Editorial
A room that smelled of mold the moment we entered, with no sunlight and damp air. We judged by whether a tenant would live there and whether we would ourselves, not by the low price, and passed.
The next unit was dirty from the moment I stepped inside. Properties listed cheaply are often cheap precisely because they need renovation.
If you are buying a home to live in, it can be fine to pay a high price when you love the place. When you look at real estate as an investment, though, what matters is how cheaply you can buy it. The purchase price is the heart of real estate investing, and paying too much makes losses more likely. Buying as cheaply as possible is ideal, but sellers know this too, so rapport with the seller and timing matter.
No sunlight, and damp
When I visited one unit, the room was dark. Sunlight did not reach it, and it was always dim and damp. The moment I walked in there was a moldy smell, and I thought, “no one will want to live here”. A condo like this is hard to rent even after you buy it.
Look through the tenant’s eyes
In that situation, it helps to picture the renovation and look at the unit as a tenant would, as someone coming to view it. No matter how low the price, it means nothing if no tenant moves in. What counts is whether you can renovate it so that a tenant would think “I could live here”.
The best test is whether you could live there yourself. Imagine you had lost everything and this was the only place left. You should buy a property you would still be willing to live in. Buying a good property means putting yourself in the tenant’s position.
Why we passed
This time the place was damp the moment I went in, and I thought “I would not want to live here myself”, so I decided against it.
What this case shows
- For investment property, the purchase price strongly affects the result. Find out why it is cheap (for example, because it needs renovation).
- On a viewing, check sunlight, humidity and smell, and your first impression on entering.
- View it as a tenant or visitor would, and use “could I live here myself?” as a test.
- Even a cheap purchase earns nothing if no tenant moves in. Consider whether renovation could make the unit somewhere a tenant would be willing to live.
This is a record of an individual’s own decision and is not a recommendation of any property or investment. Legal points are described in the context of Japan; please consult a lawyer or a licensed real estate professional before making an actual decision.