Last week we were on the Tokaido Shinkansen early in the morning and ran into a friend we hadn’t seen in years. He asked us if we were still living in Tokyo and we said we weren’t, that we had moved a little over a year ago mainly due to the earthquake. He then asked us what we were doing on the bullet train and we said we were on our way to Atami on the Izu Peninsula to look at some properties we might be interested in buying. He gave us a funny look. “That would seem to be the worst place to live if you’re afraid of earthquakes.” True. Just the day before the Cabinet Office Disaster Council updated its projections for a major earthquake in the Nankai Trough, and Shizuoka Prefecture was deemed the worst in terms of possible casualties, though, technically, most of those casualties would be in the western part of the prefecture, not Izu. In any case, we weren’t completely serious about buying a place on the peninsula. Having been frustrated in our search so far for a home-sweet-home we could afford, we were entertaining the idea of keeping our rental and buying a very cheap old fixer-upper in a place with cooler summers. If our income situation worsened and we had to give up renting, then we would at least have a roof over our heads, and if things continued as they have been (notice we don’t actually think they’ll get better) then we’d have a weekend/summer place. There are plenty of old dumps in the highlands of Tochigi and Nagano, or in the wilds of Chiba, that can be had for under ¥7 million, though they’d require another ¥3-5 million to make them livable. And during our search we noticed there were quite a few such places in Izu, too, mainly besso (second homes), which we had avoided so far. Second homes tend to be built in specially designated besso developments managed by companies that charge yearly fees, some of which are pretty high. Also, besso tend to be impractical for year-round living, but since we weren’t necessarily going to be living in one year-round we thought we’d see what was available. And Izu is, as they say, the “Riviera of Japan.”
We made an arrangement with a realtor in Atami to see two properties in besso areas and one in town. We got off at Izu Taga station on the Ito Line and were immediately entranced by the quaint leafy charm of the place. We walked down the steep hill to Nagahama beach. It was a blazing hot day and we were already drenched in sweat when we reached the realtor’s office, which is right across national road 135 from the beach. The agent who would be our guide had prepared floor plans for the three properties. The one in town we had just found the night before and he had only read our email that morning, so he didn’t have a key. His company was not the main realtor for any of the houses, though it did have them on its listings. He had obtained the keys for the two besso but would have to retrieve the other one from a different realtor if we wanted to see the interior. We said we’d look at the exterior first and then decide, since it was on the way to the first besso property.
The drive was quite instructive. Izu is mountainous, and the roads through this part of Atami were narrow and winding. We were interested in the one town property because it was only ¥5.9 million and had a view of the ocean. It was quite old but far enough above sea level to be out of harms way if ever a huge tsunami hit the area. Getting to it involved a lot of maneuvering in the realtor’s spanking new Prius, and there was no parking space. It was an interesting house, two stories shoehorned onto a 64-square-meter plot of land located on a kind of dogleg corner. From the outside it would obviously need a great deal of work but we were intrigued, more by the location than anything else. The agent called his office to have somebody pick up the key.
We then drove up to the first besso area, called Green Hill, which is an understatement. The ads on the various portal sites say the house is two kilometers from Ajiro station on the Ito Line, but we assume that’s two kilometers if you’re a crow. We drove for about fifteen minutes up grades that tested 15-20 percent in some stretches, and then once we reached the residential area had to meander through narrow roads laid out like randomly strewn spaghetti. The agent provided a constant flow of information that was more entertaining than the usual sales pitch. He told us about the celebrities who lived in the area (“the late songwriter Aku Yu had a large second home over there, but since he died his family has had trouble unloading it, even for ¥40 million”) and confided that his company didn’t deal much with weekend people. We finally arrived at the property, a two-story house with 78 square meters of floor space on a 247-square meter piece of land. It was in the middle of what could have been any other housing development in Japan except for one startling feature: the view. You could see the Pacific prominently in the distance. There was nothing blocking the view, mainly because many of the lots on the block were empty. Given that the house was originally built in 1969 this seemed strange, but more on that later. The house had been bought from the family of the previous owner, a man who had recently died but whose main home was in an expensive neighborhood in Shibuya, by another real estate company that was half-heartedly fixing it up. We didn’t have to take our shoes off because the floors were covered with vinyl protectors. The first floor consisted of a large LDK area with sliding glass doors to the south and the east. There was also a bathroom and a six-mat washitsu with moldy tatami. An incongruous bannister-less stairway led up to the second floor, which consisted of a small room with beautiful old-fashioned wooden sashes and a roka (hallway) that extended along the south side from which you could enjoy a panorama of the ocean in the distance. Behind it was another washitsu, this one with eight mats.
We liked the house and, given the amount of work already underway, thought the ¥8.5 million price tag was reasonable. But the drive up had already convinced us this was not our kind of place. We don’t have a car at present and though we would consider owning one under certain conditions, we also want to be within some manageable distance from stores and other amenities. Any need for supplies would have to be met with a long, treacherous drive down the hill, and as for getting to and from the station, it would have been a big pain in the ass. This, we immediately realized, is what besso living pretty much is all about.
We asked about the management fee, and it turned out to be only ¥20,000 a year, which is very cheap. But then, as we could see, the area was pretty cheap, too. As mentioned above, there weren’t many houses on the block, despite its spectacular view. The plot directly north of the property we inspected looked as if it used to have a house on it, but now there was only a large tool shed. Apparently, even a shed qualifies as a “structure” for property tax purposes (you pay more for land zoned for residences if it remains vacant), and whoever owned it was still hoping he or she could sell it for what he paid for it. That wasn’t going to happen, at least not on Green Hill. The agent offered to explain this situation with a tour of the other side of the hill, called Minami Atami, which was quite different. Many people in the 1980s had bought land on Green Hill strictly for investment purposes. Not only did the land never gain value, but people stopped buying property for second homes. The place just stagnated. Anyone with money went to the other side of the hill. There, the properties were all upscale, attached to the side of the hill as if by bolts. He told us that Izu was developed as a vacation residence region in the 1960s by two developers, Tokyu and Seibu. Tokyu mainly developed this side of Izu, from Atami down to Shimoda, and even built a railroad, Izu Kyuko, to service its customers. Seibu stuck to the other side of the peninsula, starting from around Mishima and working south. By the bubblicious 80s properties in Minami Atami were going for as much as ¥200 million, and even though their value had dropped by more than half since then, the area was still touted as a luxury second-home paradise. As we snaked our way down the hill we marveled at the engineering, large, awkwardly cantilevered structures jutting out into the air or clinging like vines to woody grades, with parking spaces carved out of rock and long, treacherous wooden staircases connecting them to front doors. Obviously, this was not a place for old people, and the agent said that was exactly the problem. He waved and silently snickered at fellow realtors who were still selling properties to rich folk. His company didn’t do that. They dealt with natives who felt squeezed out and had no interest in living among the hills. They scrambled for every inch of level ground, which was rare and precious. That’s why land prices were still relatively high in town.
After picking up the key to the house in town we drove along the coast for another fifteen minutes, talking about the real estate business in general. He was always amazed when he looked at the papers for a new property and found that it was being used to back so many different loans. He couldn’t understand why a loan company would accept a worthless property as collateral when it had already been used for collateral for the other loans the person was trying to pay off with the new one he was trying to get. “What are all these companies going to do? Divide the house up between them?” It took us even longer to find the next property, which, again, was supposedly two kilometers from the train, in this case Usami Station. This one was located on a dead end street with a few houses on it, but the vacant lots were so overgrown they resembled jungles. The house was a bungalow with a small kitchen-dining area, two parallel rooms, and a south-facing deck that looked out over the ocean, though there was less of it to see because of all the overgrowth. The house to the west was only a few meters away. The photos we’d seen on the portal site had completely misrepresented the house, making it look rustic and cozy. Up close it was cheap and makeshift. In fact, there were three modes of electrical outlets in the house, as if it had been built during three separate industrial eras.
We returned to the house on the dogleg corner we had seen earlier and opened it up. The place hadn’t had air in it for a long time and the smell of mold was overwhelming. At first we liked it for the possibility it held. With new floors and walls, the first floor might be comfortable. It had two large windows that looked south and east, and the ocean was visible from the living room, but also anyone who happened to be walking along the street. The bath was tiny and we wondered how much it would cost just to remove it and install a shower. But then we went to the second floor. The layout was fine and the large windows let in a lot of light in the two rooms, but the heat was stifling. We once lived in a house with a metal roof, and you couldn’t stay on the second floor for more than an hour or so in the summertime. This felt like the same thing, and replacing a roof is a very expensive task. The price was ¥5.9 million, which is good for this part of town, but after talking it over with the agent we figured we’d have to sink another 8 or 9 million to make it habitable. It wasn’t worth it. We trudged back up the hill to the train station and realized we had hardly even thought about earthquakes.
Cat Foreheads & Rabbit Hutches 
As entertaining and informative as this blog is, I can’t believe you’d ever spend money on a house in Japan, much less a ‘besso’! Even though Japan’s per-person hotel charges make it cost, you can stay in hotels many nights in many different places for less than the yearly costs (including depreciation) of having a ‘besso’ – true in most other countries, too.
Also, you won’t need a car ($9K/yr in the US, and likely more in Japan) to get to the hotel, since there is transportation to most, or the hotel does train-station pick-up, or you periodically rent a car. Have you driven much in Japan? Trains can be crowded, but they stick to their schedules. I have been in too many twelve-hour traffic jams in Japan.
I don’t know what a loan costs in Japan, but I’ll imagine you don’t need one, but these costs are still there each year:
– ¥8 million for car ownership
– ¥1 million for home taxes and maintenance (probably more)
– ¥0.5 million for home utilities (probably more)
– ¥1.5 million home depreciation (probably more), based on my wild estimate of buying and renovating a house here (¥100 million plus), losing half of that value, and spreading the cost over forty years.
If a hotel charges ¥10 000 a night per person (you can go a little lower, and much higher), but your yearly ‘besso’ costs are ¥11 million by my count, that is one-hundred hotel nights, or fifty for a couple: almost two months, or two nights every weekend of the year. Less hassle, and no risk. And does anyone get to their ‘besso’ every weekend?
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¥11m per year! They have stated several times that they are looking for a home for under or around ¥10m including the money they may need to put into it for renovation.
And ¥8m for car ownership? What kind of car costs that much? There are 127m people in Japan driving 60 or 70 million cars. The average household income here is somewhere around ¥5m. People are not spending ¥8m on paying for and running all those cars.
So, if we take the ¥8m out of your calculation, it brings the running cost down to ¥3m. Still much too high for the kind of property the writer is looking for, but certainly better than ¥11m.
Look around and tell me if people in Japan are spending ¥1m a year on maintenance. They actually spend very little on that, which is why properties degrade quite quickly in Japan. Taxes on the modest kind of property they are looking for would be low, probably much lower than the management fees.
One last thing, utility bills have to be paid for all properties, rented or owned.
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Hmm… Not sure I buy all of your argument, but I will admit I may have got a decimal wrong or two. Too many in yen. Anyway, cars like second-houses, are something you cannot really get the use out of to make the cost worth it unless you are using them constantly.
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And the hotels have free breakfast at that price!
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Interesting article. Oftentimes in the summer I head out to the countryside and fantasize about living a laid back life surrounded by greenery and quiet. Then I think about the lack of restaurants, shopping, convenient transport, young people and other stuff and think maybe just getting a summer besso home like that would be the way to go, if we ever save up enough.
And I have to agree with Eurasiaendtoend, the costs in that earlier post are incredibly unrealistic. 8 million yen per year for car ownership? I realize cars are expensive, but it is ridiculous to say that your average car costs even a fraction of that.
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Yeah, should be 0.8 million for the car, based on $8K/yr in America. However, I bet it is 150% of the cost in Japan as America if you include ‘shakken’ and road tolls.
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Been reading this blog for awhile and all I can say is the more I read it, the more I am convinced that the only right way to own a home here is to buy decent land and build a proper house that’s built to last. As overly prideful as Japanese are about their 30year tsukaisute homes, the only thing they ever seem to say that’s positive about them is they think they’re more earthquake proof than foreign homes. Though I doubt there is much, if any, truth in that either…every western style home I’ve seen here has retained it’s value (and condition) far better than Japanese homes built the same year. It may involve a lot of creativity, some importing, and a search for a willing construction company….but considering it’s your biggest investment, isn’t it worth the hassle?
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>build a proper house
amen to that. Ship the sticks from Seattle, too!
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Philip and Masako, great blog, never get tired reading and learning, reminds me of the hunt for our own place in Senzoku a few years back.
A quick question, would you have any information regarding rural communities offering deals for city folk/families to move in?
I remember hearing somehting about it a while back but not sure where and if it was only for new builds, figured you two would be one of the most informative sources to start with.
Thanks
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Almost every prefecture and rural local government in Japan has some kind of incentive for repopulating their areas, usually called “u-turn” or “i-turn” plans. Here’s a website that can connect you to some of them and give you an idea of what kind of plans are available.
http://www.furusatokaiki.net/
But, again, if you have a particular location in mind you can probably go to the local government office and ask. They’ll probably be happy to talk to you. In some cases they even help you find a job, or help you finance renovating an old property.
There is also some fairs coming up where you can talk to representatives of local governments in person. One at Waseda Univ. in Tokyo Sept. 16-17, and another in Osaka at City Plaza Sept. 12 & 29. More info here.
http://www.furusatokaiki.net/fair/2012/
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Thanks very much for pointing us in the right direction, much appreciated. We’ll be sure to try and make it to the fair to catch a few area representatives in person.
On a historical note, similar to some of the posts on your site, when we bought our current home we let a few agents know we wanted a place for the value of the land but with a place on it and to call us for a quick look as soon as they got wind of anything before they knocked the old houses down. While they couldn’t fathom why we WANTED a house worth nothing, a few agreed. After several months and viewing some horror movie sets, we bought our current place only a few days after it went on the market one new years. Got it for the value of the land with a bit of a discount for taking the almost 30 year old house that was on it. My wife and I renovated it ourselves in the evenings (before having the kids, could work into the morning without a worry!) over a year or so. Very happy but can definitely state that live-in renovations put your relationship through its paces !!!
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That’s very interesting. We sometimes come across properties whose price is obviously just the land, but old, decrepit houses still stand on the land. When we ask about getting rid of the structures so that we can build a completely new house on the land, usually the realtor says we will have to pay for demolition, which, depending on the location, can cost as much as ¥2 million. I’m curious as to how much “renovation” you had to carry out to make that old house comfortable.
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We spent a day climbing all over it before making an offer, had been lived in until a month or two prior. Had it inspected and the place was structurally sound and of better than average quality for the age (built for a single old lady by her family it seems), plenty of steel in the footings, no cracks, no serious termite action and as straight as could be hoped for, cared for but renovated since being built. Was basically weather tight again with the aid of a couple of tubes of silicone.We bought most of our materials online/auction (hopefully not stolen stuff!), did 95% of the work ourselves. Sealed and painted interior walls and ceilings (no paper and didn’t like the stuff anyway, all render), new hot water heater and air-con. We wanted a black floor so we sanded and refinished, dodgy but we figured we’re the ones walking on it so no problem. Fresh tatami upstairs, fresh fusuma, new curtains. We pulled up the flexy bathroom floor (dry area) and put in heavier bearers and substrate (I’m a big boy), threw in some ceiling insulation (unsavory yet necessary job but done in a day). I think from memory we got quoted about 3M yen for the work but the bank vetoed the extra in the loan, hence the DIY bonanza on limited available funds. I am guessing the ‘necessary’ work we completed in the month before moving in would have cost us around 1.2M or so plus our time.
The kitchen is unsexy but serviceable, typical Showa style with acres of thin stainless, so should we ever have the money we’d probably redo it. This year, our 3rd in the place, we put in double glass inner windows ( have probably paid for them twice in power bills already, keeping the place warm/cool) and built a kids room, kind of phase two of the reno. Tile roof is good on one-hand but apparently a bit of minus on the earth quake front (old wooden house supporting several tonnes of tile) so may think about doing something with it should we ever get our motivation (read- masochistic streak) back.The exterior could also do with a coat of paint now.
You guys are probably all over it already, but if you do find a place and want to try DIY, we’re happy to share what we know/learned the hard way if that’s of any help.
Cheers.
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This post is relevant to my interests!
I’ve always wool-gathered about a place on Izu, since it reminds me a bit of my beloved Monterey area, and it’s my hope that Japan’s depopulation will leave everywhere not within 2 hours of Tokyo pretty empty next decade, like that 1970’s disaster movie where almost everyone was turned into a small pile of salt. . .
But then I realize that a life in some isolated locale would be pretty zen-like, and not in a good way. When I was last in Japan, I chose to live within walking distance of the National Azabu, and I’ll probably make that mistake again!
My hope is that the higher tax levels coming this decade and next will come right out of rents and housing valuations, but this is a rather . . . aggressive . . . thesis to hold onto.
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I was just in Taga and Ajiro last weekend looking around the area. The beach in Taga is quite nice. Ito city is not bad either – plenty of available shopping.
I also do not like the houses that have been bolted on to the side of a hill – i want the land to be fairly flat.
We bought a 20+ year old house in the Atami vicinity which was completed rennovated. Yes, a hotel is probably cheaper, but I can’t bake bread in a hotel room.
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After looking at houses in Japan, and getting disgusted with the lack of space and imagination, I designed and built my own 150 sq.meter steel-frame house in Gunma. It took two years to build, but well worth it and paid for with sweat-equity and ¥15,000,000, most of the fixtures, woods, appliances and materials imported from the US. I can’t think of a more gratifying project in my little life.
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