Podcast Summary: Real Estate Without Borders – Episode: FREE Houses in Japan?!

Release Date: May 29, 2025

Introduction

In this compelling episode of Real Estate Without Borders, host Daniel delves into the intriguing world of Japanese real estate with guest Anton, a seasoned investor renowned for his expertise in renovating and monetizing Japan's abundant vacant homes, known locally as "akiya." Titled "FREE Houses in Japan?!," the episode explores the unique opportunities and challenges within Japan's real estate market, offering valuable insights for both novice and experienced international investors.

1. Demographics and Real Estate in Japan

Anton begins by outlining the demographic challenges that have led to Japan having approximately 9 million vacant homes. He explains, "Japan doesn't really work the same way as North America or Europe does. Real estate doesn't generally appreciate in value and that together with the decline of the Japanese population just leaves a lot of older homes vacant and empty" (00:52).

Key Factors:

• Population Decline: Japan's population is below the replacement rate, leading to reduced demand for housing.
• Urbanization: A significant migration from suburban and rural areas to major cities like Tokyo exacerbates the vacancy issue in less populated regions.
• Aging Infrastructure: Many of the vacant houses are over 30 to 50 years old, requiring substantial renovation to be viable for modern use.

2. Anton's Business Model: Turning Akiya into Assets

Anton shares his innovative approach to tackling the akiya problem by purchasing, renovating, and renting out these properties. He states, "Renovating old abandoned Japanese homes with a Swedish touch and then rent them out as a more high-end kind of experience" (02:01).

Business Model Highlights:

• Acquisition: Anton buys akiya at significantly reduced prices, often paying only for the land value and demolition costs, which typically range between $20,000 to $30,000 (08:01).
• Renovation: Utilizing traditional Japanese craftsmanship combined with modern Swedish design elements to preserve the home's original charm while enhancing its market appeal.
• Monetization: Primarily through short-term rentals catering to international tourists, especially architects, design enthusiasts, and American families seeking a unique stay in Tokyo's outskirts.

3. The Purchasing Process: "Free Houses" Explained

The concept of "free houses" is more nuanced than it appears. Anton clarifies, "The houses are for free, but what you're paying for is the land value minus the demolition and the cost of demolishing a house" (08:01).

Cost Breakdown:

• Land Value: Investors purchase the land at a fraction of its potential value once the house is demolished.
• Demolition Costs: Approximately $20,000 to $30,000 needed to clear the old structure.
• Market Pricing: The land with the house can be purchased for $50,000 to $200,000, depending on location and condition.

Anton emphasizes the importance of understanding the local market dynamics to navigate these transactions successfully.

4. Renovation and Adding Value

Renovation is a critical component of Anton’s strategy. He explains, "We're trying to always preserve that and build with that in mind. My Japanese carpenters are really world-class" (12:28).

Renovation Strategies:

• Preservation: Maintaining traditional Japanese architectural features such as intricate joints and post-and-beam structures.
• Modern Enhancements: Introducing elements that appeal to international renters while respecting the house's historical integrity.
• Value Addition: Each renovation increases the property's attractiveness, enabling higher rental rates and potential resale value.

5. Monetizing Through Rentals: Short-term vs. Long-term

Anton primarily focuses on short-term rentals, which have proven to be a lucrative niche. He mentions, "Short term rentals is where I found my kind of niche market" (02:01).

Rental Insights:

• Target Audience: Architects, design professionals, and American families seeking a blend of traditional and modern Japanese living spaces.
• Occupancy Rates: High due to the unique offering and strategic locations near Tokyo and other popular regions.
• ROI Potential: Ranges from 30% to 100%, driven by the low acquisition costs and high rental demand.

Anton also maintains a few long-term rentals to diversify income streams, though short-term rentals remain his primary focus.

6. Selling Properties: A Viable Exit Strategy?

While Anton primarily treats these investments as cash-flowing assets, there is potential for eventual resale. He states, "if you add a lot of value...you can sell it as an asset at...10-15% ROI" (16:51).

Selling Considerations:

• Market Appreciation: Although Japanese real estate generally doesn't appreciate significantly, strategic renovations and locations can yield respectable returns.
• Buyer Base: International investors and Japanese real estate companies looking to flip renovated akiya.
• Timing: Given Japan's low appreciation rates, Anton focuses more on cash flow than capital gains but acknowledges the potential for profit through value addition.

7. Understanding the Japanese Rental Market

Anton provides a detailed comparison between the Japanese rental system and those of other countries. He highlights the complexity and high upfront costs associated with renting in Japan.

Japanese Rental Market Features:

• High Upfront Costs: Tenants often pay multiple months' rent as deposits, including "gift money" to landlords, which can total up to $10,000 for a $1,000/month rent (28:14).
• Limited Mobility: Due to high investment costs, renting is less attractive, encouraging ownership or long-term investments.
• Regulatory Environment: Strict rental rules make short-term rentals through platforms like Airbnb a more viable option for foreigners.

Anton contrasts this with the more flexible and tenant-friendly systems in countries like Canada, where upfront costs are significantly lower.

8. Target Audience and Market Demand

The primary buyers and renters in Japan's akiya market fall into distinct categories. Anton observes, "99% of people buying Akias are Japanese real estate, smaller Japanese real estate companies" (23:11).

Key Demographics:

• Japanese Investors: Small real estate firms and individual investors seeking affordable properties to renovate and flip or rent.
• International Investors: Primarily Americans and other foreigners interested in unique short-term rentals or personal use properties.
• Local Families: Some Japanese families are moving to the countryside for more affordable housing and better quality of life, especially post-COVID.

9. Anton's Resources: Book and Masterclass

To support aspiring investors, Anton offers comprehensive resources. His book, "Free Houses in Japan," details his journey and strategies, while his Akiya Masterclass provides in-depth training and community support.

Resources Offered:

• Book: Available on Amazon, it covers the true story of making money through DIY renovations of abandoned homes.
• Masterclass: Priced at $970, it includes access to a community of experts, Q&A sessions with architects, visa lawyers, and luxury real estate brokers. Anton shares, "we have people who put in an offer on a house within a few weeks" (32:28).

10. Future Outlook and Market Potential

Anton remains optimistic about the Japanese real estate market's future, despite current demographic challenges. He anticipates that sustained interest from foreign investors and strategic value addition will drive growth.

Market Predictions:

• Increased Interest: Foreign investment, especially from countries like China, Australia, and the US, is likely to continue boosting certain regions.
• Property Preservation: As more akiya become uninhabitable, timely renovations will be crucial for maintaining property values.
• Potential Policy Shifts: While Japan currently has low immigration rates contributing to the vacancy problem, any future changes in immigration policy could alter market dynamics.

Conclusion and Call to Action

The episode concludes with Daniel expressing interest in further exploring Japan's real estate landscape in future episodes and encouraging listeners to engage with Anton's resources for deeper insights. Anton reciprocates the enthusiasm, hinting at future collaborations and tours of renovated properties.

Closing Remarks:

• Connect with Anton: Listeners can find Anton's work through his book on Amazon, the Akiya Masterclass website, and his social media channels (YouTube, Instagram @AntonInJapan).
• Join the Community: Aspiring investors are encouraged to join the masterclass to gain hands-on knowledge and access to a supportive network of real estate professionals.

For those intrigued by the prospect of investing in Japan's unique real estate market, this episode offers a wealth of information and actionable strategies to get started.

Key Quotes

• "Japan doesn't really work the same way as North America or Europe does. Real estate doesn't generally appreciate in value and that together with the decline of the Japanese population just leaves a lot of older homes vacant and empty." – Anton [00:52]

• "Renovating old abandoned Japanese homes with a Swedish touch and then rent them out as a more high-end kind of experience." – Anton [02:01]

• "The houses are for free, but what you're paying for is the land value minus the demolition and the cost of demolishing a house." – Anton [08:01]

• "Short term rentals is where I found my kind of niche market." – Anton [02:01]

• "99% of people buying Akias are Japanese real estate, smaller Japanese real estate companies." – Anton [23:11]

Timestamp Reference

• 00:52 – Anton introduces himself and explains Japan’s unique real estate market.
• 02:01 – Discussion on Anton’s business model focusing on short-term rentals.
• 08:01 – Explanation of the "free houses" concept.
• 12:28 – Anton talks about preserving traditional architecture during renovations.
• 16:51 – Potential for selling renovated properties.
• 23:11 – Demographics of akiya buyers.
• 28:14 – Insights into Japan’s complex rental system.

(Note: Click on the timestamps to jump to the specific sections in the full podcast transcript.)

Stay Connected

For more insights into international real estate investing and to keep up with the latest trends, subscribe to Real Estate Without Borders and follow their episodes. Don’t forget to check out Anton’s resources to embark on your own journey into Japan’s promising real estate market.