Sample Property Analysis

Financial Summary

Metric	Value
Asking Price	¥12,200,000 (approximately $76,884 USD)
Gross Yield	7.40%
Net Yield (est.)	5.60%
Building Age	45 years
Structure	RC (Reinforced Concrete)
Seismic Standard	Pre-1981 (旧耐震)
Cost-Approach Value (est.)	Data not provided
Price vs Cost-Approach Value	Data not provided
Assessment	Neutral

Property Scorecard

Factor	Rating	Key Observation
Location & Access	★★★★☆	9-minute walk to Nishi-Kasai Station on the Tokyo Metro Tozai Line with high daily ridership (96,546).
Building Condition	★★☆☆☆	Constructed in 1980 (45 years old), RC structure under old seismic code, lacking auto-lock entry.
Financial Returns	★★★☆☆	Gross yield of 7.40% and net yield of 5.60% provide stable single-digit returns.
Risk Profile	★★☆☆☆	Pre-1981 seismic code, 92.6% 30-year P(≥震度6弱) seismic probability, and storm surge hazard zone.
Rental Appeal	★★★☆☆	Tenanted 1K single-occupancy unit (23.80 m²) in a convenient residential hub with strong amenity coverage.

Rating guide: ★☆☆☆☆ = Poor, ★★☆☆☆ = Below Average, ★★★☆☆ = Average, ★★★★☆ = Good, ★★★★★ = Excellent

Comprehensive Investment Analysis

1. Rental Income Potential

• Current Contract Rent: The unit is currently tenanted at ¥75,000 per month (approximately $473 USD), producing an annual gross rental income of ¥900,000 (approximately $5,672 USD).
• Market Context: Single-unit 1K condominiums (20–25 m²) in the Nishi-Kasai and Kasai areas typically attract steady tenant demand from young professionals and commuting workers due to direct Tozai Line access into central Tokyo business districts (Otemachi, Nihombashi).
• Factors Affecting Rental Rates: The presence of an elevator supports tenant accessibility on the 3rd floor. However, the absence of a main entrance auto-lock system and the 1980 construction year constrain upside rental growth compared to modern, secure urban developments.

2. Investment ROI Analysis

Calculated Gross Yield: 7.40% Calculated Net Yield: 5.60%

• Operating Expense Breakdown:
  • Building Management Fee (管理費): ¥15,000/month (approximately $95 USD)
  • Repair Reserve Fund (修繕積立金): ¥3,000/month (approximately $19 USD)
  • Property Management Fee (管理手数料, 5.5%): ¥4,125/month (approximately $26 USD)
  • Vacancy Allowance (5%): ¥3,750/month (approximately $24 USD)
  • Property Tax (固定資産税): ¥10,167/month (¥122,000/year; approximately $769 USD/year)
  • Total Recurring Expenses: ¥36,042/month (approximately $227 USD/month; ¥432,500/year), representing a 48.1% operating expense ratio relative to gross rental income.
• Acquisition Transaction Costs (All-Cash): ¥1,075,600 (approximately $6,778 USD; 8.82% of asking price), comprising Agent Commission (¥468,600), Real Estate Acquisition Tax (¥256,200), Registration Tax (¥170,800), Stamp Duty (¥20,000), Judicial Scrivener Fee (¥80,000), and Initial Insurance (¥80,000). Total cash required for all-cash purchase is ¥13,275,600 (approximately $83,663 USD).
• Transaction Mode: Standard Brokerage (媒介). Standard statutory commission applies.
• Payback Period & Cash Flow: Net Operating Income (NOI) is ¥467,500/year (approximately $2,946 USD). On an all-cash basis, simple equity payback is approximately 28.4 years.

3. Property Desirability to Renters

• Target Demographic: Single young professionals, commuters, and university students seeking affordable housing within standard walking distance of Tozai Line transit links. Demographic projections for Tokyo indicate sustained growth in single-person households (+39.3% for single elderly by 2040 and stable single 25–39 cohorts).
• Location Advantages: Positioned 9 minutes (720m) on foot from Nishi-Kasai Station and 14 minutes from Kasai Station. Both stations sit on the Tokyo Metro Tozai Line, offering express commuting to major employment centers. Local living infrastructure is well-developed with retail, dining, and daily conveniences (e.g., Yukawa 商会 at 30m, Seven-Eleven at 138m) nearby.
• Demand-Driver Institutions:
  • Universities: 葛西南高校 (educational institution) is located 1,023m away. Note: No high-volume university with student enrollment figures is present in the immediate POI radius, making transit accessibility the primary driver of single-occupancy rental demand.
• Unit Features: 23.80 m² 1K layout with balcony (3.10 m²), city gas supply, municipal water/sewer, and elevator access on the 3rd floor of a 6-story RC structure.

4. Market Context

• Pricing Breakdown: The asking price of ¥12,200,000 translates to ¥512,605/m² (approximately $3,230 USD/m²).
• Municipality Comparative Positioning (Edogawa-Ku):
  • MLIT observed transaction prices for Edogawa-ku over the last 4 quarters indicate a median unit price of ¥707,692/m² (P25: ¥582,500/m²; P75: ¥875,481/m²).
  • The subject property's unit price of ¥512,605/m² sits below the P25 band for Edogawa-ku, reflecting a noticeable discount driven by building age (45 years) and pre-1981 seismic code construction.
  • Estimated based on general market knowledge: Unit prices for 40+ year-old 1K condos in Edogawa-ku typically trade in the ¥450,000–¥550,000/m² range.

5. Risk Assessment

• Seismic Classification & Pre-1981 Warning:

⚠️ OLD SEISMIC STANDARD (旧耐震基準) WARNING

• Built in October 1980 (building age: 45 years), this structure predates the June 1, 1981 seismic code revision.

• Financing Impact: Most standard commercial Japanese banks restrict or decline mortgage financing for pre-1981 buildings due to shortened statutory useful life.

• Insurance Impact: Ineligible for the 10% 建築年割引 (building year discount) under earthquake insurance (地震保険). Premium discounts require a 耐震基準適合証明書 (seismic compliance certificate) derived from a formal seismic evaluation.

• Resale Risk: The buyer pool upon exit is primarily restricted to cash investors or buyers utilizing specialized non-conforming lenders.

• Seismic Probability × Structure Pairing: J-SHIS mapping indicates a 30-year probability of 92.6% for ground shaking reaching JMA Intensity 6-Lower or higher (震度6弱以上) at this mesh location (High Tier, ≥ 26%). This high ground-motion hazard compounds with the pre-1981 structural code, reinforcing the need for adequate fire and earthquake insurance coverage.

• Multi-Dimensional Building Age Factors:

  • Major Repair Cycle (大規模修繕): At 45 years old, the building has passed multiple 12–15 year major repair cycles. With only 26 total units in the building, individual owners face concentrated exposure to potential reserve fund adjustments or special assessments if capital reserves are underfunded.
  • Equipment Lifecycle: System overhauls for common area plumbing, electrical distribution, and elevator infrastructure represent ongoing CapEx risks for older RC structures.
  • Tenant Appeal: Pre-1990 unit layouts lacking auto-lock entrances may experience higher tenant turnover compared to newer security-equipped properties.

• Demolition & Asbestos (ACM) Cost Guidance:

  • Demolition Cost Benchmark: Standard RC structure demolition in urban Tokyo ranges from ¥25,000 to ¥40,000 per m² of total floor area.
  • Asbestos Risk (Pre-1990 Build): Constructed in 1980, asbestos-containing materials (ACM) may be present in pipe insulation, fireproofing, or ceiling tiles.
  • ACM Removal Cost Estimate: Per MLIT guidelines for buildings ≤300m², asbestos removal costs range from ¥20,000–85,000/m² plus inspection fees of ¥100,000–500,000. Asbestos abatement cost: unquantified – survey required prior to major structural alterations or demolition.

• Natural Disaster Hazards:

  • Flood Risk (River Overflow): Medium risk; potential inundation depth of 0.5m–1.5m (GSI hazard map). The subject unit is located on the 3rd floor, significantly mitigating direct water damage risk to exclusive floor area.
  • Storm Surge (Typhoon): High risk zone with maximum potential inundation depth of 3.5m (range 3.0m–5.0m). Ground-floor and common-area infrastructure remain exposed during extreme surge events.
  • Tsunami / Landslide / Internal Flooding: None detected.
  • Disaster Framing & Insurance: BOJ research indicates flood zone discounts average approximately −1.1% per meter of depth. Fire insurance (火災保険) with flood/water damage coverage is essential for common area protection.

• Occupancy & Vacancy Risk: The unit is currently tenanted (賃貸中) at ¥75,000/month, providing immediate rental cash flow upon acquisition without initial leasing downtime.

6. Cost-Approach Valuation (積算価格)

• Status: Cost-approach valuation is currently unavailable for this listing due to unimported land share coefficient data.
• Land Value & Collateral Framing: Japanese institutional lenders evaluate pre-1981 RC buildings (47-year legal depreciation life) as having near-zero structural asset value for collateral purposes (45 years old = 2 years remaining statutory life). Consequently, bank collateral value relies almost entirely on land share value (路線価 basis).

7. Property Assessment

Property Assessment: Neutral

Primary Reason: The property offers immediate cash flow with a 7.40% gross yield (5.60% net) in an accessible Tokyo commuting hub, offset by structural risks associated with a 45-year-old pre-1981 building and elevated storm surge/seismic hazards.

Supporting Factors:

• Tenanted status at ¥75,000/month provides immediate income continuity with strong transit access to Nishi-Kasai Station (9-minute walk).
• High recurring operating expense ratio (48.1% of gross rent, including ¥15,000/month building management fee) compresses net returns.
• Pre-1981 RC construction and a 92.6% 30-year P(≥震度6弱) ground motion probability limit financing options and increase long-term CapEx exposure across a small 26-unit association.

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Hypothetical Financing Scenarios

The following scenarios illustrate how different investor financing profiles impact leverage and cash returns based on the asking price of ¥12,200,000 and total acquisition cash requirements of ¥13,275,600.

Scenario Comparison Summary

Note: Cash-on-Cash Return is calculated as Net Cash Flow divided by Total Cash Invested (Equity Down Payment + ¥1,075,600 Acquisition Costs).

Detailed Breakdown: User-Specified Financing Plan

• Buyer Tier Context: Tier A / Tier B investor with local financing access.
• Purchase Price: ¥12,200,000 (approximately $76,884 USD)
• Down Payment (40%): ¥4,880,000 (approximately $30,754 USD)
• Loan Amount (60% LTV): ¥7,320,000 (approximately $46,131 USD)
• Loan Terms: 2.15% annual interest rate, 30-year term, Equal Principal Repayment (元金均等返済).
• Repayment Schedule: Annual principal repayment of ¥244,000 plus declining annual interest (Year 1 interest: ¥154,829). Total Year 1 debt service is ¥398,829 (approximately $2,513 USD).
• Cash Flow: Annual NOI of ¥467,500 minus Year 1 debt service of ¥398,829 leaves an estimated Year 1 pre-tax net cash flow of ¥68,671 (approximately $433 USD).
• Total Initial Cash Required: ¥5,955,600 (Down Payment ¥4,880,000 + Acquisition Costs ¥1,075,600; approximately $37,532 USD).

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What This Analysis Could Not Determine

1. Data Not Available

• Land Area & Land Share (敷地権割合): Specific land area and unit ownership share ratio were not detailed in the listing record, preventing exact calculation of the cost-approach value (積算価格) and land collateral basis.
• Management Association Reserves (修繕積立金残高): Total accumulated repair reserve funds held by the 26-unit management association were absent.
• Building Permit Confirmation Date (建築確認日時): Only construction completion (October 1980) was available; exact permit confirmation date was not stated.
• Lease Duration & Tenant History: Lease contract start date, renewal history, and tenant profile details were absent from the listing summary.

2. Assumption-Dependent Figures

• Property Tax (固定資産税): Estimated at ¥122,000/year based on user-provided inputs; subject to municipal assessment notices (固定資産税課税明細書).
• Property Management Commission: Modeled at 5.5% of gross rent (¥4,125/month) per user assumptions.
• Vacancy Rate: Modeled at a baseline 5.0% allowance (¥3,750/month).
• Earthquake Insurance Premiums: Estimated at ¥0 in baseline opex; individual quotes depend on structure evaluation and coverage limits.

3. Questions for a Licensed Professional

• 宅地建物取引士 (Real Estate Transaction Specialist): Request formal confirmation of road access compliance (接道状況), non-rebuildable status (再建築不可 check), and common area usage rules outlined in the Important Points Explanation (重要事項説明書).
• 不動産鑑定士 (Real Estate Appraiser): Evaluate land share value relative to local 路線価 (rosenka) to determine collateral coverage for financing or future resale.
• 税理士 (Tax Accountant): Confirm qualifying depreciation schedules (47-year RC legal life; 2 remaining years under standard statutory rules) and non-resident withholding tax obligations on rental income and eventual capital gains.
• 司法書士 (Judicial Scrivener): Review title registration records (登記簿謄本) to verify clear ownership rights, absence of encumbrances, and precise acquisition tax assessments.

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Investor Follow-Up Actions

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1. Road Access and Rebuilding Eligibility

Trust Stage: early

Context: Road access details and frontage dimensions were not specified in the property listing.

Question/Request for Broker:

• English: "Could you confirm the road access status (接道状況) and whether the property is eligible for rebuilding (再建築可否)? (Note: Public registry information, standard for first contact.)"
• 日本語: 「お手数をおかけしますが、接道状況と再建築可否についてお教えいただけますでしょうか。」

Investment Relevance: Confirming road access and rebuilding compliance ensures there are no severe legal encumbrances restricting future reconstruction or lender collateral valuation.

2. Seismic Inspection Status

Trust Stage: mid

Context: The building was completed in October 1980, placing it under the pre-1981 seismic code (旧耐震基準).

Question/Request for Broker:

• English: "Could you tell us the status of any seismic resistance inspection (耐震診断), including its results if one has been conducted? (Note: Key risk factor for pre-1981 structures; appropriate after expressing interest.)"
• 日本語: 「恐れ入りますが、耐震診断の実施状況（実施済みの場合はその結果を含む）についてお教えいただけますでしょうか。」

Investment Relevance: Determining whether a seismic evaluation has been conducted identifies structural safety and eligibility for earthquake insurance discounts or tax certificates.

3. Seismic Retrofit Documentation

Trust Stage: mid

Context: Verification is needed to determine if retrofitting work was undertaken on this 1980 structure.

Question/Request for Broker:

• English: "If seismic retrofit work (耐震補強工事) has been completed, we would be grateful for the documentation of that work, including any certification obtained. (Note: Conditional inquiry; ask alongside inspection history.)"
• 日本語: 「耐震補強工事が実施済みでございましたら、差し支えなければ工事の記録書類（認定書類を含む）をご提供いただけますと幸いです。」

Investment Relevance: Documented seismic retrofits improve building safety, mitigate lender financing barriers, and enhance future resale liquidity.

4. Building Repair History

Trust Stage: mid

Context: The building is 45 years old, requiring evaluation of historical capital expenditures and major maintenance cycles.

Question/Request for Broker:

• English: "We would be grateful to learn about the building's repair history to date, including any major renovations (大規模修繕) already carried out. (Note: Standard request after initial interest.)"
• 日本語: 「差し支えなければ、これまでの修繕履歴（大規模修繕の実施状況を含む）についてお教えいただけますでしょうか。」

Investment Relevance: Understanding past maintenance helps anticipate upcoming capital improvement costs and assess physical building preservation.

5. Management Association Financial Status

Trust Stage: late

Context: The building comprises only 26 total units, increasing owner risk if repair reserves are underfunded.

Question/Request for Broker:

• English: "We would appreciate learning about the management association's general status, particularly regarding the repair reserve fund. (Note: Sensitive financial data; request after establishing purchase intent.)"
• 日本語: 「差し支えなければ、管理組合の運営状況について、特に修繕積立金の状況をお教えいただけますでしょうか。」

Investment Relevance: Small unit counts create concentrated financial liability; inadequate reserve balances can lead to sudden special fee assessments on unit owners.

6. Long-Term Repair Plan

Trust Stage: late

Context: A long-term repair plan dictates future increases in monthly repair reserve contributions.

Question/Request for Broker:

• English: "If a long-term repair plan (長期修繕計画書) has been prepared, we would be grateful for a copy. (Note: Held by management association; request upon serious consideration.)"
• 日本語: 「購入を前向きに検討しておりますが、長期修繕計画書がございましたら、差し支えなければご共有いただけますと幸いです。」

Investment Relevance: Reviewing planned repair schedules prevents unexpected cash flow Compression from scheduled increases in monthly repair reserve fees.

7. Rent Roll Request

Trust Stage: late

Context: The unit is currently tenanted at ¥75,000/month; verification of lease terms and tenant stability is required.

Question/Request for Broker:

• English: "We are seriously considering this property. As part of our evaluation, we would be grateful for any available information about the current rental situation. (Note: Express purchase intent prior to requesting lease agreement details.)"
• 日本語: 「前向きに購入を検討させていただいておりますので、ご検討の参考として、現在の賃貸状況について可能な範囲でお教えいただけますと幸いです。」

Investment Relevance: Confirming lease term duration, deposit terms, and tenant payment reliability validates actual income stability.