In Nagara-Machi, Chiba,  there is a property for sale that looks perfect for those looking to escape the churn of central Tokyo.  If you are looking for cottage-life in the western sense of the word, this is it.   

Located about a 70 minute drive on the highway from Tokyo station, this property boasts two well maintained structures built from imported Swedish wood that sit on 363 sqm meters of land.

Surrounding the structures are lush, manicured lawns and gardens where you can grow your own vegetables and let the pets run wild.  Lifeline utilities connect to the grounds with gas provided by regularly changed propane tanks.

Standing on the spacious front porch of the main house, overlooking the abundant green fields in front, it’s hard to believe this is an akiya.

“Actually, when I met the owner, he told me one of the things he and his wife loved to do was sit out here with a bottle of whiskey and watch the storms come through.” says Matthew Ketchum, Co-Founder of Akiya & Inaka.

Up until this point, my limited understanding of akiya was that they were run-down, dilapidated and unkempt, long abandoned by their owners.  According to media I’d read, including us at REthink in a 2018 article, I thought these properties were practically given away by the local municipality in a desperate effort to attract new, taxpaying families.

Yet here is a property the exact opposite; well kept, not needing any major repairs with clearly identifiable and engaged owners who are paid up on their taxes.

All that and a price tag of ¥18 million, which is far from free.

“The run down, abandoned and free properties are what gets the clicks which is why the media focuses on them.  In reality, that element of akiya is but a piece of a much more dynamic system.” Ketchum explains.

The literal translation of akiya means empty house however the nuance of the word is often portrayed as abandoned.  Empty and abandoned are two sides of the akiya story and the empty side is much more compelling than the abandoned fixer-upper says Ketchum.

“It isn’t uncommon to find properties that were built by retirees in the nineties and early aughts.  These properties were custom built to be dream homes in natural settings, to be enjoyed post retirement.  Fast forward to present day and the owners have moved to more convenient, urban settings due to their advanced age.”

While the owners have moved away, they usually don't let the property fall into disrepair.  Many akiya owners hire local handy folk to regularly inspect the property and often will hire cleaning people too.

So much for a fixer upper.  Why is this property listed as an akiya then?

“Fee structures at traditional real estate brokerages are incentivized to be disinterested in what akiya listings have to offer. ”  Ketchum explained.  “It isn’t like these sellers don’t want to hire a realtor to market their home, they would.  The problem is they can’t get a realtor to list the property at all.”

Upon further reflection, it made sense.  The 3 percent fee on an ¥18 million sale comes to roughly ¥540,000.  From the broker’s perspective, another way to earn the same revenue could come from multiple leasing deals which are significantly simpler and quicker to execute than a large property sale in the countryside.

Real estate agents in any market have a strong influence on what gets advertised to buyers and usually that influence comes from what can sell in a reasonable amount of time.  Agents are success-based earners and if a property seems more difficult to sell than others, the agents will focus on listings they see as simpler to trade.

This isn’t to say agents are lazy.  If a seller has too high a price expectation that is divorced from the actual market, the agent is right to not take the listing.  Likewise the same for buyers; if the buyer is expecting too much property for too little budget, then the agent must focus on other clients whose expectations are more aligned with the current market.    

On the other hand, the issue with this influence is when a property is trying to push a price barrier, offers a new type of service or if a property takes a lot of time to physically get to and show.  What agents think as reasonable can often be very subjective and tends to be a herd like-mentality; if other agents haven’t focused on this, then neither should I.

Whether this is right or wrong can be debated endlessly but the current end result is the same.  “When no one markets the property, how can it sell?” Ketchum says.

Another akiya element that further turns off traditional real estate is how fragmented the administration of these listings are.

“Sourcing takes ages as there isn’t a nationwide or even prefectural level databases of akiya listings.” explains Ketchum.  “Each city within each prefecture maintains and administers their own akiya bank.  Since each municipality manages their own inventory, it isn’t as simple as searching a property portal.  We have to go into each city’s akiya bank looking for the diamonds in the rough.  Then, when we get to visitations, we also visit the city office in person to source yet further documentation.”

In the Nagara-Machi case, Ketchum needed to first apply to the city office just to gain access to the property details.  Ketchum was motivated to look in Nagara-Machi, not well known, due to past difficult experiences with more well-known and neighboring Onjuku Cho.

“We tend to look for properties where we know the city office is easier to work with.  The Nagara-Machi city office is great to work with and the address offers a similar quality of life and decent car access to the beach as Onjuku; just without the headache of purchasing through the Onjuku city office.”

Ketchum also points out the people administering the akiya banks usually have no experience in real estate. They are civil servants doing their best but they often get rotated in and out of the akiya department, gaining enough experience to be aware of the process but never spending enough time there to master it.

Basic things like taking property photos aren’t generally executed well.  “With some listings, it would be better if they had no photos at all instead of the ones that get posted.” said Ketchum laughing.

This is another missed point in media coverage on the akiya topic; while the local governments have announced the promotion of their akiya bank, actually purchasing an akiya tends to be idiosyncratic, inefficient and very bureaucratic.

“I would love to see the akiya initiative up its game in terms of execution but so far, not one municipality is at that point, which is where we come in.”

Ketchum, together with business partner Parker J. Allen, started Akiya & Inaka to promote rural lifestyles in Japan.  “We don’t do this to make millions of dollars.  We make enough to warrant continuing the business, however the real motivation is because we like it.  We like sifting through thousands of listings across different akiya banks looking for the diamonds in the rough.  It’s a blast being able to go around the country learning about local lifestyles and meeting sellers with histories as varied as there are stars in the sky.”

That said, Akiya & Inaka doesn’t offer free property viewing services.  For those wishing to view properties, Ketchum charges a pro-rated, per day fee for viewings in addition to their core curriculum of services.  “We wouldn’t be able to operate very long if we only relied on a 3 percent brokerage fee for buyers who may or may not buy.”  explains Ketchum.  “We also cover a much larger area than a normal real estate firm.  This means your property tour could cross multiple prefectures.  Anything within a 90 minute drive from Tokyo can be almost anywhere in Kanto”

This is another problem Ketchum finds with mainstream media coverage of the akiya topic; buyers read these pieces and get the impression that they will be able to get a free property.  When they hear from Ketchum around $80 thousand for a decent property, clients are taken aback.

“The near free numbers that are portrayed in the media is accurate only if the buyer is comfortable purchasing the akiya with zero due diligence.”  Ketchum explains. “No soil tests, no structural integrity inspections, no property line checks, no tax arrear checks; nothing.  If a buyer is fine taking on that risk then getting an akiya for close to free can be done.  If buyers want proper due diligence, then they should be prepared to spend some money to make it happen.”

On the other akiya hand, turnkey properties like the Nagara-Machi listing that have proper documentation and responsible property owners who have listed with the local akiya bank are usually the best as the owners care deeply about the property.

Despite not being free with an asking price of ¥18 million, what buyers end up getting matches much more inline with their expectations than a dilapidated, truly abandoned akiya listing.

Ketchum elaborates “The owners of Nagara-Machi aren’t picky about who buys the property but they did take the time to mention if they could choose, they would wish to sell to a family that has the same desire they did 30 years ago when they built the property; to make memories they couldn’t when they were so busy working and raising a young family.  This is a sentiment shared with most turnkey akiya sellers.”

Ketchum sums up succinctly by saying “If you are looking for primarily finance-driven real estate investment opportunities, best to stick with the city centers.”

Further Reading:

Japan is trying to lure people into rural areas by selling $500 homes, but it's not enough to fix the country's 'ghost town' problem (Insider; June 26th, 2021)