Things get a bit complicated, but it’s often said that it would be advantageous in terms of rent after 30 years. This is one of the magic phrases used by real estate agents, right?
“It becomes your home for the rent you pay!”
In reality, if you buy a property for 30 million yen and it’s worth only 20 million yen when you try to sell it immediately, you end up with a liability.
Moreover, the value tends to decrease year by year, doesn’t it?
However, there is a tendency for prices to rise overseas.
In most cases, homes are worth less than their prices.
So, no matter how much it becomes yours, it’s meaningless if you’ve made an expensive purchase, right?
It’s like paying 100,000 yen to live in a house worth 70,000 yen in rent.
For example, let’s say you lived in a rental property and paid a total of 35 million yen in rent over 30 years.
In the case of owning a home, let’s say you bought it for 30 million yen and after 35 years, its resale value is 5 million yen.
So, it has depreciated by 25 million yen, meaning you lived in it for 25 million yen, right?
If you had been living in a rental property, it would have cost you 35 million yen in total rent.
In the case of owning a home, you could say you lived there for effectively 25 million yen.
“So, owning a home would be 10 million yen more beneficial!”
That’s what you might think, but there are many additional costs associated with owning a home.
As I mentioned earlier, in addition to the purchase price, there’s the interest on the loan, right?
For example, if you had a 1% interest rate on a 30 million yen home for 35 years, you’d end up paying around 6 million yen.
You might think this interest rate is low, but it’s actually quite burdensome.
If there were fluctuations in the interest rate, the burden would increase even more.
In addition to that,
Insurance
Property tax
Repair costs
are also included.
You have to repair major things like plumbing, exterior walls, and floors every few years.
You can’t go 35 years without fixing anything.
I heard that repair costs are roughly around 12 million yen, but even for a home bought for 30 million yen,
Interest
Repair costs
Property tax
are incurred.
Property tax alone costs about 50 million yen.
In the case of renting,
Fire insurance premiums
Renewal fees
are relatively low.
You’re essentially only paying rent.
There are countless assumptions, but in this example, over 35 years,
In the case of owning a home, you end up paying effectively 50 million yen, with a remaining house worth 5 million yen and 40 million yen in living expenses.
In the case of renting, you pay 35 million yen, but you don’t end up with a house, but your living expenses are cheaper.
Which one, 50 million yen or 35 million yen in living expenses, is more advantageous?
In addition, there are various risks associated with owning a home, right?
So, of course, there are many assumptions, so it’s not possible to compare them directly.
