Buying a manshon - benefits? drawbacks?

[ExpatScot]

Hi all,

In the next few months my wife and I are going to start house hunting with a view to buying something early in the New Year. After initially thinking that we'd buy a house, we're slowly coming round the idea that a manshon might be a better option.

Our basic reasoning for this is that it'll be a hell of a lot cheaper (10-20m as opposed to 20-30m), meaning we can invest more, but also spend more money enjoying life. The fact that'd it'd be on one floor will also make life a little easier as we get older.

That being said, I'm not so keen on the monthly service charges for the upkeep of the building, but then again I presume we'd have to pay to maintain a house also. I'm also slightly worried that with us being surrounded by other apartments there's a chance that we get stuck with a noisy neighbour, something that's happened to us when we've rented apartments before.

Anyway, does anyone have any insight into manshon living? Is there something we should be looking out for when house-hunting? Any other benefits or drawbacks that you can see?

Cheers

[mighty58]

Regarding the costs with manshons, it's important to keep in mind two things:
1. An extra 30,000 in monthly fees is the equivalent to paying 10m more in purchase price over the life of a mortgage (*)
2. The fees only cover maintenance for common areas, you are still responsible for all interior maintenance (much like a house)

(*) Compare:
20m mortgage, 35yrs, 1.5% fixed = 61,237/mth +30,000 fees = 91,237 payment/mth
30m mortgage, 35yrs, 1.5% fixed = 91,856/mth

Need parking as well? Add another 15,000/mth and now it's equivalent to 15m more in purchase price:
20m mortgage, 35yrs, 1.5% fixed = 61,237/mth +30,000 fees + 15,000 parking = 106,237 payment/mth
35m mortgage, 35yrs, 1.5% fixed = 107,165/mth

So your 35m house and 20m manshon are now (almost) comparable. And that's assuming there's no increase in the monthly maintenance fee.

Now, both manshons and houses will incur costs for maintenance over its life, and it's only fair to state that, as house maintenance costs will include more in exterior maintenance, and because the interior space is so much larger, houses will end up costing more over its lifetime. But it's not "zero vs. a huge sum", as some people mistakenly think with manshons, more like 50% more if I were to ballpark it. Remember, manshon exterior/building costs are not zero, manshon's may periodically have one-off maintenance costs for big issues (like elevator replacements) where they charge each unit a fixed sum of XXX,000yen.


Other random thoughts having lived in both, and having gone through the same choice when buying myself:
Manshon pros:
- can take the garbage out whenever you want
- no stairs
- added level of security (assuming you have a locked front entrance)

House pros:
- more living space (usually 50%+ more for similar price)
- own the land underneath
- freedom to do what you want to the property
- no immediate neighbours to complain (important especially if you have kids) or to complain about
- free parking

[RetireJapan]

I agree with mighty

I have never bought a house, but I lived in one before, and also in apartments, and bought our manshon about five years ago.

One thing to keep in mind is that there are different 'levels' of manshon, the better ones have thicker floors and walls, and much better sound insulation.

You can also renovate to add sound insulation, inner windows, etc. and end up with a pretty soundproof place. Undesirable neighbours can occur in both manshons and houses (we had one guy living opposite our rental house who was a problem until we got the police involved).

Monthly fees can also go up over time.

My impression is that property taxes are lower for houses.

If you need parking spots for a car (or two cars!) a house can be much cheaper.

Taking the rubbish out any time, not having to worry about breakins, and not having to do 'community' activities and duties are big pluses for manshons in my experience.

Anyone else?

[Haystack]

I agree with mighty

I have never bought a house, but I lived in one before, and also in apartments, and bought our manshon about five years ago.

One thing to keep in mind is that there are different 'levels' of manshon, the better ones have thicker floors and walls, and much better sound insulation.

You can also renovate to add sound insulation, inner windows, etc. and end up with a pretty soundproof place. Undesirable neighbours can occur in both manshons and houses (we had one guy living opposite our rental house who was a problem until we got the police involved).

Monthly fees can also go up over time.

My impression is that property taxes are lower for houses.

If you need parking spots for a car (or two cars!) a house can be much cheaper.

Taking the rubbish out any time, not having to worry about breakins, and not having to do 'community' activities and duties are big pluses for manshons in my experience.

Anyone else?

No one has mentioned resale. It seems everyone assumes their property will be worth next to nothing upon their passing.

I guess I would add, if you are going with a Manshon is it your "forever home?" If not, perhaps renting still might be the best option depending on the market.

[RetireJapan]

No one has mentioned resale. It seems everyone assumes their property will be worth next to nothing upon their passing.

I guess I would add, if you are going with a Manshon is it your "forever home?" If not, perhaps renting still might be the best option depending on the market.

We are planning to sell our manshon at some point and move into my in-laws' place.

Prices have actually risen since we bought, so I expect to largely get our money back, and our monthly loan+costs has been substantially lower than market rent would have been.

After a couple of renovation jobs it's also much more pleasant than anywhere we could have rented.

So for us it worked out fairly well, although everyone should at least be aware of the numbers for their area...

[ExpatScot]

[/quote]

I guess I would add, if you are going with a Manshon is it your "forever home?" If not, perhaps renting still might be the best option depending on the market.
[/quote]

Yeah we would probably live in the house/manshon forever, or at least use it as a base while exploring other areas (finances permitting). My wife is keen to buy something so that we're not still renting after retirement.

We don't have a car so parking wouldn't be an issue, and yeah we'd want to get a building that's got decent insulation to offer some soundproofing.

In term of monthly fees is it fair to presume that a more simplistic building (maybe 3 floors, no elevator) would tend to have cheaper fees? Or would a larger building with more apartments mean more people to spread the costs? Looking at what's on offer there seems to be little rhyme or reason in regard to their fees.

Thanks for the feedback.

[RetireJapan]

In term of monthly fees is it fair to presume that a more simplistic building (maybe 3 floors, no elevator) would tend to have cheaper fees? Or would a larger building with more apartments mean more people to spread the costs? Looking at what's on offer there seems to be little rhyme or reason in regard to their fees.

Not an expert by any means, but manshon fees tend to be split into maintenance fees (to pay for any staff, electric bills, cleaning, etc.) and the repair fund (saving up money for any renovations/repairs to the building). The former depends on what kind of services are offered by the manshon (is there a custodian on duty? is it cleaned regularly? are there common facilities like meeting rooms?) and the latter is set by the manshon association along with the maintenance company. The older the building the higher the repair fund contribution is likely to be.

If the repair fund contribution is too low there is a higher chance that the fund won't cover necessary repairs, and then owners will be asked to pay for them out of pocket. So it is not the case that lower fees are better.

Before buying you absolutely should check the documents that explain what repairs/maintenance have been done recently, how much is in the repair fund, and how the monthly fees break down.

[SZQ]

We are in the same process. Although we still prefer to buy a house at the moment, a manshon is still an option.

Other pros of manshon (I'm still not clear what a "manshion" is compared to an apartment or condo ):

• They tend to be in better locations if you prefer to be close to a station
• Taller ones may have a better chance for a nice view (and cleaner air?). Houses can also have nice views if you are lucky but from what I have seen most are surrounded by other houses and roads and power cables.

The main reasons why we still prefer a house are:

• Considerably more space
• More privacy
• Possibly quieter location
• Don't have to waste time waiting for the elevator (mostly a problem with taller buildings I guess)
• Potential garage space. Even if we don't get a car it would be nice to have a secure space for bicycle storage and other random stuff

We were considering a custom build but finding reasonably priced land in a reasonable location is proving difficult. We spoke to a house builder (Mitsui Home) and somehow the agent got a bank to pre-approve us a loan of 60M which is insane based on our income . No way I am borrowing that much

[SZQ]

... and not having to do 'community' activities and duties are big pluses for manshons in my experience.

Don't know anything about this. Are these common and obligatory?

[SZQ]

Our basic reasoning for this is that it'll be a hell of a lot cheaper (10-20m as opposed to 20-30m), meaning we can invest more, but also spend more money enjoying life. The fact that'd it'd be on one floor will also make life a little easier as we get older.
Cheers

These are strong points! Having enough disposable income to do things so you don't stay at home all day everyday and worrying about paying off a huge mortgage is important.

Also, a friend of mine (he's single) sold his house and moved into a manshon because he felt lonely. Even if you don't interact with the other residents directly, some people find it comforting to hear other people going about their daily lives in the same building. He says he feels more secure and comfortable.