Country house


Country house

Agano, Niigata, May 24, 2009

(so the story begins)

Depart Tokyo 09:21. Arrive Tokyo 20:54. Distance covered in the day: 723km (449 miles). Cost: Most of two tankfuls of fuel, Y11,145 (GBP74.00, $117.58), Y3,700 in (discounted) highway tolls, and Y252 for a miserable onigiri rice ball and a bottle of chilled tea, all I had time to eat and drink. Just to see a couple of properties. Was it worth it? Oh yes.

This was the latest in a series of very occasional random quests for the ideal home that have taken me from the Loire to Bali to London in real life, and everywhere from Hawaii to Shropshire to Costa Rica on the Internet. This time I was in search of the perfect kominka (old Japanese house, usually a farmhouse), and I thought I’d found one.

Kominka are not an easy quarry in a country where I would anyway guesstimate that at least 95% of the population lives in accommodation built after the war. There is scarcely an active market for them, as the mostly elderly farmers that live in them tend to stay put until they keel over, at which point the children, seeing no use for the house they have inherited and barely any demand from others for it, either leave it to rot, sell off the land for development, or tear down the house and build something modern, comfortable, and efficient in its place. You certainly can’t ramble down the streets of a rural town or village and lust over the property porn in estate agent’s windows.

There is however a tiny market for kominka on the Internet; many are in states utterly uninhabitable to modern, creature-comfort loving, urban eyes, although probably structurally sound enough for another century of inhabitation. That these places have asking prices of around Y3m-Y6mn (GBP19,900-GBP39,800, $32,000-$64,000) is testament to their unloved nature. I’ve thought long and hard about buying one of these wrecks myself and doing it up (or rather paying someone to do the dirty work), and it’s a route I still might take.

In my rooting around I stumbled across a firm called Shiawase Home (“happiness homes”), located in Niigata Prefecture in what’s called “ura Nihon” (“the back of Japan”), which covers the thinly populated Sea of Japan-facing coast of the main island and which is a designation deemed so offensive that broadcasters have added the term to their list of banned expressions. In addition to the usual humdrum real estate operations, one of Shiawase Home’s business lines—and this makes them very unusual and highly commendable—is that they buy up kominka and other vintage properties, renovate them, and then sell them on.

On the Shiawase Home website a couple of weeks ago, I came across a kominka that on first blush looked perfect: recently refurbished, elegantly proportioned, sizeable (180sq m, 1,940sq ft) but not dauntingly large, and with an attached adobe storehouse known as a “kura”, which to my mind are pinnacles of folk architecture; I’ve long desired to get my hands on one. I kept returning and returning to the website and knew that my curiosity would have to be satisfied, so I finally made an appointment to see it.

Which is how I came to be sweating in traffic on the southern reaches of the Kan-Etsu Expressway, trying to battle my way out of Tokyo, as the mercury pushed on towards 30 degrees Celsius one Saturday morning in early summer. It was the first time I’d ever driven the entirety of the Kan-Etsu in daytime, and despite the early traffic annoyances, it was one of the great drives of my life. Leaving Tokyo behind and entering the “home counties”, the land assumes a gradual but perceptible upward gradient, until the largish population centres of Gunma Prefecture are done with, when the blacktop reduces from three lanes to two, the volume of vehicles thins noticeably, the gradient steepens, and the mountains crowd in closer. Onwards and upwards through tunnel and across viaduct to the Kan-Etsu tunnel, which at 11km, was on completion in 1991 and for many years the longest dual-pipe road tunnel in the world—a factoid for fellow tunnel fans out there. The tunnel passes under the 2,000m peaks of the Mikuni range and across the Gunma/Niigata border; mid-tunnel, I began to see the stream of wall-mounted lights dip away and realized that I’d crossed the Pacific/Sea of Japan watershed.

On the Niigata side of the tunnel, the clouds were closing in and the temperature only in the high teens; first up the surreal rural skyscraper landscape of ski-resort Echigo Yuzawa, and then down, down, down, criss-crossing the Shinanogawa, Japan’s longest and mightiest river, to the Niigata plains, covered with shimmering rice paddies for miles in every direction.

I found the house about 40 minutes before my appointment and had planned on doing a little exploring before returning; there was no escaping, however, the stumpy, chubby, and cheerful Ogawa san, Shiawase Home’s representative, who bounded over to the car proffering his business card. Ogawa san grew up in Agano, which is about 30km outside the prefecture’s largest city, Niigata (population of around 800,000), and having spent most of his working life in Tokyo, returned a few years ago to semi-retire into this salesman’s job. He got straight to work with a well-rehearsed guided tour of the farmhouse; there are additional pictures here at the agent’s website, though not for long.

This is the property from the front; the kura is off to the right. The concrete car apron, which I suspect is new, would be first against the wall.

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As UK estate agent argot has it, “the property benefits” from having its original itabei plank fencing intact; across much of the land they’ve been replaced by hideous concrete walling.

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The kura was exquisite, and could easily be converted into a studio, a library, an office, or accommodation for guests. Here’s some of the delightful exterior detailing. Love the kawara ceramic tiles.

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The lintel over the entranceway had me in Mondrian geometrical rapture, as did much of the house.

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The main building has three largish Western-style rooms scattered around, with in addition a dining room/kitchen area on which every expense has been spared—but I can’t blame Shiawase Home, not when you’re working with the sort of budgets they are. The plain but well-updated bathroom has a view of the pine in the back garden and I could easily imagine passing a blissfully balming hour or two in the bath reading; in characteristically Japanese fashion, Ogawa san apologized for it not being a “unit bath”, an all-in-one bathroom in which the bath, the sink, and even the walls and the ceiling are molded out of a single piece of plastic. I gallantly told him that I really didn’t mind.

The centerpiece of the house, though, is a five-room (seven if you include the smaller “engawa” verandah rooms) ensemble of Japanese-style rooms that are an achingly beautiful symphony of texture, colour, light, and space and their absences, as open-plan or not as your mood decides, an ensemble that is an amazing, unintended, reconciliation of the rustic with the modern and which would be fully worthy of space in an exhibition of Japanese design and its influence on 20th century Western art. My hurriedly taken photos fail to do it any kind of justice.

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Out the back, there’s a garden of sorts, which could be worked on, although I was a tad wary of the tangled network of spider webs covering every shrub.

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Behind the garden there’s a barn, which looks unprepossessing enough from the outside but which is clearly from the interior as old as the house itself. Inside is the fairly recently acquired and elaborate rice-milling machinery, as well as big vats for making pickles and an array of hoes, saws, threshers, scythes, and hand-winnowers. Ogawa san said that they didn’t know what to do with the barn, almost apologizing for leaving it standing, and promised that the mess out the front would be promptly cleared up on purchase. Vulgar, I know, but I’d turn it into a six-car garage.

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No one knows exactly when the house was built; the earliest record the agents have for it dates from Meiji 31 (1898), when Niigata was, I discovered today to my utter astonishment, the most populous prefecture in Japan, bigger than Tokyo or Osaka or Nagoya, I guess thanks to its bountiful rice-bowl. The recent history of the house, as related by Ogawa san, is sadly all too predictable: the widowed rice-farmer, increasingly infirm, was invited by her son in late 2008 to come and live with him in Chiba Prefecture, on the eastern outskirts of Tokyo, and she has left many of her possessions behind, including these old tansu chest-of-drawers.

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So it’s on the market for Y13mn (GBP86,000, $136,700). I could probably shave 10%-15% off that. Here are the top pros and cons.

Pros

1) It was love at first sight. I know full well I’ll have to do a lot of searching before I find somewhere that is as spiritually and aesthetically satisfying.
2) I can move all my books and junk up there, move into an apartment half the size in Tokyo, and the house pays for itself in six years.
3) I could have nine cars! OK, let’s not be greedy, but I could at least unleash my obscure desire to collect, or at least experiment with, odd Japanese vehicles of all vintages.
4) The conversion of the kura would be a fantastic project to be leisurely pursued.
5) Let’s be honest, it’s as cheap as chips, even at the inflated post-restoration price. In a G7 nation, a quiet, neglected masterpiece of folk design going begging—it would cost five times the price in Surrey.
6) These houses need to be saved—while I’m sure Shiawase Home will find a buyer, there’s no guarantee they won’t do something shocking to it.
7) Weekend parties have potential to be lots of fun.

Cons

1) It really is a long way from Tokyo for a weekend: three hours and three trains, assuming you can get a seat.
2) There’s no heating. Japanese farmers were rock hard. Niigata’s average temperature is below freezing for two or three months of the year. There are traditional Japanese ways around this, but none are going to involve central heating or anything that would involve wastefully warming the whole place all at once.
3) I’ll never get back what I pay. Niigata’s population is roughly what it was in 1945 and is going to ebb back to late 19th century levels in the next couple of decades. The regional economy, needless to say, sucks.
4) The natives may not be friendly. The house is in a hamlet of half-a-dozen dwellings, and I wouldn’t have automatic right-of-way back down the lane on the left-hand side of the house to the barn.
5) If the translation gravy-train runs out, could I live there permanently? It would seem implausible.
6) I have absolutely no connection with the town or even the prefecture. Not something that ever bothered my parents when moving, but…
7) Do I need to complicate my life further in this way?

After our tour was over, Ogawa san surrendered an hour of his time to show me another property Shiawase Home have on their books at the moment, this time in the centre of Niigata City, which was exceptionally kind of him as I made it plain in advance that I had no intention of buying it. I think he was—rightfully—proud of the restoration.

The Shiawase Home website bills the place as “Taisho Romanesque”—the Taisho era covered the years from 1912 to 1926 and saw a brief flowering of both democracy and a renaissance in the arts that was snubbed out by the low, dishonest decade that followed. Ogawa san told me that the building was originally a restaurant that geisha frequented; he may have meant that it was an authentic “ochaya” (geisha tea house) or that it was some sort of hybrid establishment, I wasn’t entirely sure. Either way, it is now one of the most extraordinary private residences I have ever seen, all the more so for being situated in a shotengai shopping street that is so bedraggled and forsaken that it must have been bypassed the best part of half a century ago.

My rushed snapshots entirely failed to do it justice, so here is the link to the photo album on the Shiawase Home website.

http://www.shiawasehome-reuse.com/oonomati.zisya.syasinsyuu.21.3.14a.html

All yours for Y33.38mn (GBP222,400, $354,700).

Ogawa san escorted me to the nearest interchange and bade a cheery farewell. I accelerated full throttle into the descending dusk and made it back to the lowlands of the Pacific side of the archipelago before night fully fell.

So should I or shouldn’t I? Do I or don’t I?

40 responses to “Country house

  1. It looks wonderful! I`d do it. Don`t worry too much about the locals being unfriendly – as you said, many of them won`t be there much longer anyway. And you`ll have somewhere not just to keep your library, but expand it….

  2. Well, I’ve never heard of any gaijin in japan expressing regret about some lovely country place he ended up owning…

    And heating is overrated; that’s why god invented wool sweaters and crates of wine!

    Mmmmm, weekend parties, mmmmm…

  3. Do it…if you love it. A house is a place to live…and think of the raging parties you can have!!!!

  4. Mmm, love at first sight indeed. I would LOVE to live in this house (OK, I’m not invited…). The locals might well love you. And once you’ve got a house there, you’ll become part of the community, as long as you accept the ‘hen na gaijin’ role. Hmm.

  5. Looks like the Japanese version of the 6 bed vicarage to me! How can you possibly not buy it?

  6. Louise Miller-Marshall

    Buy it, but make sure you have an escape route. My father (who has just died) loved his remote farm in the depths of the South American rainforest, but at the end felt trapped there and isolated from friends and family. On the other hand, getting it now whilst you’re still young enough to have the energy to make yourself a part of the local community has a lot of advantages too. And it is lovely!

  7. Julie Manning

    It is a beautiful house. I love it. I can imagine you there. I think if it feels right, you should go with your instinct……

  8. Fascinating write up of the experience, Richard.
    I wouldn’t worry about the neighbors. I have a British friend in Shimane who lives out in the middle of nowhere, can hardly speak a word of Japanese, but makes a point of making himself very much a part of the landscape and has no problems whatsoever.

  9. So, what was the decision? (Beautiful place, fershure)

  10. Oh, my word. The “Taisho Romanesque” place is amazing.

    • Yes, it is absolutely stunning, and still for sale, more than a year after I went to see it. Yours for about $300,000, but I’m sure by now they’d take an offer. I would if I could – actually, I probably can – but I really shouldn’t… Negatives: the neighborhood is essentially in ruins, it has only a handkerchief of a garden, and it would cost a small inheritance to run. You might also feel weighed down by history. A crying shame that a place like this has found no takers for so long – I guess Japan has really turned its back on its past for good, as there are at least a 1.5mn millionaires in the country still, for whom this would be a minor dent in the bank balance.

  11. Richard,
    Follow your passion and get this house. A journey of several hours from Tokyo through wonderful mountains should not be an obstacle. I lived in Tohoku for six years and I always found rural Japan to be welcoming , so I wouldn’t worry about neighbours. A couple of questions: what would the maintanance, utilities and taxes cost? Does this former farm house property include adjacent land with agricultural potential?

  12. I share a similar pipe dream–most likely never to be realised– which means I spend far too much time (especially when I should be working) looking at http://www.inakakurashi.jp – a treasure trove of listings for old Japanese houses in various states of repair, searchable by prefecture.

  13. What another great post! The house looks great… I can’t imagine that it’s colder than those Aomori-ken farmhouses. Shiawase house looks like a deleted scene from Kill Bill. If it weren’t for the ugly front to the place, I’d nearly pick it over the farm house. No, not really.

  14. I don’t get it.
    You were looking for an ideal place, and you found a place you really like.
    You went to the trouble and expense to go out there. You knew all of the cons before going out there. You have said you can afford it.
    Why did you not buy it?

    • Well, the expense and trouble of getting out there was really trivial in comparison with the cost of the property… Three reasons: I underestimated how impracticable it would be to keep it warm in the winter, I needed to feel under my feet how far it is from Tokyo to the outskirts of Niigata (too far for a civilised weekend), and finally a throwaway comment from veteran AP journalist John Roderick in “Minka: My farmhouse in Japan”, which I can’t find now but runs along the lines of, “You think you own things, but really things own you.”

  15. Steve Beardsley

    Hi,
    Just enjoyed reading your account of the Nigata property venture.
    Did you go for it? I did – 5 years ago – Nagano, not Nigata.
    If you need some help or advice, get in touch.
    Steve.

  16. I went for a place in northern Niigata (Murakami) a few years ago, and paid someone to redo it in almost completely original style (everything from the front and most of the inside looks original, though there are modern toilets and a pro kitchen, we put underfloor heating under the original floorboards, there is insulation under the whole house to keep the cold winter air out (as much as is possible in a place full of holes)), and we put a large bath into one of the kura (now called ‘kuranoyu’). It is a wonderful place to escape to, and is fantastic for parties. The advantage of a place like this is that it can sleep A LOT of people as it stays clear of furniture and clutter and it is wonderful to have friends there. It is also fantastic for our kids to learn about nature, how to grow things, how non-Tokyoite non-gaijin live, and how nature encroaches.

    Your comments above about distance, heating cost, and ‘you think you own things but…’ all ring true. I wish my place were closer. I wish it did not cost so much to heat in winter (about 3,000 yen a day in deepest winter – combination of wood and kerosene), and once one owns it, it is a ‘sunk cost’ because one is now ‘stuck’ with that house, not sampling others. But I do not regret it for one minute, constantly wish I could spend more time there, and have learned to deal with the 4-hour drive on Friday nights before a long weekend (once you get in the groove, 4hrs isn’t much more than 3 unless one really hates driving).  Instead I can recommend inland Chiba on the Boso peninsula as an alternative location. There are lots of hidden little minka still there. Too far south towards Tateyama and it starts getting expensive, but I think the location bodes better for keeping value over time, and the winter weather is not nearly as severe.

    • Excellent, many thanks for that. I’ll look into your tip about the inland Boso peninsula, somewhere I’m anyway quite fond of. I’m also thinking hard about southwest Gunma toward the Nagano border, for reasons that will be revealed in later posts.

      • Southwest Gunma and Yamanashi are also good for finding minka, but SW Gunma can be VERY hot in summer and cold in deepest winter (and if driving, you get the brunt of the traffic jams anyway because of the jam on the KanEtsu just south of where the JoEtsu runs into it. I look forward to reading about your Gunma plans.

      • “SW Gunma can be VERY hot in summer and cold in deepest winter”
        True, true, although I’ve found one (well, a school in minka style) in a deep, lost, valley by a solid stream that would at least be soothing in summer. But these plans may take years to hatch.

    • Hi,

      My father-in-law has a place near Minakami in Gunma that he would dearly like to refurbish as you have done. I wonder, do you have any good links or contacts that I could pass on? In fact, if anyone lurking here has any good contacts, my wife and I would be very grateful.

      Have you considered building a rocket space heater? Not sure how they’d go down with building codes in Japan but really would be worth thinking about.

      His place doesn’t date back to the 19th century like the one in this post but I think it’s great. It has an enormous full height attic that runs the length of the house (used in the old days for silk worms) that would in my mind make a great studio for visiting artists (or something along those lines) and a fantastic kura that he showed me around just last month.

      @Spike,
      I’ve been slowly working my way through your essays the last year or so. I get so engrossed, it is rare for me these days to read such long pieces. I confess though, that I’d enjoy it more if I could work through from oldest to newest more easily.

      Hope all of you in Japan are ok. We missed the quake on our last trip to Gunma by less than two weeks (and were in Japan for the Christchurch one) so we’re feeling pretty lucky but by no means smug.

      Josh in NZ

      • Josh,
        We used a local general contractor, and had to be extremely clear about the point of the restorations. He got it. Still we had issues. It really helps to be on-site. Most sub-contractors do not “get it.” The actual work is not terribly difficult. The tough part is getting everyone’s understanding of the aesthetic. It is not natural for most craftsmen to want to keep the dirt/soot/patina in some places, and not in others.

        What is most important is a) keeping things hidden (relatively easy because most old minka are elevated and one can put lots of stuff under the house, but you’d be surprised what people will install in plain sight), b) keeping things simple (use simple wall switches, outlets, etc), c) making sure that people don’t do ‘stupid stuff’ (like using philips screws to attach floorboards (most carpenters just want to use their battery/compressor-driven screwdrivers), d) do everything humanly possible to keep the existing patina if that is the look you are going for. Cardinal rules are: no visible screwheads – use nails where possible, keep all the old flat wood you take out – it might be useful, and no wet scrubbing of unlacquered wood surfaces.

        Spend time planning. Getting everything sorted at the start. It will cost a LOT less overall if you can do that. If you are going to replace floorboards, run new water pipes, electric wiring, fiber optic cable, etc under the house, one might as well do all that first, then insulate underneath, then put the floorboards back.

        For walls, use a multi-step process to get sooty walls white again. They won’t wash, you have to apply another layer of plaster-like stuff. I recommend a product called “MK” rather than real “shikui” (the white plaster) on walls because it is only a little less bright, costs about a third in materials cost, and is actually easier to apply with a Japanese mortar than is shikui. Start by applying multiple layers of ‘akudome’ on top of existing soot-covered walls (let it soak in for a day or two each time), then primer, then MK. Our walls went from black to white with no bleed-through (applying wet shikui directly on top of old sooty walls will mean the soot will bleed through the thin shikui layer).

        Spend the money to get the ‘tategu’ (sliding doors and intra-room panels) cleaned, repapered, and re-fitted for the spaces they are in. They will look nice and slide more easily.

        Splurge for modern toilets.

        We did our kitchen with secondhand professional kitchen equipment. All told cost me about 120,000 yen for stove/sink/counters/cabinets. We have a 5-burner gas cooktop that any restaurant would be proud of, a large stainless sink, and stainless cabinets and counters. Easy to clean.

        For wiring, it should be easy and somewhat inexpensive to redo wiring (run it on top of beams). Extend outlets to warehouses where possible. Put outlets inside closets. Get your breaker upgraded (for old houses, they don’t have enough amperage capacity for modern devices like washing machines and microwaves). Buy antique glass lamp covers, avoid flourescent lighting.

        In our case, where we had floorboard issues, we searched for old floorboards from elsewhere, and also took floorboards which were originally under tatami rooms (and replaced those with flooring ply).

        Don’t accept the first cost estimate you get. We knocked down the first one received by 30-40%. We later added more stuff on so total cost was more than the first estimate, but we wanted to set an early precedent that we were going through costs with a fine-toothed comb.

      • Josh,
        I might know someone who would happily renovate your in-law’s place.
        You can drop me a line through the contact page on my blog.
        Alice

  17. Thanks Travis!
    Excellent advice. I will forward on and file for reference.
    Josh

  18. Nice writing and I agree, Niigata is far away and got cold winters. But there are many old houses around the “Hinterland”, not only on in Niigata. I moved to Karuizawa to look for an old house to redo while my wife would still be able to commute to work in Tokyo (70 min with seat reclined is not bad really). And I found a very nice Minka, Farmhouse with Kura and small building with a back garden big enough to actually build a second house should the need arise. Alas the bank was totally against us, no proper registering the house had been done by the former owner, the road in front was 3 m wide, far to narrow by modern standards. And the town (Saku), despite having the house on their homepage together with other empty houses, wasn’t taking any active role.
    In the end we will be building a new house now, but I will keep my eyes open for a small old place to reform, as a hobby. My advice: travel the old highways, Nagano has a very strong history and beside the main road of Nakasendo there is one towards the Japan Sea and another one towards Yamanashi. Along these you will find many old houses, though its tough to find the owner, and even more someone willing to sell! And beware of car traffic because many back roads are used by the locals as “shortcuts” because main roads are not many in the mountains and thus mostly stuffed during rush hours. And when you find your juwel-to-be, look below the house for stored planks etc that could invite termites and keep air from flowing to dry the house.
    There are actually more and more groups specializing in reforming Kominka, sometimes even dismantle and transport them from lets say Niigata (because of the heavy snow farmhouses are built very solid) to Kanto plain, but this will put a heavy price tag on the whole project because one has to buy the house, the transporting cost, and a fitting-sized piece of empty land!

    • Many thanks for that Wolfgang. I lived in Nagano for 18 months and I’ve always had my eye on it as a place with lots of potential, although I lived deep in the relatively inaccesible southern half, which is a good four to five hours on the Chuo with the wind behind you from central Tokyo.
      Funny you should mention Saku–I came across this fabulous old elementary school (in the top picture on the link) on the farthest edge of Saku (Gunma side) a couple of years ago and would love to do something with it, but I guess it’s state property.
      http://heyaneko.web.fc2.com/gh21.html
      One of these days it will form part of a blog post…

  19. Thats my house…

  20. Here’s what I do if I live in Japan. I find a young beautiful wife and have 10 children, embracing a fringe faith that is pronatalist, such as Unificationism.

    I umbue my decendants with this pronatalist faith and become like Johnny Appleseed for a country. Japan is still rich and nobody in the family will starve. The villagers will in short order be tearfully grateful for children and will help you raise them in their gratitude.

    Every member of your clan will have a beautiful house to inherit for very little from an empty country and aging business owners will ‘adopt’ members of your family to take over for them and teach them their crafts. This is a new world with no parallels in recorded history and its yours for the taking.

  21. I am looking to buy a two bedroom apartment in Brisbane, Australia – the price of which is about AU$50,000 more expensive than the amazing Taisho Romanesque…more proof that Australian property is one of the most over-valued in the world!

    • The truly, truly tragic thing is that the link STILL works, two and a half years on from my post. The real estate agents can’t get rid of it! The price is now down to Y22.5mn, sliced by a third since my initial post, which converts these days to AUD285,000 or so. And I’m confident they’d take an offer. The problem is that it is far too big and unwieldy for family accommodation and yet it’s difficult to know what else you’d do with it–sure, it could be turned into a restaurant, but independent restaurants with high running costs and high prices and minimal parking don’t generally fare too well in contemporary rural Japan. So, so tanatalizing.

      • It’s highly tempting (you could not get anything like that for the price here) but yes, highly impractical.

  22. Perhaps there is a third option to make use of this unsold beauty. Buy an old Japanese truck. Then carefully dismantle the building.

    Use the giant garage as secure site storage and for your “office.” – I.e Where you sleep on the weekends. Using the lorry, relocate it to where you want it to be. Is that possible? It is wood – Old Japanese buildings are amenable to this more than most countries, and so you could do it.

    You’ve then got guest accommodation as a supplementary income to assist in the relocation, and the vacant lot at the end is worth something. (Probably not a lot because, as you state, it is remote.)

    Nearly three years has elapsed…This thing is not moving.

  23. The value of the property is determined by the rental value and the resale value, corrected for inflation and interest.

    In an remote area like this basically the resale value is zero. The house itself is not worth much -it’s old and disfunctional- and since the area is depopulating the land also has value zero.

    The rental value is somewhere to $8.000 per year. Discounting this with 5% puts the value at app $160.000

    • “The value of the property is determined by the rental value and the resale value, corrected for inflation and interest.”
      One way of looking at it is indeed the net present value of the future income stream, less expenditures, plus residual value, as you suggest. I can do basic real estate maths, too.
      “In an remote area like this basically the resale value is zero.”
      Incorrect–this is not a spectacularly remote area (it’s about 20mins from a city of 800,000 people) and the resale value, while lower than the purchase value, would not be zero.
      “The house itself is not worth much -it’s old and disfunctional-”
      The house is lovely–are all old, dysfunctional houses “not worth much”? There are a few properties in London’s Kensington that are both old and by modern standards dysfunctional, but I think you’ll find they’re out of your pay scale.
      “and since the area is depopulating the land also has value zero.”
      So in all depopulating areas land has zero value? Really? Was that true of, say, London between 1940 and 1985, when the capital lost about a quarter of its population?
      “The rental value is somewhere to $8.000 per year.”
      That’s about Y50,000/month, or what a 2LDK in downtown Niigata would cost. Might I suggest it could be worth a little more than that?
      “Discounting this with 5% puts the value at app $160.000″
      So even on your arbitrary 20-year valuation metric, it was a bargain then, at about $125,000? Silly me, I should have bought it!
      But of course property can’t be subsumed to such a crass measure of value…

      • Pachiguy,

        $8000 per year, after you deduct for maintenance and taxes etc. So I think to rent it would be around $12.000 / year.

        I don’t understand your comparison with London. All population predictions show that Japan is shrinking in population. Big cities get more people so rural areas are hit even harder. This means that rural areas in -say- twenty years from now will have many houses for sale: Land prices for land on which you can build a house will not command a premium over -say- agricultural or forest land.

        The discounting is done like this: A dollar today is worth 1.05 dollar in one year. So an indefinate stream of $8000 dollars is worth today $8000*(1+1/1.05 + 1/1.05^2 + 1/1.05^3 + 1/1.05^4 + …). That sums up to $8000*(1.05/0.05) = $168.000

        B.t.w.: Is the house still for sale?

  24. For what it’s worth I’ll confirm that Niigata is a beautiful place to live and its people are quite friendly. No problem about being a gaijin, though visiting smaller towns will garner you the usual looks of curiosity, you’d be mostly ignored in Niigata city. I can definitely say that I really enjoyed my 18 month stay there and if I ever come into money where I could do that sort of thing (i.e. own property in more than one country), Niigata, Japan would be the first place on my list. Quiet, fertile and accessible. BTW if you don’t feel like doing the drive a seasonal shinkansen pass would do you good too, just 90 minutes on the express…

    Hope you find the place you’re looking for!

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