Asset value of apartment renovation

Yuichiro Noguchi
Aug 31
7 min read

Apartment renovation does not necessarily increase the value of assets. Proper renovation may maintain and improve the asset value, but renovations that strongly reflect the hobbies and personality of the residents, or the renovation of cheap materials and equipment, on the contrary, may reduce the asset value.

The asset value of second-hand apartments will decrease as the number of years of construction passes. However, the asset value does not always fall at a certain rate, but after a certain period of time, it will hardly fall from there.

The actual decline rate for condominiums is as follows.

・New construction ~ 5 years: m2 unit price 743,700 yen

・6 to 10 years of construction: m2 unit price 611,700 yen (down 17.8% from the top)

・11 to 15 years of construction: m2 unit price 564,600 yen (down 7.3% from the top)

・16 to 20 years of construction: m2 unit price 467,300 yen (17.2% decrease from the top)

・21 to 25 years of construction: m2 unit price 315,500 yen (32.5% decrease from the upper stage)

・26-30 years of construction: m2 unit price 299,700 yen (down 5.1% from the top)

・Built for more than 31 years: m2 unit price 297,900 yen (down 0.6% from the top)

It will decline to a certain extent from the beginning of the construction to the 25th, but the decline rate after the 26th of construction is very small. Although the asset value of an apartment will not go down after 25 years of construction, there are differences depending on the property, and some of them maintain high prices even after more than decades have passed since the new construction, such as popular vintage apartments. I will do it.

The older the apartments are, the more they are built in convenient locations such as the city center. Newly built apartments may be built due to reconstruction, but there have been only a few cases that have actually been rebuilt so far in the country. Therefore, apartments near the station are rare, and demand is expected in the future, so it is easy to maintain asset value, and the surrounding environment, such as commercial facilities such as supermarkets, banks, hospitals, dry cleaners, restaurants, and parks, is also an important factor. It is.

Then, what about the asset value of the renovated apartment?

For apartment renovation, there may be a renovated resale property by a contractor and a personal purchase and renovation. A renovated resale property is a case where a real estate company, which is generally called a purchase and reseller, buys a property and sells it after renovation. There are many cases of renovations of affordable old apartments that have been built for more than 30 years, and the exterior is appropriate for the age, but the interior is new, so you can buy a second-hand apartment with a good location at a relatively reasonable price. I'm coming. In the case of old apartments that have been built for more than 40 years, there are many old floor plans such as 3DK and 2DK, but due to renovation, they have been changed to modern floor plans such as 2LDK and 1LDK, and the kitchen and unit bath It has also been replaced with a new one, so you can live comfortably. In addition, there is a sense of security because you can see and consider the property you are actually buying.

Even if the exterior is old, the floor plan is easy to use and the equipment is completely new, so it feels good at first glance, but it is difficult to differentiate unless it is an attractive property, and the selling price must be reasonably cheap to sell. In addition, in order to reduce the selling price, it is based on low-value properties that have been built for a long time, cheap building materials are used to reduce renovation costs, and only the visible part has been renovated, etc. It's just new, but the essential value may be out of the way. Renovated apartments require more detailed knowledge and connoisseurs than those of Chikuasa apartments.

On the other hand, if you buy it individually and renovate it, the biggest attraction is that you can remake it as you like. You can choose a unique floor plan and interior that reflects your hobbies and lifestyle, and you are particular about the interior and design, and everything from wallpaper and paint colors, floor flooring and tiles to faucet fittings, everything is made according to your taste. It is possible to do it. Therefore, the cost will be reasonable, so it can be said that it is basically for people who have a budget.

However, luxurious custom-made interiors and equipment do not simply increase the asset value. If the interests do not match, it is of no value to others, and interior decoration and equipment that do not match the exterior of the building, such as rough finishing and cheap construction, may reduce the asset value of the apartment. In particular, apartments with a high original asset value, such as vintage apartments, will also be reasonably high in the purchase price, so a renovation that is appropriate for its value is required.

Depending on your needs, unique properties may also be a point of differentiation from similar properties. Houses created by popular famous architects and interior designers are more valuable, the closer they are to the original, and such apartments are also valuable in a different sense than the above. Even if it was built at the time of unknown, it was worked on by designers who later became famous, or after their death, they were evaluated, and there are some that have the same value as art and antiques such as paintings.

However, in any case, there is no doubt that a simple and high-quality interior design with a basic sense of cleanliness tends to be preferred. Renovation using high-quality natural materials such as solid wood and veneers may create a deeper atmosphere due to aging that cannot be obtained with new building materials, and it may be a selling point. Vinyl cloth deteriorates over time, but if it is a painted wall, it can be maintained in good condition for a long time and repainted from above. One of the charms of old apartments is that you can feel the taste of aging that cannot be obtained in newly built properties.

One of the points is to incorporate highly practical equipment for renovations that take into account future resale value. Most of the housing equipment in general apartments are standard specifications from general manufacturers, but facilities with added value, such as high-grade kitchens, overhead showers, and baths with whirlpool baths It creates a sense of luxury and increases the asset value of the apartment.

The point to pay attention to when renovating an apartment is to make the price and grade (value) of the building and the grade of the interior as appropriate as possible. Apartments with high asset value were originally built as luxury apartments, so they are equipped with high-quality interiors and high-grade facilities from the beginning, and the maintenance and management of the building also costs a reasonable amount. However, as a result of these, high asset value is guaranteed.

Compared to second-hand apartments that have been built for more than 30 years, the purchase price of the property is quite affordable. By deplying the difference to the renovation, it is possible to get an apartment with a stylish interior than a normal apartment or an apartment with high-grade equipment at the same price. However, in the case of ordinary apartments, even if it is renovated, it does not sell very high at the time of sale. The general buyer group of apartments tends to value price rather than interior decoration and grade, so affordable second-hand apartments and renovated resale properties rather than renovated apartments that strongly reflect other people's hobbies May look attractive.

Basically, it is possible to increase the value of a high-quality apartment by proper renovation, but the renovation of an ordinary apartment will end with a personal hobby if there is no need. Spending from millions to 10 million yen will not be cheap. In addition, apartments with extremely low prices may lack repair reserves, and management may be self-managed, so you need to be careful when living for a long time or considering buying an apartment as an asset. In addition, if the condition of the building is bad and the building itself is demolished in the future, the renovation itself will be a wasteful investment.

In this way, from the point of view of renovation, apartment renovation is more affordable than new construction, and you can get a room you like, so it seems very attractive at first glance, but from the position of selling (buying a renovated property From the point of view of entering), if the construction age is already old and you can't find proper value in the renovation itself, it is quite difficult to add a value commensurate with the investment amount (apartment acquisition price + renovation cost) I think you can understand that.

In general, in the case of second-hand detached houses, it is said that the asset value of a building that has been built for more than 30 years will be zero. Only the land remains valuable, but due to the old building, its value is often assessed negatively, and the renovation of the apartment, the outdated interior and the interior that is too unique may be difficult to sell.

When choosing an apartment, it is important to be aware of how you can pass it on to the next generation rather than how cheap it is to buy it. Originally, proper renovation extends the service life of the building, and functional and beautiful designs that are not influenced by trends are attractive at any time. Wouldn't it be a true asset to live in such a valuable building?