At the time of writing this, I was sitting in my apartment in the lesser known city of Gifu, in Japan. I kept thinking to myself, “is it worth getting a free house in Japan or investing back home?“
Japan is giving away free houses called Akiya’s and people around the world, especially Americans, are raving about it and buying them. An Akiya is a Japanese term that refers to an abandoned or unoccupied house. These properties often become vacant due to factors such as death, population decline, family structure changes, and economic hardship. While they might seem like a fixer-upper, Akiyas can present unique opportunities for real estate investors, particularly those seeking affordable housing options.
I’ve been observing both the Japanese and Zambian real estate markets. While these countries offer vastly different landscapes, it’s fascinating to compare the potential returns and challenges associated with investing in each market.
Akiya in Japan: A Unique Opportunity
- Population Decline: Japan’s declining population has led to a surplus of Akiya. This can make it relatively affordable to purchase a property, even in desirable locations. However, this population decline also means there are less people available to rent your house.
- Renovation Costs: the initial purchase price of an Akiya can be significantly lower than a newly constructed home and sometimes they are given out for free. The catch is that you have to carry out renovations. Sometimes they are sold with property inside meaning you will incur the disposal fees.
- Language Barrier: For non-Japanese speakers, navigating the property market and renovation process can be challenging. However, with the right guidance and resources, it’s certainly possible.
- Cultural Differences: Would a Japanese person rent from a foreigner? I’m not sure, but having a language barrier and cultural differences might chase away potential tenants. In Japan they have what is called key money for example. This is paid to the landlord as a thank you for allowing the tenant to stay in your house.
- Return on Investments: If you find a good Akiya in a place where lots of tourists go, it can easily be turned into an airbnb with potential to recover the investments in a lesser number of years. Assuming you get the house almost free or at a very affordable price.
- Earthquakes: Japan is prone to earthquakes. A building that was built 30 years ago has survived at least 1 major earthquake. Building codes have also been updated since 30 years ago to offer better earthquake resistance which old houses like Akiya’s might be lacking.
Building in Zambia: A Growing Market
- Population Growth: Zambia’s growing population is driving demand for housing. This presents a significant opportunity for real estate investors and developers. The population is projected to continue growing just like the rest of Africa.
- Land Costs: Compared to many developed countries, land prices in Zambia are relatively low. This can make building new homes a more affordable option.
- Construction Costs: While construction costs can vary depending on location and materials, they are generally lower than in many developed nations.
- No language barrier or major cultural differences: Unlike Japan, Zambian culture is not so different from western cultures and its easy to understand.
A Comparative Analysis
When comparing Akiyas in Japan and new builds in Zambia, several factors come into play:
- Initial Investment: The initial cost of purchasing an Akiya in Japan is supposedly low but for the same amount of money, one could build multiple houses in Zambia. The tricky part about Akiyas is controlling the renovation costs.
- Long-Term Returns: The potential for long-term returns can vary depending on factors such as location, market trends, and the quality of the property.
- Risk: Investing in an Akiya involves some risk due to potential renovation costs and the need to understand local regulations. There is also the risk of earthquakes destroying your old building. Building a new home in Zambia offers more control but also carries its own risks, such as construction delays and cost overruns. However, these can be mitigated against.
Conclusion
Both Japan and Zambia offer unique real estate opportunities. While Akiya in Japan present a potentially affordable option, building a new home in Zambia can provide greater control and potentially higher returns. The best choice for you will depend on your individual circumstances, risk tolerance, and long-term goals. For me, Zambia takes the win. WHICH ONE DO YOU THINK IS BEST FOR YOU?
