a builder will initially only offer 25% off of list. With known costs in hand, you can approach a builder and negotiate your best overall cost.

              With all of what you want to do, Ifd plan on it taking at least 6 months with a builder – and if done entirely on your own – it will take over two years, a divorce, etc. – and still wonft be completed when you give up. Of course you can reserve some of the work for yourself so that you are on-site while the work is being done, and thus in a position to check on quality, etc.

              We renovated two 8-mat rooms and added a 20+ mat room, hardwood floors, new electric, high-end fold-out patio door, sealed double pane windows, very nice doors (7), insulation, etc., for 6mY to the builder inclusive of the materials. I did all of the deconstruction (removing all that was not load-bearing structural) of the two renovated rooms and lent a hand where I could.

              The rest of the house I did myself – insulation (attic), converted one of the tatami mat rooms into a hardwood floor bedroom complete with cedar lined clothes closets to replace the futon closets, remodeled the toilet and bath, pulled new electric, replumbed, external painted, and did all of the cosmetic items such as shoji and fusuma. I did these first, as we obtained estimates on the rest. The whole project took over a year.

              We chose high end brand name kitchen and bath/toilet fixtures and paid close to 4mY and 2mY on each. The new septic tank system was just over 1mY.

              The result – a new home in the countryside, and still happily married. Of course if we ever need to sell - nothing will be recouped (except the marriage).
              awesome advice, thanks. I can't believe that people wouldn't be interested in renovated houses, isn't there a company in Kyoto that does just that? I thought I read somewhere that if done well a renovated traditional house could fetch an 80% profit. This idea is still years away, it's just something I was thinking about. How hard is it to keep these old houses warm and cool after you add the insulation? 70% as good as a modern american house? Another thing I read that may or may not be exaggerated is that these old houses can be moved, and it's not ridiculously hard due to the way they're built. Have you ever heard that? apparently these people renovated a house somewhere out in the country and some Okane-mochi bought it and moved it to Tokyo..

              Comment


              • #8
                Originally posted by theadamie View Post
                ^this is a little different than what I had in mind. I was wondering, if someone has done this what are the costs. new wiring, re-staining the wood, new light fixtures, laying down hard wood floors to replace tatami "I would", new bathroom fixtures, new windows? new plumbing? how can you make an old house more insulated? etc.
                Actually, I meant to refer you to just this part of the article:

                ...

                The dilemma for owners like Mr. Leach, however, is that while they may have found bargain properties, the dismal state of Japan's property market makes it tricky to turn a profit. Outside of the big cities, land prices have been falling steadily over the past 20 years, and homes are viewed with little emotional attachment. Anything more than 25 years old is fully depreciated and largely considered worthless by Japanese buyers.

                That didn't deter British copywriter David Beeton, who determined that "really old places can't lose any more value."

                In 2006, he purchased a 200-year-old thatched-roof house and outlying buildings about an hour from Tokyo that had been the home of a bishop for \20 million. After another \5 million, or about $62,500, in renovations and a fair amount of sweat equity, he was able to sell it in 2011 for \35 million.

                But he said that such a home wouldn't appeal to the average Japanese family. "I found a Japanese couple who had lived for five years overseas," he said.
                ...
                And, David Beeton has a blog where he writes:

                http://blog.alex-x.com/2011/12/kominka.html

                2011”N12ŒŽ13“ú
                Kominka*


                I love old stuff: classic cars, antique furniture, vintage guitars and basses, surfboards..., but I harbor a particular love for historic buildings. Living in Tokyo, though many ancient temples and shrines have survived, there really arenft many well-built ancient private houses left that would be in my price range! A great many were destroyed during the Great Kanto Earthquake in 1923, with the firebombing of Tokyo during WW2 serving to reduce the stock still further!

                I decided to buy something in the countryside as kominka are reasonably priced and more readily available. Though they do appear to have a dedicated, albeit small following, itfs really rather unfortunate that many of these beautiful cultural assets, lovingly created by the master craftsmen of yesteryear, are falling into a state disrepair and being lost. Itfs not uncommon around the Boso area to see clutches of these ancient, seemingly disused buildings surrounding a modern tasteless monstrosity! What has happened to the average personfs aesthetic sense?

                Ideally, I wanted a kominka in self-contained tree ringed compound with the main house, a gatehouse, and a range of other outbuildings with no nearby neighbors, and NO monstrosity! I wanted to be able to make noise without bothering anyone. Though Kominka do come onto the market from time to time, very rarely do they check all the boxes on my list. Being a surfer, I was also looking to be as close to the ocean as possible. I wanted it all. Many of the kominka I went to see were dark, dingy and damp. Sensibly, from the farmerfs point of view, they are often built on the least arable land against hillsides with rice paddies spreading out in front. It took almost five years of searching before finally finding and settling on one in a tiny hamlet in the middle of the Boso peninsula. Itfs about a 25 minute drive to the waves and has a couple of fairly close neighbors, but other than that, it is absolutely perfect. It consists of the main house, a gatehouse (nagaiyamon), outside bathroom and a single story modern structure that I lived in while restoring the ancient buildings. Sadly, a stone built storehouse (soko) had been demolished to make way for this. Thankfully, it is an inoffensive, well-built structure that I was able to camouflage to blend in with the rest of the site.

                Another reason I fell in love with it is that it had never been irreversibly erestoredf. The doma area, rather than having been concreted, as is quite common, still has its original earthen floor. Except for two of the back rooms whose original ceiling joists and wattle and daub type walls had been covered in 70s Formica type facing, the whole property was pretty much as it had been when first built. (When I removed the Formica, the hidden timbers were in remarkable condition and needed very little attention.)

                It had been built by the vendors great grandfather during the Edo-Period (1603 to 1867). Though the house is about 180 years old, he spent ten years collecting the timber to build it with. Being secondhand, my guess is that much of the timber he collected was taken from homes built perhaps hundreds of years before. After the vendors spouse passed away some years ago (the last in line of the local Kanushi**), she built a modern home nearby, but kept a fairly close eye on the Kominka. It was used for rental purposes for a number of years (the last renter was an NHK announcer) before finally being put on the market.

                I guess most of us feel a range of emotions when we move house; a combination of excitement at the prospect of a new environment, and sadness at leaving the place where so much has happened and been experienced. These feelings are intensified somewhat when we get older as we have perhaps brought our children up in a particular home. For a number of reasons, I reluctantly put my precious kominka on the market about 18 months ago. It was finally sold a few weeks ago to a couple who, amazingly, live a two minute walk from my home in Tokyo! My hope is that they will continue to love and restore it with at least the same level of dedication as I have given it. I would also like future generations to be instilled with a greater sense of admiration for their ancestors achievements. I would like them to appreciate the beauty of these buildings and value them as part of their heritage.

                *Kominka - Traditional Japanese House
                **Shinto priest

                David

                Also,

                Minka Revival Association Homepage: http://www.minka.or.jp/top/index_e.html

                Japan Property Central on Minka: http://japanpropertycentral.com/trad...omes/for-sale/

                - which provides links to these sites listing properties out in the country for sale:
                * http://www.inakakurashi.jp/
                * http://www.inakanet.jp/
                * http://inaka.suumo.jp/
                * http://resort-bukken.com/english

                Minka International: http://www.minka-intl.com/index.html

                Article - Property overseas: On a mission to save the Japanese minka: http://www.telegraph.co.uk/property/...ese-minka.html

                Article -Japanfs Forsaken Homes Restored to Historic Styles Yield 80%: http://www.businessweek.com/news/201...eld-80-percent

                Comment


                • #9
                  Originally posted by NorthByNorthwest View Post
                  Actually, I meant to refer you to just this part of the article:



                  And, David Beeton has a blog where he writes:

                  http://blog.alex-x.com/2011/12/kominka.html




                  Also,

                  Minka Revival Association Homepage: http://www.minka.or.jp/top/index_e.html

                  Japan Property Central on Minka: http://japanpropertycentral.com/trad...omes/for-sale/

                  - which provides links to these sites listing properties out in the country for sale:
                  * http://www.inakakurashi.jp/
                  * http://www.inakanet.jp/
                  * http://inaka.suumo.jp/
                  * http://resort-bukken.com/english

                  Minka International: http://www.minka-intl.com/index.html

                  Article - Property overseas: On a mission to save the Japanese minka: http://www.telegraph.co.uk/property/...ese-minka.html

                  Article -Japanfs Forsaken Homes Restored to Historic Styles Yield 80%: http://www.businessweek.com/news/201...eld-80-percent
                  awesome, thanks a lot!

                  Comment


                  • #10
                    Originally posted by TJrandom View Post
                    OP......
                    ... new home in the countryside, and still happily married. Of course if we ever need to sell - nothing will be recouped (except the marriage).
                    That's an awful lot to be thankful for. I think you're way, way, way on the plus side however you figure it.

                    Comment

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