Buying a house/apartment which is already 30+ years old?

[RetroNewbie]

(I'm back with yet another dumb basic question!)

I've been renting in Toyko for a long time, and hadn't really considered buying until now (salary wasn't stable enough before), but I know basically nothing about buying houses/apartments.

Given my age (46) I doubt I can get a particularly long mortgage (20 years?) which seems to put the monthly repayments pretty high on the Suumo simulations. Which means buying somewhere new around Tokyo is well out.

The only things that seem to be within a feasible monthly repayment are remodeled apartments that are 30-40 years old. The interiors look nice, but...

(a) I heard buildings in Japan don't have a very long lifespan, so aren't they going to want to knock down the building in like 5-10 years?

(b) what happens in that situation?

(c) what do you actually own? Is it just a long term lease? Do you own a share of the land? Etc...

(d) the above are mainly for apartments, but if it was a house then would you have to knock it down and rebuild it yourself?

Back home I'd think it was still worth buying, even if the monthly cost was the same as renting, because 30 years later you'd own something of value. But here I'm not sure if you'd end up with something valueless that gets demolished after 10 years??
(I assume not, because then who would ever pay 35M for a 35 year old apartment, and someone must)

[Moneymatters]

...
(a) I heard buildings in Japan don't have a very long lifespan, so aren't they going to want to knock down the building in like 5-10 years?

(b) what happens in that situation?

(c) what do you actually own? Is it just a long term lease? Do you own a share of the land? Etc...

(d) the above are mainly for apartments, but if it was a house then would you have to knock it down and rebuild it yourself?

Back home I'd think it was still worth buying, even if the monthly cost was the same as renting, because 30 years later you'd own something of value. But here I'm not sure if you'd end up with something valueless that gets demolished after 10 years??

as JohKun says you could likely be eligible for a longer mortgage. you just might need to plan to make payments in retirement years..

a/b)
Concrete apartment builds have much longer lifespans with skeleton and earthquake proofing reforms available. The repair / rebuild fund will need to be a big consideration when buying. Something like 80% of occupants need to agree to whatever the reform/rebuild plan is and how to fund it. Maybe they can rebuild, add dwellings and fund some of it that way. I think this it why you'll notice the more desirable the location the more likely it would be rebuilt within 50 years for example. (number plucked from air).

c) need to confirm but you should own a portion of the land and be part of the management association (hence a vote on reform/rebuild decisions)..

d) I don't think you need to do it yourself! (As an aside, I was back in the motherland last week and up clearing moss off the roof of the mother's building. Not for the faint hearted.. I'd been assured there was a working jet-washer but was provided something less powerful than Manneken pis! I've only been back here one day and just had news an actual builder fell off the Motherland's Mother's neighbor's roof and broke their neck. So please don't think you have to rebuild it yourself. there are all sorts of companies out there to assist.
Anyway, a wood house well constructed*within the last 20 years or so and well maintained should last at least 50 years. The in-laws place is almost 50 years old, is of suspect construction, had no maintenance to speak of (slate roof) and is somehow still standing on it's own perfectly fine.
There are all sorts of reconstruction or rebuild options and there are many people that will look to rebuild 30-35 years if they have funds (it's often when an inheritance might come their way for example..). One other reason for rebuilds is the preference for new so if someone moves away they'll sell up and the new occupant might rebuild when it's definitely not required. The quickest I've seen near us is under 15 years.. then you have the banks in league with the builders making it easier to fund new builds (It's basically all a Fraggle Rock conspiracy I tell you!)

From my perspective, and I got a very short mortgage for this reason. Living in a place, rent free, that will last well into your old age is a huge peace of mind (extra importance for someone with limited mind resources available.).

Buying an apartment means you need to factor in an exit as you might be in the 20% that is overruled for a rebuild decision down the road.. Definitely something you want to discuss at length with a real estate agent or someone knowledgeable.

* Well Constructed. That's obviously subjective but there are some "tateuri" places that are visible flimsy. Like the set of a Telenovela. They could be still be structurally sound but more prone to the effects of weather and more reliant on timely maintenance. good luck!

[Nancy]

For apartments etc. you also need to look at the original construction date, since there was a big change in 1981 in the regulations. Here is a summary of the laws. (which I just found by chance.)
https://japanpropertycentral.com/real-e ... -in-japan/

[Deep Blue]

For apartments etc. you also need to look at the original construction date, since there was a big change in 1981 in the regulations. Here is a summary of the laws. (which I just found by chance.)
https://japanpropertycentral.com/real-e ... -in-japan/

FWIW, this regulation applied to normal houses too, not just apartment blocks. One point from the article is not to just consider the date of construction, but the date of approval. Especially for condo blocks, construction might not be complete until several years after approval.

Even if a building was completed in 1982 it may not necessarily be built to the new codes, especially if construction began many years prior. If you are concerned, ask the seller or real estate agent to confirm whether the building is kyu-taishin or shin-taishin. The important date to look out for is the date that the building approval application was submitted to the local city planning department.

[jane doe]

To second what others said, it's worth asking a bank if they would give you a mortgage with repayments up to 75 (but you could maybe try to pay off more earlier on) Enquire with your lender if there are penalties for paying off earlier.
As for older apartments, go for something built from 1991 onwards for more of a guarantee of earthquake resistance. Find out if there is a long term maintenance plan (should be with that age of building; it's only ones over about 40 that often never got round to this). Ask early on about the maintenance history and how much is in the rebuilding fund. Cross any under-maintained and underfunded ones off your shopping list. Usually well-maintained looking buildings are more likely to be in a healthy state, but not always. On the other hand, scruffy uncared for looking common areas are a strong indicator that the management committee is probably not working well. The agent should be able to answer your questions about any of these. They have much stronger legal obligations now than a few years ago, so transparency is improving, which should reduce your risk a bit.
That said, there is a lot of overpriced tat out there, so be very selective to avoid headaches down the road. A well run management committee and an effective management company should be very important in your decision.

[RetroNewbie]

Thanks you all for the very useful info.

We're pretty limited in area by schools, so the only ones within budget were 30 something years old.
But if we can push the mortgage up to more like 30 years then more things become a possibility!

[Deep Blue]

As for older apartments, go for something built from 1991 onwards for more of a guarantee of earthquake resistance.

Why do you say 1991 and not 1981? Shin-taishin standards were enacted in 1981 and there were no updates in 1991?

[jane doe]

Well, I'm not an expert, but my view is that 1981 is better than nothing, but added to the fact your 1981 building will already be 10 years older than the 1991 (obviously), the standard in 1991 was quite a bit higher I understand. If you got a property in a 1993 building for example, it's already over the 30 year line, so no spring chicken. The government recommends buildings do major repairs about every 12 years, so this is reflected in many buildings' long term plans. Having said that, there are certainly plenty of buildings out there that haven't done their stuff as they were supposed to. But the younger the building, the greater the chance it has followed this cycle, meaning the building has a better chance of reaching its three score and ten.

Plus, management practices of buildings do tend to have got better gradually, which also increases the chances of more transparent management from the start, having a proper long term building plan that has been adhered to, and less likelihood of dodgy special agreements over rights that might favour one individual over the general interest.

People back in the day were less mobile, which means that in your 1981 building, you might find the ageing sons heirs of the original owners are looking to see out their days in the same place and don't want to be shelling out on fripperies like proper building maintenance. Get enough of these stick in the muds on your management committee and you will find any suggestions for change or action from your good gaijin self get the collective middle finger. You can tell this is the voice of experience, I'm sure. And I tried. Believe me, I really tried.

As an example, the 1976 building I live in was self-managed and super dilapidated when I moved in, in 2012, with a majority of over 60's, and odd units stuffed with garbage, window panes that had not been repaired in 20 years, or wooden floors rotting through (concrete building, so not structural, but overall rank and roach infested). One old lady had a roof terrace that was a biohazard. There was no long term plan. It was self-managed, but fortunately the majority threw in the towel about 5 years back and hired a property management company. I'm no fan of this company and I was initially against, but actually the company did back my proposal to get a long term plan done. I found a consultant to do it for a good price, and finally with a plan in place, it was possible first to get the building insured, but then to do a programme of major works without needing to borrow money. As a result, the building does look like having a chance of making it to 70, which in turn lifts the value of my own flat. This change has caught the eye of developers, who have gradually bought up some of the funkiest units as they came empty and flipped them. From me being one of the young'uns in 2012, I am now in the older demographic, and the building has five younger families and 6 children, plus a clutch of vicious chihuahas that hate me if I run into them. The entrance no longer smells, mosquitos have been banished from the corridors, the windows all have glass in them. Things are looking up.

This all sounds whimsical, but actually it's kind of ageing Japan writ large, and I'm sure you don't want to find yourself in a building populated solely by lonely isolated old people popping their clogs one by one. And even now, we still get far more than our fair share of ambulance visits to the building.

So long story short, it's going to be your home. You want to feel good about living there. If you want to think of it as part of a community and also as an asset, if not exactly an investment, at least not a headache, you need to consider the bunch of people you are throwing your lot in with. This can definitely save a certain amount of wear and tear on your hair, and definitely on your teeth.

[Deep Blue]

I don't disagree at all on most of your points, in fact most of them are why I would never buy a condo or manshon regardless of age.

I was just commenting specifically on earthquake standards, as as far as I know there have been no updates to the requirements since 1981.. so a building built to code in 1981 will be just as safe as one built to the same code in 1991.

But dealing with mangement committees, and communal maintenance and shitty neighbours etc etc.... these are all good reasons for buying a house in my view!

[Tokyo]

Interesting comments being made but it’s not clear that all of them are based on personal experience.

I lived in a house in the suburbs but I now live in a downtown condo. Obviously being downtown is infinitely more convenient, but it’s also infinitely more fun. More importantly, the brand new house we built so lovingly depreciated to zero leaving land only value over 30 years. In contrast, the 20 year old Tokyo condo we bought has appreciated every year since it was built.

And the worst neighbors were definitely those with the house. Everyone knew everyone’s business and most disliked some other neighbor or two. Conversely, we now share our space with 21 other condos where people greet each other but otherwise deliberately maintain distance. It makes for far more pleasant surroundings.