On January 27th, Hajime Construction announced a partnership with Century 21 Japan to provide Hajime’s Leaseback Plus+ service throughout Century 21 Japan’s 900 plus branches nationwide.

The Leaseback Plus+ program allows owners to sell their property to Hajime Construction while at the same time signing a lease with the firm in order to continue living in the same property by paying rent that usually works out to be slightly less than what the monthly loan repayments were prior to the sale.  

The sale provides funds to clear the outstanding loan amount and depending on the property, usually the owner-turned-renter would receive a lump sum remainder of the sale price.

The partnership with Century 21 Japan expands Hajime Construction’s existing network of real estate brokerage firms already promoting the Leaseback Plus+ program, such as HouseCom, which means the Century 21 Japan partnership is not exclusive.

Additionally, Hajime Construction is not the only real estate company offering leaseback options on residential properties.  Daikyo Anabuki offers a similar service, as does HouseDo, Starmica and Haseko Leaseback to name a few.  

Leaseback schemes have long been a mainstay in Japanese commercial real estate sectors however they are relatively more recent in the residential property segment.

Residential leasebacks have proven appealing for property owned by elderly people without heirs willing to inherit the real estate, but also to middle age people looking to rebuild their current property but don’t have the cash needed for rebuild costs; cash a lump sum would provide after the property is sold to a leaseback company.    

The downside of leasebacks is that you most likely will be offered less than market rate for your property which means if you have a high outstanding loan balance, the leaseback purchase offer might not be enough to cover the loan, thus negating the appeal of a leaseback sale altogether.

But what leasebacks lack in price level offered, they make up for in speed of transaction since the buyer would be a large real estate company that has the capital ready to make the transaction happen quickly, usually within two to three weeks.

For those interested in learning more about the different leaseback options available, the Japanese language blog site Mochiya Leaseback no Madoguchi published a post on January 9th comparing the merits and demerits of different real estate companies offering residential leaseback programs.

It is important to note that all companies offering leaseback programs for residential property have evaluation procedures that could result in the company declining to make any offer at all.  The exact location of the property, the type and age of the structure and your remaining loan balance will all have an effect on whether a leaseback offer is made and if it is right for your situation.

Further Reading

Hajime Construction and Century 21 Japan Leaseback Partnership Announcement (Japanese only; January, 2022)