New Evaluation Criteria for Vacant Homes: An Approach Emphasizing Simplicity and Practicality

Articles Published in Akiya Lab | Roopt (Makigumi)

Makigumi, which operates Roopt, regularly researches case studies and other information on vacant home revitalization and publishes them as columns.

For investors and real estate owners who own vacant homes, accurately evaluating the value of their assets is extremely important. However, traditional evaluation methods often do not adequately reflect changes in social conditions or the diversifying uses of these properties. Against this backdrop, there is a demand for the introduction of new evaluation criteria that are simple and practical.

The Need for Simple and Practical Evaluation Criteria

Modern investors want to evaluate assets in a simple and practical way. There is a demand for evaluations that are easy to understand intuitively and useful for actual operations, avoiding overly complex methods. This necessitates evaluations that take into account new social conditions, while also being user-friendly. Financial institutions are also expected to refer to such evaluation criteria.

Proposal for New Evaluation Criteria

The new evaluation criteria emphasize the following three points:

• Evaluation based on sale: This is a traditional method, where evaluation is conducted at a price reflecting market value.
• Evaluation based on rental: This considers future profitability based on demand in the rental market.
• Evaluation based on business: This assumes a business utilizing the vacant home (e.g., a share house or vacation rental) and evaluates it based on the feasibility and profitability of that business plan.

By using the highest amount among these three criteria as the evaluation amount, the potential of the asset can be maximized.

Importance of Local Communities

Furthermore, a new proposal is to incorporate the element of "local community," which has not been part of evaluation criteria until now. By adding not only demographics but also the power of the community in that area—that is, the connections among local residents and the vibrancy of their activities—to the evaluation, the potential for success of businesses such as rentals, share houses, and vacation rentals can be estimated more accurately.

Thus, new evaluation criteria that are simple, practical, and reflect societal changes are an important step towards accurately grasping and maximizing the potential value of vacant homes. It is expected that by investors, real estate owners, and financial institutions referring to these new evaluation criteria, the effective utilization of vacant homes will be further promoted.

Source: Akiya Lab