In recent years, the so-calledRenovation investmentReal estate investment, known as real estate investing, is being actively utilized.

However, it is still difficult to say that it has become widespread.

Many people probably don't know much about renovation investment.

Renovation investment can be used to improve the quality of an old apartment building.

It can also be said to be an investment method that can bring high profits if utilized effectively.

 

In this article, we will discuss what renovation investment is.

We will explain the advantages and disadvantages, as well as points you should know.

 

What is renovation investment? How is it different from remodeling?

First, let’s understand what a renovation investment is.

Renovation is slightly different from remodeling, as it does not simply involve decorating the interior.

Renovation is the process of making changes to a room in order to increase its value.

 

Renovation investment involves purchasing a used apartment and carrying out renovation work.

Renovation can increase the property value and make it worth more than the original purchase price.

This is a way to increase rental income by selling at a high price or setting a higher rent.

This has a major impact on the number of houses in our country, which is increasing year by year.

The number of housing units is increasing year by year, andIncrease in vacant housesis also noticeable.

Quote: Statistics Bureau of the Ministry of Internal Affairs and Communications2018 Housing and Land Survey"

As buildings get older, it becomes difficult to utilize them, and in many cases they end up vacant.

Renovation investments can bring old apartments and other residences back to life,

Renovation investments are also being used for purposes such as operation.

 

 

・About the advantages and disadvantages of renovation investment

Even if you think of it as a simple renovation investment, there are advantages and disadvantages, so you should make sure you fully understand both before making a decision.

You will need to decide whether or not to invest in renovations.

First, renovation investmentmeritWe will explain about:

 

The biggest benefits of investing in renovations are:You can buy an apartment in a good area at a low price.That's the point.

If you buy a used apartment, you can purchase real estate in the area for a lower price than if you were to purchase a new apartment.

 

In addition, the renovated propertyRental income higher than market rateIt is possible to obtain.

As mentioned above, the idea behind renovation is to increase the value of your property.

It may even be possible to make the rent for an older apartment building the same as for a new one.

 

In other words, buy a cheap apartment, renovate it, and turn it into an apartment that can command high rent.

The typical way to manage renovation investments is to operate them.

This is the investment method that will give you the most benefits.

 

nextDemeritWe will explain about:

Buy a cheap apartment, renovate it, and sell it for a higher price, or set a higher rent.

These are the benefits of investing in renovation.On the other hand, repair costs are highThere are risks.

Older apartments can be purchased at lower prices.

Repairs can be expensive, and the costs can be higher than expected.

 

If the repair costs are higher than expected, the cost will be miscalculated.

Even if you increase the rent through renovations, you may not be able to cover your investment.

 

Another drawback is that the renovation

Even if you set high rentI don't know if there will be any tenantsSome of the points include:

No matter how much renovation work you do to increase the value of your property,

If you set the rent higher than the market rate, you cannot be sure that you will find tenants.

If it is difficult to find a tenant, the cost of renovation will become a burden.

The major disadvantage is that if no decision is made, the burden will be large.

 

 

next timeThings you need to know about investing in renovationsWe will explain about:

 

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