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

Article published in Akiya Lab | Roopt (Makigumi)

Makigumi, which operates Roopt, constantly researches case studies and other information regarding the revitalization of vacant homes and publishes them as columns.

For investors and real estate owners who own vacant homes, accurately assessing the value of their assets is extremely important. However, conventional evaluation methods often do not sufficiently reflect changes in social conditions or diversifying usage scenarios. Against this backdrop, there is a demand for the introduction of new evaluation standards that are simple and easy to use.

The Need for Simple and Practical Evaluation Standards

Modern investors want to evaluate assets in a simple and practical way. They seek evaluations that are easy to understand intuitively and useful for actual operation, avoiding overly complex methods. This necessitates evaluations that consider new social conditions, while also being user-friendly. Financial institutions are also expected to refer to such evaluation standards.

Proposal for New Evaluation Standards

The new evaluation standards emphasize the following three points:

• Evaluation based on sale: This is a traditional method, where evaluation is based on market value.
• Evaluation based on rental: This evaluation 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

In addition, a new proposal is to incorporate the element of "local community," which has not been included in evaluation standards 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 likelihood of success for businesses such as rentals, share houses, and vacation rentals can be more accurately estimated.

Thus, new evaluation standards that are simple, practical, and reflect societal changes are an important step in 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 standards, the effective utilization of vacant homes will further advance.

First published: Akiya Lab (2024 - now integrated into this site)