Valuation of older detached houses as an investment in modern times

Article published on Vacant House Lab | Roopt (Makigumi)

Makigumi, the company that operates Roopt, is constantly researching case studies and other information on revitalizing vacant houses and publishing them as columns.

The landscape of real estate investment is changing dramatically due to recent developments. At the heart of these changes is the need for new evaluation criteria. In this article, we will delve into the modern evaluation criteria that investors such as GaiaX and our company, Makigumi, particularly value.

Modern investment decision criteria

Today, instead of making decisions based on traditional collateral value, it's essential to assess market trends and the potential value of properties. For example, actively considering investments in properties with a gap between their market price and their actual value is key to discovering new opportunities. This is something we want financial institutions to understand, and we expect real estate agents and investors to provide information and proposals on such properties.

Scope and focus of investments

Our company focuses on older detached houses and wooden buildings priced between 10 million and 30 million yen. We exclude office buildings and apartment complexes, and primarily consider less desirable properties in rural areas. We believe these properties, though often overlooked, hold high potential if properly valued and utilized.

New Value Judgment Criteria

When evaluating a property, in addition to traditional criteria, you should consider how much value the property can generate through feasible businesses. This includes the rental market and the potential for use after renovation. Therefore, it's crucial to consider not only the basic value of the property itself, but also its value as a business.

Local communities and business models

Contributions to the local community and the development of locally rooted business models are also important factors in evaluation. Within the framework of the sharing economy, the introduction of new business models such as short-term rentals and shared housing can be considered. These approaches have the potential to unlock new value in real estate and bring benefits to both investors and the local community.

summary

Decision-making in real estate investment now requires not only evaluating a property, but also determining how that property can generate value as a business. It is essential in today's real estate market for financial institutions, real estate agents, and investors themselves to share this new perspective and make investments that lead to a better future.

source: Vacant House Lab