Buying old houses on countryside land

[misoandpickles]

Hello all, first post, yoroshiku and all that.

I'm mid-40s, divorced, have PR, a child, and am seishain at one of the most prominent local companies. I live out in the countryside and will for at least another 12 years, which means that there's a real possibility of retirement here.

I'm looking to make my last move for a while, and since I like old houses and don't like apartments I am considering buying an older property. Out where I live there are two general patterns:
One is our town of residence. It's known for its quality of life, the population is actually increasing, and rice fields are being filled and mountaintops sliced for development. There are old houses available but one actually has to pay for them. *gasp* Two I'm looking at now are 4.5mil for a smallish place that's in good shape, and 8mil for a big old farmhouse that will need some work but would be a good place to live. The 8mil is basically just the value of the land it's on from what I understand.

The other pattern is the neighboring town of 70,000 or so. The city center is hollowing out, and there's a city office that manages properties in hopes of having people move in. There are a number of properties available for 1-2 mil yen, with perhaps the same amount required in renovation.

For example, 60,000 yen rent times 12 years is 8.6 million yen, which is about the price of the most expensive property I'm looking at. Naturally ownership will come with extra costs but with its benefits too. A big one would be that instead of a 2.5 room box I'd have an entire house!

Word has it that loans at the local bank are easy to come by for employees of my company. And I would try to get a rent-to-own deal for the first year or two to make sure there's no problems I overlooked.

And in 12 years I would own outright a decent old house whose paper value is zero, and that might even be a liability.

Very curious to hear people's thoughts on the situation, and about ownership of depreciating real estate assets.

[RetireJapan]

One thing to keep in mind is the type of land. Land that is registered as farmland enjoys much lower tax rates, but you need to be registered as a farmer in order to build on it. So you can buy an old farmhouse, but if you are not a farmer you would not be allowed to rebuild it (not sure how much renovation you can get away with).

We looked at this option around here, but ended up giving up as we couldn't figure out the (seemingly arcane) rules

Anyone else?

[RetireJapan]

Very curious to hear people's thoughts on the situation, and about ownership of depreciating real estate assets.

Especially in Japan, the longer you will live somewhere the more sense it might make to buy outright. Transaction costs are large (5-10%) of the purchase/sale cost, and capital gains of buildings are still unlikely, so you should run the numbers for total cost of ownership (plus opportunity cost of alternative uses of the money) vs total cost of renting and see how the options stack up.

Then do whatever you want to anyway, which is what most people do. Buying a home is essentially an emotional decision for most people

[misoandpickles]

I shouldn't have said farmhouse, because it's zoned as 宅地 and doesn't come with any farmland. It's more like a farmer's house--big doma and mud area, a working well, and three garages.

Ownership in 12 years, another 6 years to save for demolition, and I'll basically own it free of encumbrances before I retire.

The more I think about it the more I like it, which makes me really worried I'm overlooking something important...

[adamu]

Here's a Youtube playlist you might enjoy, by a guy that bought and renovated his own farmhouse. I actually boycotted this channel ages ago because he has a bit of an attitude problem, but the videos are interesting. https://www.youtube.com/watch?v=UZfoMTP ... A2A50898A3