The 2024 Akiya Movement: Rebuilding Abandon Japanese Homes

[Chris Magistrado]

Hey BP,

I've been on here for almost 4 years now, time has really gone by since I first read David Greene's Long Distance Real Estate and Brandon Turner's books.
I did a quick search for Akiya's here on BP and didn't see much or any results. I'd like to share with you what I've been seeing and discovering recently about this investment opportunity I am considering. 

The Story
I was on Instagram and saw an Ad of this Swedish guy, Anton Wormann, https://www.businessinsider.com/moving-to-japan-abandoned-ho... who lives in Japan and has been taking old abandon homes (Akiyas) in Japan, renovating them, and turning them into Airbnb. He wrote a book about how he has done this with 3 homes already, and has built a community that has helped him accomplish this. Yes, foreigners can buy property in Japan.

The Japanese Culture & Economy
Wormann's book also talks about the Japan's culture and economy as it relates to real estate. Since Japan is susceptible to earthquakes, typhoons, fires, and previously wars, the culture for home ownership and rebuilding is not there as it in US and EU cultures. This, along with depreciating tax rate on real estate, makes houses themselves a depreciating asset, (the land it sits on appreciates, but that's another story). With an aging population, boomers and other are inheriting a depreciated asset that they have back-taxes to pay on, and they just let them sit. There are estimated 8.5M Akiyas in Japan, completely vacant, including in major cities like Tokyo, Osaka, and Kyoto. https://www.businessinsider.com/japan-millions-empty-home-ak.... There are even grants the government gives to improve/rebuild these homes. So what good is a depreciating asset? Cashflow.

Investor thinking
As David Greene has said multiple times, there is a number where the investment works, you just need to find that number. While the properties depreciate, there is one thing that can hold the value and that is cashflow. Some of these Akiyas go from anywhere between $10k-$80k. https://www.akiyabanks.com/ (Akiya banks are not banks, but are like a MLS) You can also take a loan out for them as well, but this is outside the scope of this post. If you look on AirDNA, you can see similar types of homes that can earn upwards of $35k-$50k/year in revenue on Airbnb. Wormann talks about 5 different investment strategies, people he know how has done them, and shares the ones he has done. Another Youtuber, Shu Matsuo, interviews other Akiya investors. Assuming you paid $80k to buy, $15k to renovate, $5k for everything else, $100k total, and received $35k/revenue a year. After 3 years, it'd be paid off completely. 35000/100000 = 3.5% which is a bit higher than the 1% rule, which seems much more difficult now-a-days in the United States.

Business in Japan
As an American, we can go there for 90 days, no VISA required. Shu Matsuo has said in his content that you can go, buy a house, and then have someone take care of it while you aren't there. I suspect you can also hire a management company and rent it out as well. Another option, is to get a Business/Investor VISA for Japan. This requires a few things, but the most important are, about $6k for the VISA processing, and proof of $30k in capital
towards the business. With this VISA, you're able to live in Japan for 1-3-5 years (depending on what they give you), up for renewal each year. 

My Idea of a Good Time

I'm speaking with a Japanese Immigration Law Firm next week to gather some more details about the VISA process. My idea is that this 2024, I fly to Japan, build a community of investors and leverage existing networks of contractors, real estate agents (called brokers there), and start buying, rebuilding, and renting/airbnb units as a business. I'm not sure if it's because I started searching and now I see a lot for Akiya related content, but with Anton's book that was released about 30 days ago, the ONLY English book about rebuilding Akiyas, I think there will be some shift in investing in these older style homes.  I will also share some of this in the investor section, but just wanted to reach out to this community and see if there are any interested investors like me. Thanks for listening, and Happy Holidays.