My partner and I (JP national/PR holder) have been living in a rental 2LDK at 210k/mo for 3 years. We both have permanent jobs in Tokyo, and we’ve been casually considering purchasing either a house or condo sometime in the next year.
Initially, we were more interested in buying or building a standalone house. We don’t have children, but it’s still a possibility so we may need more space. We also personally prefer the idea of having a house rather than a condo for our permanent home.
After looking at a few properties with realtors, we’ve been impressed with the secondhand condos on the market. There are some nicely renovated 20~30-year-old rooms close to the station in popular neighborhoods with monthly payments lower or equal to our current rent (with maintenance fees etc. included). Obviously that doesn’t include the fees of buying (and eventually selling) the property, but they’re starting to look really attractive compared to continuing to pay rent for a smaller property in a less comfortable part of town.
We’ve been talking about buying one of these used condos and then revisiting the standalone house market in a few years, but I wonder how advisable this is. There’s no guarantee an already 30 y.o. property will sell in a decade. Also, I’m already 40 years old myself, so I’d be looking at financing that standalone house near 50.
Would be grateful to hear any advice or similar experiences.
by fromthe075
2 comments
I have been trying to come up with a list of pros and cons (specifically of used condos) since I’m in a somewhat similar situation to you. Here is what I have so far from my research about it.
Pros:
– Own the place, I can do (mostly) whatever I want to it.
– Older condos tend to be in good locations because they were built in convenient locations and are holding on to the location.
Cons:
– Currently the valuations seem a bit high, especially in central Tokyo.
– Next year there will be a mandatory* labeling standard introduced to condos (https://www.livable.co.jp/l-note/news/g16295/)
– Older condo standards (especially pre-2000) are apparently much worse, due to not having a 10 year guarantee post-construction. Also potentially things like asbestos to worry about. Maybe shitty plumbing. ETC.
*they will name-and-shame developers who do not reveal their energy efficiency numbers. The idea is that condos from next year onwards may be considerably more energy-efficient as a result.
Another thing I have been thinking about for 20~30 yr old places is… if you buy it now in and sell it in a decade it will be a 30~40 year old place. The theory around depreciation says that the depreciation will be minimum for an older place… but as a buyer now who is not considering 30~40 year old places, I’m not sure people in 10 years would be either. That being said, it sounds like old condos can be great if the management is really good.
Some of these things have me leaning more towards a detached house, but the general consensus seems like those are a bit more difficult to sell, especially for around what you got it for. The valuation part about condos kind of makes me feel like I may be overpaying and makes me a bit concerned about resale value. I’ve been thinking about building a house but I highly doubt I’ll be able to get things right for my first build.
All said, the amount of analysis paralysis so far has caused me to re-sign my current lease as I try to figure things out. Another year (at least) of being too cold in the winter and too hot in the summer I guess.
If this is a money decision, make a spreadsheet with your assumptions and model it out. I’m sure many of us would be happy to provide feedback on such a sheet. I think you will find that short term ownership like that is inferior to renting a similar property and investing the difference in stock.
If this is not a money decision, ¯_(ツ)_/¯