Common Queries regarding Renovation (in Tokyo)

Q1 What is the difference between “reform” and “renovation”?

"Reform" and "renovation" are often confused, but their meanings are very different. "Reform" is a Japanese-English word that was originally used to mean altering clothes that no longer fit. When it comes to housing, the term “reform” can be thought of as “restoring the house to its original state.'' On the other hand, “renovation" is a coined word that combines "re", which means rebirth, and "innovation", which means innovation and innovation. This refers to ``creating a space with new value, without being limited by the state it was in when it was newly built.'' Renovation is not just updating the exterior and interior of an existing property, but skillfully combining the elements of the property with desired elements such as location, money, floor plan, interior, etc., to create an original home. . Renovation is a rational method with many possibilities for people who do not think of their home as a status or a goal in life, but rather want to achieve their own "ideal life."

Q2　What are the advantages and disadvantages of second-hand renovation?
Advantages of second-hand renovations include: ``Used houses are more reasonable than new houses,'' ``A wide range of property options,'' ``Less loss of asset value compared to new houses,'' ``Easy to adapt to changes in lifestyle,'' and ``A space of your own specifications.'' Examples include "can be created." The disadvantage is that properties built before 1980 were built to the old earthquake resistance standards, which were before the current Building Standards Act came into effect. However, the actual seismic performance of a building varies depending on its shape, structure, ground condition, etc., and cannot be uniformly determined based on the age of the building. The age of the equipment is also a concern, but this can be renovated through renovation. In addition, used renovations involve various stages such as property purchase, design, construction, etc., and the flow of money is a little more complicated than new construction, which is a "buy and go" process. However, in recent years, one-stop services that provide comprehensive support for used renovations, from property search to design and construction, have become commonplace.

Q3: I'm interested in renovation, but where should I start?

When considering buying a house, many people think of things like "3LDK layout," "over 80 m2 in size," and "within a 10-minute walk from the station." However, renovation is not about "choosing" a house, but about "creating" one. Rather than the specs of the property, it is important to first imagine the "ideal life" that you really want to live. For example, the "◯LDK" system is well-designed, but it tries to fit everyone's life into a mold, such as "eat your meals here" and "have family gatherings here," without any intention of the people who live there. People's lives are surprisingly complicated. Some people consider the kitchen to be the center of the family, while others may want a dining room that can accommodate 10 people, even if the kitchen is small. The first step in starting renovation is to imagine the scene of your "ideal life" and think about the environment that you really need for that.

ADVICE
Renovation is "editing your life"
Our lives are now reaching a "maturity stage." Rather than trends or ephemeral things, we are becoming a society that demands a new "quality of life," such as thinking about what is truly important, finding value in a life where things are cherished and used for a long time, and seeking "stories" in daily life. In the midst of this, changes are also coming to the home, which is the "vessel" of life. Some people buy used apartments alone and renovate them, some people move according to their life stage, and some people look for their final residence in the suburbs. With the diversification of lifestyles, the state of housing will become increasingly diverse. Renovation, which allows you to choose "location, building condition, floor plan, design, money, ease of selling/renting" as you like and create a lifestyle that suits you at that time, can be said to be a housing option that meets the needs of the future.

Location, building condition, floor plan, design, money, ease of selling/renting... Identify the elements necessary for your "ideal life," combine and edit them to create the perfect home for you. That's the joy of renovation.

Q1 Are second-hand properties really a good deal?

When looking at the price of a new apartment in terms of annual income, in Tokyo in 2015 it was 11.3 times the average annual income of 6.27 million yen, which is an increase from about 10.6 times the previous year, and the gap between annual income and price is widening (※1). On the other hand, in Tokyo in 2015, the price of a second-hand apartment was about 8.6 times, and about 6.7 times in the entire metropolitan area (※2). As the popularity of apartments in urban areas has increased in recent years, the price of second-hand apartments has also been on the rise, but they are still reasonable compared to new buildings. Even if the property is old, owning a home in the city center can be an asset. Another attractive feature of second-hand properties is that their asset value does not decrease much. The asset value of a new apartment decreases immediately after purchase, but the value of a second-hand property begins to stabilize after it is over 20 years old. If you buy an old apartment from the beginning and renovate it, the property value is less likely to decrease, so you can reduce losses when selling. It can be said to be a low-risk choice for a lifestyle where you move according to your life stage.

Q2: Are the seismic and thermal insulation performance of used properties okay?
 
In the case of condominiums, seismic performance is related to the structure of the building, so it cannot be changed by individual renovation. One guideline for evaluating the building performance of condominiums is whether they are new seismic resistance built under the Building Standards Act revised in 1981, or old seismic resistance before that. However, the actual building performance varies depending on the shape, structure, and construction of the building, so it is best to judge after receiving correct knowledge from a professional. The long-term repair plan of the building by the condominium management association is also useful. You can check whether large-scale repairs such as seismic reinforcement and replacement of water supply and drainage pipes have been carried out, and you can understand the maintenance status of the building. The same is true for detached houses, and in this case, you may not be able to understand the condition unless you check the structure by demolishing part of it. In the case of detached houses, seismic reinforcement can be carried out if necessary. As for insulation, the performance of both the private parts of condominiums and detached houses can be improved by insulation renovation.

Q3: Are there any points to consider when choosing a used property?

If you have vague ideas like "good location, spacious, and as new as possible," it will be difficult to find a property. First, imagine your "ideal life" and start by sorting out the priorities of important things. Then, search based on conditions such as the environment, convenience, and location status. It's also a good idea to search without limiting the city. You may discover something unexpected. The conditions and price of the property will change depending on whether you are living long-term or short-term. Before simply determining the size and layout conditions based on the number of family members, it may be a good idea to create a temporary floor plan with an architect. You may find new indicators, such as not needing a private room or wanting a wide entrance. The important thing is to determine what cannot be changed by renovation, such as the "city," "surrounding environment," and "common areas." Find a life-sized ideal that balances money, life, and property, and start looking for a property with a clear goal in mind.

ADVICE
Used homes expand the possibilities of how you live
Used homes are more affordable than new homes, giving you the freedom to think about the combination of priorities within a limited budget. For example, in the Aoyama area of ​​Tokyo, it is not uncommon for a new apartment of 60 to 70 m2 to cost over 100 million yen. If you look at used apartments, there are some in the 40 million yen range. Even if you spend 10 million yen on renovation, you can get a home with your preferred layout and interior for about half the price of buying a new building. In addition, used properties do not lose much value, and you can consider moving with the assumption that you will sell it, giving you freedom in how you interact with your home. The number of used properties in circulation is increasing year by year, and there are various properties scattered over a wide area, and the wide range of options is the most attractive thing about them. There are 930 stations in Tokyo. If you combine Tokyo, Saitama, and Kanagawa, the number reaches 2,034, and each town has its own color. "Towns" are also part of life. When renovating used properties, you can have the fun of choosing a town that matches your "ideal life".

Q1 How much does renovation cost?

When buying a used property and renovating it, the cost breakdown is "property cost", "renovation cost" such as design and construction, "miscellaneous expenses" such as property brokerage fee, loan guarantee fee, property tax (generally 5-10% of the property price), and other moving expenses and furniture purchase costs. If you remove all the existing interior of the apartment and build a fully custom-made skeleton, the estimated renovation cost is 6 million yen for 50 m2 and 9 million to 15 million yen for 100 m2. In recent years, renovation costs can be covered by a mortgage, but in order to determine the amount of borrowing at the property purchase stage, it is necessary to determine the total cost at an early stage. It is important to share the image of the house building with the architect and construction company in advance and create a system that can respond immediately when a property is found. If it is within the mortgage limit, it may be possible to plan with zero personal funds, but it is preferable to have personal funds of 5-10% of the total budget.

Q2: Can I renovate and sell or rent the house I lived in?

Used properties, which have less loss of value and are more advantageous than new properties in terms of location, are suitable as a lifestyle option assuming relocation. For example, you may buy a compact used apartment in the city center when you are single, renovate it, and then move when your family grows. It is possible to live in a house that suits your lifestyle at each stage of life, such as selling or renting out your previous home. In fact, many of Blue Studio's customers have chosen to renovate a used house with the assumption that they will move in the future, and then moved afterwards. When assuming relocation, the key is to consult with someone about renting or selling. In order to sell under favorable conditions and find a good tenant, you need the cooperation of an expert who is well versed in renovation. Blue Studio also supports customers when selling or renting their homes, and there have been cases where they have sold for the same price as when they purchased them. It is also important to take relocation into consideration when planning your finances.

Q3: Can I get tax benefits for renovation?

The home loan deduction can be applied even if you buy a house by renovating a used house. However, there are various conditions such as the age of the house and the area. What I want to focus on now is the tax benefits related to "gifts". If you can increase your own funds and reduce the amount of your home loan by receiving a gift from your parents, etc., the total repayment amount will change significantly. In addition to the basic deduction for gifts up to 1.1 million yen, there is also a "Special Exception for Gifts of Home Acquisition Funds" system that provides a tax exemption of up to 30 million yen when receiving financial assistance for home purchase from direct relatives. Recently, more and more people want to live close to or together with their parents for the purpose of child-rearing support. For example, if you renovate your parents' house and live with them, you may be able to apply the "Special Exception for Small Residential Land, etc.", which reduces inheritance tax if you inherit your parents' house after having lived together for a long time. In a survey by Recruit Housing Research Institute, more than 50% of parents answered that they would like to help their children with the financial assistance for home purchase (※3). Once you have decided that you want to buy a house, why not casually talk to your parents about it?

ADVICE
If you want to renovate smartly, start with a financial plan
Competition is fierce in popular areas, so once you find a property, it's a race against time. Having a clear image of your "ideal life" in advance and planning your finances properly will determine whether you win or lose. First, find out the total cost of purchasing a property and renovating it. The total budget is calculated based on the following two points: (1) Money available now = personal funds + loan limit (2) Money to be used in the future = loan repayments + management fees/repair reserve funds + taxes. The mortgage borrowing limit is generally said to be "household annual income x 6.6", but this is only a guideline. Even if you use an online loan simulation, be careful because "amount available for loan = amount available for repayment" is not the same as "amount available for repayment". After purchasing, in addition to monthly repayments, repair reserve funds and management fees will also be incurred for apartments. In order to enrich your life after purchasing, make a financial plan that is not too difficult and approach the renovation. Once you think about money thoroughly, your perspective on housing and life will change.

Q1: How far can you go in renovating an apartment? Many people believe that changing the layout of an apartment has many restrictions. However, if you remove all the existing interior and leave it in a skeleton state, you can create a space from scratch. In the case of an apartment, the front door, windows, and the walls, floors, and ceilings of the building are common areas and cannot be modified, but you can freely create other interior areas. What you need to be careful of here is the apartment management regulations. Depending on the building, the management regulations may not allow flooring, or only unit baths may be allowed. The property you found was actually not suitable for your ideal renovation! To avoid this, the key to success is to share the image of the space you want to live in with real estate and architectural professionals in advance and choose a property with their cooperation. It is possible to change the location of water areas such as the kitchen and bathroom, but be careful not to affect the lives of neighboring apartments or those living on the floors above and below by rerouting the water supply and drainage pipes.

Q2 Can I freely renovate a detached house?

A detached house allows you to create a three-dimensional space by creating an atrium or loft. Another appeal of detached house renovation is that you can control the relationship with the outside, such as by adding more windows or reducing the size of the building to create a garden. In addition to improving the insulation performance, earthquake reinforcement is also a key point. However, with detached houses, there are many things that cannot be determined until part of the building is demolished, and there are restrictions on the layout that can be changed depending on the type and condition of the structure.

There are also properties for sale with used detached houses that are illegally built and do not qualify for a home loan, such as those that exceed the floor area ratio, but there are also cases where a home loan can be applied by renovating the house, including reducing the size of the building. When renovating a detached house like this, it is essential to get the help of an expert from the property search stage. This should significantly expand the possibilities for property selection and renovation. In addition, with detached houses, you will need to maintain the building yourself, so keep this in mind when planning your renovation.

Q3 How can I reduce the cost of renovation?

There are various ways to reduce the cost of renovation, one of which is "partial renovation". Buy a recently built or renovated property and renovate only the living/dining/kitchen area or only the bathroom. If the original layout and interior of the property are close to your ideal, you don't necessarily need to completely renovate it. "Making use of the existing" is a common technique for reducing costs. Recently, some people have started choosing to "renovate a new house". In some cases, it can be more reasonable to partially renovate an affordable new house in the suburbs than to completely renovate an old house, including earthquake resistance and insulation. Another way to reduce initial costs is to start out living in a spacious one-room apartment as a couple, save up money, and then create separate rooms as your family grows, gradually renovating as your lifestyle changes.

ADVICE
Renovation style chosen based on "the life you want to live"
It is important to create an image of your "ideal life" when working on creating a space. Renovation allows you to create a space from scratch without being bound by the existing layout or interior. Because it is free, it is necessary to determine the priorities of the necessary elements. Creating a space begins from the property search stage. Find a property that will make your ideal life come true with the help of real estate and construction professionals. As mentioned in A1 of STEP 3, the estimated cost of apartment renovation is 6 million yen to 50 m2, and 9 million to 15 million yen for 100 m2 if you create a full order from the skeleton. Many people work on partial renovations with a budget of 2 million to 3 million yen. For detached house renovations including earthquake-resistance reinforcement and insulation renovation, the estimated cost is 15 million to 20 million yen for 100 m2 or more. Another advantage of choosing a property with the support of an expert is that you can get an estimate of the cost of renovating the property, making it easier to make a proper financial plan.

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Next issue to come 2024 November 10