"I don't know what property to choose..."
"I wonder how to operate it in a way that suits me..."
I'm sure there are many people who have similar concerns.
This time, we will explain the properties that are recommended for those who are just starting to invest in apartments, taking into account the characteristics of both newly built and older properties.
The pros and cons of newly built apartments
Recently built properties tend to have comfortable facilities and beautiful interiors, which makes them very popular among tenants. The biggest advantage is thatHigh rentIn particular, the need for large-scale repairs is low in the early stages,Reduce repair costsThis is a big attraction for investors.
In addition, it is easy to obtain loans from financial institutions and at low interest rates.It is easy to get a loanAnother point not to be overlooked is that the remaining useful life is long, so the loan terms tend to be more favorable, making it particularly suitable for those considering investing through a loan.
On the other hand, the disadvantage of a newly built property is that the property price is high, so the initial investment is large and the monthly costs are high.Difficulty repaying loansIn addition, as the building ages, the rent will fall and the monthlyA big drop in incomeYou also need to consider the risks.
While it requires less maintenance in the short term, careful planning is required to ensure long-term cash flow.
The pros and cons of old apartments
Many old properties built 30 years ago or older can be purchased at low prices, making them suitable for investors who want to keep their initial investment low. In particular, the value of the building has decreased and there are cases where it is possible to purchase the property for just the land price, soHigh cost performanceIt is characteristic.
In addition, the decline in rent and sales price was small,stable incomeAnother advantage of old properties is that they are easier to obtain. In Tokyo and the surrounding area, stable rental demand is expected, and the official land prices are also on the rise, so you can expect to sell them at the same price as when you purchased them.
In addition, because the depreciation period is short due to the useful life, a large amount can be recorded as an expense in a single year.Great tax savingsThe point is attractive.
As for points to note, repairs and equipment breakdowns, etc.Management hassleIn addition, the asset value is low, so it is difficult to obtain financial support from financial institutions.Hard to get financingAnother disadvantage is that there are many properties that exceed the building coverage ratio and floor area ratio, so be careful.
As such, old properties are a very attractive option for those who want to start investing with a small amount of money and those who want to hold them for a short period of time and manage them carefully, but there are many things to be careful about, such as management, occupancy rates, and financing.
Summary: Which is better after all?
So far, we have introduced the advantages of new and old apartments and things to be careful about.
Based on the above, the author's recommendation for beginners is:AncientThis property is.
Certainly, you need to take into consideration the issues that are unique to old buildings, such as the establishment of a management system and running costs, but it depends on how you manage it.Increased yield and attractivenessThis can be seen as a major joy and pleasure of real estate investment.https://www.rakumachi.jp/news/practical/290489) there are cases where rents have increased by more than 20%, so it is expected that profitability will improve through ingenuity and innovation.
In addition, in the process of repair and renovation,Gain a sense of costI believe this will be a great learning experience for landlords who are just starting out in apartment investment or who are just starting out.
Of course, to get the results you want from real estate investment, you need to be flexible and careful in choosing a property that matches your attributes and funds. However, the potential of used properties is immeasurable. Even if it is an old property, if it can be managed properly, there is a possibility that you can get a large return with a small investment.
I want to gain experience and learn about real estate investment.If you are one of those people, the author recommends starting with a used apartment.
We handle many used properties in the 3,000 million to 1 million yen price range. Individual consultations with our specialist staff are also available free of charge.
We also regularly hold seminars specializing in used apartment investment, so if after reading this article it makes you want to learn more about used apartment investment, please come and join us!
At Richroad Co., Ltd., we offer comprehensive support to a wide range of people, from complete beginners to experienced investors, on all aspects of real estate investment, from property selection and loan consultations to post-purchase management and renovations.
Click here to book a free individual consultation
