The budget for a vacant house renovation
The renovation of the main house and the tea house is going to start this spring. The house has been vacant for 20 years, and the estimated cost to revert to the situation 20 years ago is 6,600,000JPY (approx.60,000USD). It far exceeds the average annual income for 40s in Japan (about 46,500USD), but isn’t extraordinary for renovation of an old vacant house. I’m going to spell out the financial reality of vacant houses.
Vacant Houses Special Measures Act entered into force in 2015, and quite a lot of municipalities issued and have updated the list of abandoned houses for sale or rent called “Akiya bank” to find new owners/users. Akiya means abandoned houses. At first glance, they look like “distress goods” for a song, but the hidden costs for clean-up and renovation are often huge. Such a gap is detailed from a viewpoint of a foreigner: https://blog.gaijinpot.com/buy-abandoned-house-in-japan/
The staff visited us on October 30 and December 9, 2020, to estimate the costs. Then I got a preliminary estimate of 7,000,000JPY (approx. 63,600USD) on January 8, 2021 and had a meeting with them on March 1. The revised estimates was issued on March 23 and finalized at 6,600,000JPY (approx.60,000USD). It took about half a year, as I live very far from the house, and it was difficult to arrange time to travel.
ABANDONED HOUSES IN JAPAN
Increasing vacant houses are one of the most pressing social problems in Japan. According to the statistics by the Ministry of Internal Affairs, the ratio of vacant houses to the total no. of existing houses in 2018 is 13.6%, growing steadily for more than 50 years (for detailed figures, please see: https://www.stat.go.jp/data/jyutaku/2018/pdf/g_gaiyou.pdf ). The aging society and the excess concentration of population and industry in the Tokyo Metropolitan area are accelerating the trend particularly in rural areas.Vacant Houses Special Measures Act entered into force in 2015, and quite a lot of municipalities issued and have updated the list of abandoned houses for sale or rent called “Akiya bank” to find new owners/users. Akiya means abandoned houses. At first glance, they look like “distress goods” for a song, but the hidden costs for clean-up and renovation are often huge. Such a gap is detailed from a viewpoint of a foreigner: https://blog.gaijinpot.com/buy-abandoned-house-in-japan/
COST ESTIMATES
Back to our specific case, a quotation was issued by a construction company which serves as the Secretariat of the Nara Kominka Association (Kominka means old Japanese folk houses). As the renovation includes the tea house which was built on the slopes of a mountain more than 100 years ago and that needs particular expertise, I had limited options.The staff visited us on October 30 and December 9, 2020, to estimate the costs. Then I got a preliminary estimate of 7,000,000JPY (approx. 63,600USD) on January 8, 2021 and had a meeting with them on March 1. The revised estimates was issued on March 23 and finalized at 6,600,000JPY (approx.60,000USD). It took about half a year, as I live very far from the house, and it was difficult to arrange time to travel.
FOR MAIN HOUSE
The main elements of the cost estimate are:1) to replace the old rotten floor boards and sleepers etc. with anti-termite protection [18,202 USD] ;
2) to add partition walls to increase the number of rooms (it's good for earthquake protection as well) [630 USD];
3) to replace fabric outside wall with concrete one [2,709 USD];
4) to renew the plumbing facilities [2,986 USD];
- Other minor changes, preparation, backdown, and other common expenses [7,853 USD];
- Costs for operational management [5,828 USD]; and
- Tax [3,821 USD]
Total 42,030 USD
As you can see in 1, the biggest element is for the renovation of floors. Under floor boards, the foundation of buildings in a Japanese traditional way mainly consists of: 1) sleepers which extend horizontally at right angle to posts that are erected on a sill and floor struts, 2) beams which supports the sleepers a little above the sill, and 3) floor joists. They are basically wooden material except stone bases. If the damage remains superficial, things are much easier: just to change floor boards. Meanwhile, we have to replace half-rotten sleepers and some other fundamental materials, while keeping the upper structure.
1) to disconnect the tea room from the residence zone [2,638 USD];
2) to fix the tilt of tea house [2,727 USD];
3) to renovate and reinforce the building’s base [2,202 USD];
4) to repair a damaged part of the roof [2,891 USD];
- Other minor changes, preparation, backdown, and other common expenses [3,625 USD];
- Costs for operational management [2,535 USD]; and
- Tax [1,330 USD]
Total 17,949 USD
As for 1 and 2, the problem is the residence zone which was added about 70 years ago wasn’t quality work, and warped/inclined much faster than the tea house 120 years ago. The residence zone slanted the tea room zone by pulling it. The limited budget doesn’t allow us to renovate the residence zone, so we decide to just cut between the tea room and residence area, and let down the latter.
As it stands on the slope of a mountain, the scaffolding is necessary. It costs about 300,000JPY (approx. 2,730USD)
In this case, operational management costs was calculated as 18% of direct expenses. Such a ratio differs from a company to another. Some construction companies charge more affordable operational management cost, but instead top up the profit on the price of each material and goods
2) to add partition walls to increase the number of rooms (it's good for earthquake protection as well) [630 USD];
3) to replace fabric outside wall with concrete one [2,709 USD];
4) to renew the plumbing facilities [2,986 USD];
- Other minor changes, preparation, backdown, and other common expenses [7,853 USD];
- Costs for operational management [5,828 USD]; and
- Tax [3,821 USD]
Total 42,030 USD
As you can see in 1, the biggest element is for the renovation of floors. Under floor boards, the foundation of buildings in a Japanese traditional way mainly consists of: 1) sleepers which extend horizontally at right angle to posts that are erected on a sill and floor struts, 2) beams which supports the sleepers a little above the sill, and 3) floor joists. They are basically wooden material except stone bases. If the damage remains superficial, things are much easier: just to change floor boards. Meanwhile, we have to replace half-rotten sleepers and some other fundamental materials, while keeping the upper structure.
FOR TEA HOUSE
The main elements of the cost estimate are:1) to disconnect the tea room from the residence zone [2,638 USD];
2) to fix the tilt of tea house [2,727 USD];
3) to renovate and reinforce the building’s base [2,202 USD];
4) to repair a damaged part of the roof [2,891 USD];
- Other minor changes, preparation, backdown, and other common expenses [3,625 USD];
- Costs for operational management [2,535 USD]; and
- Tax [1,330 USD]
Total 17,949 USD
As for 1 and 2, the problem is the residence zone which was added about 70 years ago wasn’t quality work, and warped/inclined much faster than the tea house 120 years ago. The residence zone slanted the tea room zone by pulling it. The limited budget doesn’t allow us to renovate the residence zone, so we decide to just cut between the tea room and residence area, and let down the latter.
As it stands on the slope of a mountain, the scaffolding is necessary. It costs about 300,000JPY (approx. 2,730USD)
WHAT'RE COSTS FOR OPERATIONAL MANAGEMENT?
It should cover the earnings of operation managers, transportation and communications expenses for all staff, insurance fee and so on. Wages for carpenters are usually included in the different item.In this case, operational management costs was calculated as 18% of direct expenses. Such a ratio differs from a company to another. Some construction companies charge more affordable operational management cost, but instead top up the profit on the price of each material and goods
I avoided a tough bargaining with the company in view of the particularity of buildings and the location. Our house is located in the middle of the steeply sloped area with high concentration of old residential houses. That is, pathways are impassably narrow for heavy machinery. So, we have to haul waste stuff out toward the road at the foot of the mountain in a primitive way, such as pushing wheelbarrows for home use.
Another reason is the uncertainty which could produce additional expenses. I wanted to keep the amicable relationship with the company, as probable unexpected situation in which I have to ask for mercy of them.
I don’t pursue any comfort and stylishness, but minimum requisites for decent accommodation impose so much financial burden. It would be much cheaper to build a new house than to renovate by the costs for demolishing and disposing scrap lumber. It’s a very fair argument that owners should take care of their vacant houses before it is too late. But the reality is that once they abandon the wooden houses, they quickly become money-guzzling monsters. In most cases, a more likely option is to continue to keep away from a serious pain in the neck.
I don’t pursue any comfort and stylishness, but minimum requisites for decent accommodation impose so much financial burden. It would be much cheaper to build a new house than to renovate by the costs for demolishing and disposing scrap lumber. It’s a very fair argument that owners should take care of their vacant houses before it is too late. But the reality is that once they abandon the wooden houses, they quickly become money-guzzling monsters. In most cases, a more likely option is to continue to keep away from a serious pain in the neck.
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