When a new property is desirable but out of budget, "renovated properties" come into focus. Their popularity has grown as properties that offer the feel of new construction despite being pre-owned.
However, renovated properties do have drawbacks, and there are important points to consider before purchasing or moving in. This article covers everything from the characteristics of renovated properties to their pros and cons, real-life cautionary tales, and tips for choosing the right property.
What Makes a Renovated Property Different?
A renovated property is one that has undergone large-scale construction work on an existing building to improve its performance and value. At a lower cost than rebuilding from scratch, the floor plan and interior/exterior finishes can be changed to create new added value.
The Difference from Remodeling
Remodeling refers to work that restores a deteriorated building to its original condition, which differs from renovation, which adds new value. Remodeling tends to focus on partial repairs and involves relatively small-scale work, whereas renovation may include large-scale work such as floor plan changes.
What Types of Renovated Properties Are There?
Renovated properties can be divided into three types based on the scope of work: full renovation, surface renovation, and partial renovation.
Full Renovation
This type involves a comprehensive overhaul of a pre-owned property. All partition walls and fixtures are removed, and the space is rebuilt from the ground up based on a new design. The freedom it offers is comparable to new construction, but it comes with higher costs, longer construction periods, and the need for temporary housing.
Surface Renovation
This type addresses only the visible elements, such as wallpaper and flooring. While construction is straightforward and costs are easier to keep down, the plumbing and wiring inside walls and under floors remain untouched, meaning issues may arise later in older properties.
Partial Renovation
This type renovates only specific sections of a building. Costs are lower than a full renovation and temporary housing may not be required, but the drawback is that it can be difficult to achieve a cohesive look between renovated and non-renovated areas.
What Are the Differences Between Renovation Plan Types?
Renovations also differ by plan structure, falling into either "package" or "custom-order" types.
Package Type
This approach involves selecting from pre-set plans with predetermined work scope and fixtures. The advantages are that the finished result is easy to visualize, consultations require less time, and pricing is transparent. However, the degree of customization is limited.
Custom-Order Type
This approach allows the floor plan and fixtures to be designed freely. It is ideal for those with strong preferences, but costs tend to run higher and construction periods longer. It is important to build flexibility into your schedule.
What Are the Benefits of Renovated Properties?
Renovated properties offer several advantages, including cost savings and design appeal.
Stylish Interiors
Many renovated properties incorporate current design trends, making it easy to forget the building is 20 to 30 years old.
New Bathroom and Kitchen Fixtures
With a full renovation, all fixtures are replaced, providing a comfortable living environment.
Lower Cost Compared to New Properties
Both purchase prices and rental rates tend to be lower than new properties. Renovations are often carried out on well-located properties, meaning they are frequently found in convenient areas.
Move-In Ready Upon Purchase
New construction can take six months to a year before move-in, but a completed renovated property may be ready to occupy within days.
What Are the Drawbacks of Renovated Properties?
Alongside the benefits, there are also considerations unique to pre-owned properties.
Limited Availability
Stylishly renovated properties are still relatively scarce, and finding one in a desired area may prove difficult. Keep in mind that rental searches may take considerable time.
Not Necessarily Fully Renovated
Some properties have only been partially renovated, leaving older fixtures in place. If outdated equipment remains, maintenance may be needed soon after moving in.
Potentially Weaker Seismic Resistance
Since the structural framework remains unchanged, some properties may still conform to older seismic standards. Verifying seismic performance is essential for long-term safety.
Insufficient Insulation
When work has not extended to the structural framework, insulation may be poor, leading to condensation and mold. This also affects heating and cooling costs, so it should be confirmed in advance.
Possible Deterioration of Foundation, Plumbing, and Wiring
Surface-renovated properties in particular often have deterioration in areas that are not visible. Issues such as water leaks or electrical faults may only come to light after moving in. A well-maintained rental property with a solid management system can respond quickly to such problems.
May Not Be Eligible for the Full Mortgage Limit
Since renovated properties are classified as pre-owned, their assessed value may be lower, which can result in restrictions on borrowing limits and repayment periods.
Difficult to Resell
Properties with distinctive designs can be harder to find buyers for, which may be a disadvantage if you are considering future resale.
What Are Common Regrets from People Who Have Lived in Renovated Properties?
Here are some common failure patterns drawn from the experiences of people who have actually lived in renovated properties.
Frequent Circuit Breaker Trips
Even when interiors and fixtures are new, outdated wiring can result in insufficient electrical capacity, causing breakers to trip frequently. Always verify electrical capacity before purchasing.
Poor Sound Insulation
Some residents find outside noise intrusive, or worry about sounds from inside the home carrying out. It is recommended to visit the property multiple times at different times of day during viewings to assess the surrounding noise levels.
Higher Utility Bills
Insufficient insulation can lead to heavy reliance on heating and air conditioning, potentially driving up utility costs.
Odors Typical of Older Homes
Since the structure itself is unchanged, musty smells and other odors typical of older buildings may be noticeable. Mold can also lead to health issues and deterioration of building materials, so caution is warranted.
Water Heater Failure Shortly After Moving In
In some cases, certain fixtures remain from the previous installation and break down shortly after move-in, resulting in unexpected costs. Confirm in advance whether all fixtures have been replaced.
What Should You Look for When Choosing a Renovated Property?
To avoid regrets, it is important to keep the following points in mind when selecting a renovated property.
Properties Around 30 Years Old Are a Good Starting Point
Properties built on or after June 1, 1981, which meet the new seismic standards, offer greater peace of mind. For wooden structures, properties meeting the current seismic standards in effect from June 1, 2000 onward are even safer.
Confirm Which Areas Have Been Renovated
Bathroom and kitchen areas are used daily, so always verify whether they have been renovated. Older fixtures carry a higher risk of malfunction.
Commission a Home Inspection
A home inspection can uncover structural issues that are not visible to the naked eye. Costs range from tens of thousands to several hundred thousand yen, but identifying potential problems early is well worth the investment.
Verify the Presence of Housing Defect Insurance or Reform Defect Insurance
Properties covered by these insurance policies allow repair costs to be covered if defects emerge after purchase. Confirm this with the selling real estate company.
Frequently Asked Questions (FAQ)
Which is the better value — a renovated property or a new property?
In terms of purchase price alone, renovated properties tend to be less expensive, but it is important to compare total costs including post-purchase maintenance. Additional costs may arise depending on the age of the building and the scope of renovation, so evaluate each property individually.
Can I find renovated properties available for rent?
Yes, the number of renovated rental properties is growing. However, availability remains limited, so it is advisable to inquire with multiple real estate websites and property management companies.
I am concerned about the seismic resistance of renovated properties. How do I check?
Confirm the construction date and verify whether it falls on or after June 1, 1981, which marks the adoption of the new seismic standards. Commissioning a home inspection will provide a comprehensive assessment that includes seismic performance.
If a plumbing problem occurs in a renovated property, who is responsible for the costs?
For purchased properties, the cost is generally borne by the owner. However, housing defect insurance may apply in some cases. For rental properties, costs arising from age-related deterioration are typically the responsibility of the landlord.
