Owner’s Representation for Real Estate Projects in Japan
Bridging Cross-Cultural and Practical Gaps
A Framework for Maintaining and Utilizing Property in Rural Japan
What Overseas-Based Owners Should Consider Before Purchase
Many overseas buyers try to establish a management structure after purchasing a property. That may not cause problems in urban areas or newly developed resort areas, but in rural areas, sufficient research must be conducted before purchase and preparations must be made so that a workable management structure can be established.
According to data from the Ministry of Land, Infrastructure, Transport and Tourism, approximately 500,000 vacant homes nationwide were purchased for some form of utilization. As I travel through different regions, it is not uncommon for me to see vacant homes that were purchased but then left unattended because repair costs were higher than expected or because a realistic management and maintenance structure could not be established.
If preliminary research is neglected, the owner may be unable to deal with practical hurdles such as repair costs and the creation of a management structure, and the property may ultimately be left untouched and abandoned.
As a fundamental premise, properties in rural and heavy-snowfall areas of Japan cannot be maintained and utilized in the same way as properties in urban areas.
In addition to regular building inspections and cleaning, owners must deal with issues arising from the surrounding natural environment, including the maintenance of large grounds, overgrown vegetation, wildlife, heavy rain, typhoons, and snowfall. Infrastructure and public services such as communications, water and sewerage, roads, snow removal, and waste collection, as well as the private services available, also differ from those in urban areas.
Furthermore, the required measures vary depending on the region, season, weather, condition of the property, and method of use. Rather than applying a standardized management method used nationwide, an individual structure that actually works in that particular region must be created.
Even in vacation-home areas, unless they are newly developed areas or resorts designed particularly with overseas investors in mind, traditional management systems may still be in place, or there may be a shortage of on-site managers. It is safer to establish an individual management structure based on the management system of each vacation-home area and the limits of the services it provides.
To do so, before purchasing the property, it is necessary to gather information, including through on-site investigation, and to establish the foundations and relationships needed to create a management structure. Simulating the management structure that will be required during the utilization phase should also be highly useful in determining whether purchasing a property in that region is a realistic option for you.
For an owner who lives overseas and does not speak Japanese, conducting this kind of preliminary research and groundwork independently is not very realistic. In addition to the language barrier, culture and common assumptions differ from region to region, and even for Japanese people, this kind of preliminary research and understanding requires time and effort.
In urban areas or newly developed resort areas, bringing in an interpreter is often sufficient.
However, when regional culture and business culture are taken into account, a liaison-type role becomes increasingly important in rural areas.
In such cases, a practical approach is to create a two-layer structure for pre-purchase research and foundation-building, as well as post-purchase operations: a local structure capable of responding flexibly on the ground, and a liaison connecting that local structure with the owner in terms of language, culture, and practical operations.
The following sections explain the structure that should be understood when maintaining and utilizing property in rural areas.
Individualized Management Is Essential for Rural Properties
In urban areas, management tasks such as regular building inspections, cleaning, and payment services are relatively easy to standardize, and service providers are also easier to find.
In rural areas, however, it is necessary to address not only the building itself but also the maintenance of the grounds and problems arising from the surrounding natural environment. Examples include mowing, tree cutting, fallen trees, wildlife intrusion, cleaning after heavy rain or typhoons, freezing, snow removal, and snow disposal.
The necessary measures also vary according to the season and weather, not only the condition of the building and frequency of use. Responses must be adjusted to the circumstances, such as increasing inspection frequency during the rainy and typhoon seasons and changing management tasks and visit schedules for winter in snowy regions.
Infrastructure, Public Services, and Private Services Vary by Region
The scope of public services differs between urban and rural areas. In some rural areas, public services alone are not sufficient to maintain the living environment, and maintenance activities carried out by local residents are important. Private services available locally are also not as extensive as those in urban areas.
For example, in heavy-snowfall regions, snow removal is a major winter issue. However, public snow removal is limited to public roads, and snowplows may not enter even public road sections that are narrow or where no registered residents live. Owners therefore need to consider how snow will be removed not only from their own land, but also from private roads, narrow roads, and the areas surrounding the property.
These differences arise not only between municipalities, but also between settlements and locations within the same municipality.
A management structure therefore cannot be determined solely on the basis of a generalization such as “this is how rural Japan works.”
Local Realities Cannot Be Understood Through Online Information Alone
As a fundamental premise, there is a major gap in the quantity, quality, and knowledge available in information intended for overseas audiences and information available within Japan. However, simply researching information in Japanese is not sufficient either.
Information about how things actually operate in a specific rural area and about the people available there often cannot be found online in the first place.
A common misconception is that it is sufficient to identify and deal only with items that can easily be turned into tasks, such as greeting neighbors after moving in, joining the neighborhood association, and learning about the local garbage collection point, even though there are already many such items. In reality, however, that alone is not sufficient.
For example, information about who actually undertakes snow removal or mowing, whether anyone will inspect the property after a disaster, which service providers or craftspeople are trusted locally, and how non-resident owners participate in community activities is often shared orally within the community.
The systems explained by the local government do not necessarily match the way things are actually handled in the community. Local governments also do not necessarily understand the specific realities of every individual area.
For this reason, research must be conducted through analog, on-the-ground channels within the community, not only through online research and telephone inquiries to local government offices.
On-Site Investigation Must Include Information Needed for Post-Purchase Utilization
For rural properties, an on-site investigation that only examines the building and surrounding environment is insufficient.
A broad range of information must be gathered for post-purchase utilization. In addition to routine maintenance, this includes what responses will be necessary depending on the season or in the event of a disaster, as well as the actual availability of hospitals, pharmacies, and transportation in an emergency.
Unlike in urban areas, much of the information needed for actual utilization in rural areas is not available online. It is therefore important not only to view the property, but also to conduct this kind of investigation on site.
During an on-site investigation, direct discussions should be held with real estate brokers, property managers, contractors, and, where possible, local residents who know the area well, in order to confirm the services available in that region and their limitations. The extent to which community activities and relationships with residents affect management also cannot be assessed without gathering analog information on the ground.
Assessing How Relationships with the Community Affect Maintenance
Compared with urban areas, personal relationships and analog information networks within rural communities tend to have a stronger influence on property maintenance.
For example, when receiving introductions to locally trusted property managers or craftspeople, asking someone to check the property after a disaster, or being connected with people who can handle snow removal or repairs, the relationship with the community itself becomes a practical resource.
In some regions, residents also jointly maintain the local living environment. Even owners of vacation homes or second homes cannot consider themselves completely separate from these maintenance activities as long as their property exists within the community.
However, the extent to which relationships with the community affect maintenance is not uniform. Some areas can be handled mainly through private services, while others depend heavily on community cooperation and analog information networks.
This also does not mean that owners must become friends with every neighbor or maintain close personal relationships with them. Maintaining an appropriate degree of distance is important from a privacy perspective as well. Even so, insisting on a completely isolated style of utilization, as may be possible in an urban area, creates more disadvantages than benefits from the perspective of management and utilization.
Rather than uniformly assuming that “deep community involvement is always necessary in rural areas,” it is important to confirm before purchase how strongly trust relationships and community activities affect practical operations in that particular area, and then establish a realistic management structure accordingly.
Finding a Realistic Middle Ground Between the Community and the Overseas Owner
In many rural areas, there are too few residents to share the work of maintaining the community. The honest preference of such communities is therefore for property owners to relocate there, build closer relationships with local residents, and participate continuously in community maintenance activities.
However, it is not realistic to expect overseas-based vacation-home or second-home owners to do exactly that. At the same time, paying management fees, following garbage disposal rules, and maintaining only one’s own land may not always be sufficient. From the perspective of local residents, the living environment that they themselves maintain is being used by someone who contributes nothing to that work. Friction can therefore arise without the owner even realizing it. If that friction is left unresolved, it may develop into disadvantages or problems in the use of the property. Japanese owners face the same issue as well.
What is necessary is to identify what the community actually needs and what the owner can realistically undertake, and then find a middle ground that does not place an excessive burden on either side.
The owner may participate in community activities when visiting Japan, or may pay a local service provider to do so. Another option is to ask a local contact to handle limited tasks and dispatch outside workers for more burdensome work.
The appropriate arrangement varies depending on local practices, available personnel, how often the owner visits Japan, the budget, and how the property is used. It may also become necessary to review the arrangement during the utilization period.
Establishing a Role That Connects Overseas Owners with the Local Operating Structure
As a basic reality, in regional areas not only is Japanese generally the only language understood, but the relationship-oriented culture specific to rural communities must also be taken into account.
For overseas owners who do not speak Japanese, a two-layer structure is therefore effective: in addition to the people who actually operate on the ground, there should be a point of contact that connects the owner with the Japanese side. In many cases, a simple interpreter is not sufficient for this connecting role.
If the owner’s requests are translated exactly as stated, they may be perceived by the local side as excessively forceful demands. Conversely, if ambiguous responses or indirect refusals from the local side are conveyed only at face value, the owner may be unable to make an appropriate practical decision.
In practice, communication discrepancies often arise even when an interpreter is involved. It is not uncommon for both sides to proceed for a considerable time without realizing that a misunderstanding exists, and only discover it much later.
An accumulation of small discrepancies can also cause major problems or damage relationships.
Particularly in rural areas, practical work may not proceed smoothly unless appropriate relationships are built between the liaison and the relevant local parties or community.
Determining Before Purchase Whether a Sustainable Structure for Maintenance and Utilization Can Be Established
Being able to purchase a property and being able to maintain and utilize it continuously are two different things.
Even if the plan is to find a property management company after purchase, it is not uncommon to discover that there is no provider able to handle the property, no one available for snow removal, no contractor capable of working on a kominka, or no one who can inspect the property in an emergency.
Even when there is no problem with the property itself, the intended method of use may not be viable once communications, roads, public services, private services, and participation in community activities are taken into account.
It is common for assumptions that something “must be available” or “should be possible” to prove wrong—for example, discovering that there is no car rental company nearby when trying to rent a car, or that snow-removal and mowing services are already fully booked. In rural areas, it is also not uncommon for attempts to arrange these matters only when they become necessary to fail because no local foundation has been established.
As stated at the beginning, many vacant homes nationwide are left unattended after purchase. Although this does not appear in the data, there are also many cases in which owners are facing serious difficulties. Even if the property itself is inexpensive, if it cannot realistically be managed, maintained, or utilized, all the money and time spent up to the purchase may be wasted. This also happens to Japanese owners who speak Japanese and live in Japan. It is not a problem limited to overseas owners.
However, for overseas owners, the practical difficulty is even greater because, in addition to the language barrier and regional differences, they face hurdles in fundamental areas such as culture, common assumptions, and business practices.
That is precisely why, before purchasing, it is important to develop a comprehensive understanding and realistic plan covering not only the property and its surrounding environment, but also what kind of management structure can be created in that region, how strongly relationships with the community will affect operations, what the annual management and maintenance schedule should be, and who will connect the overseas owner with the local side.