A house-flipper company made tons of profit for renovating vacant houses. (Image via FT)

Getting Big Profits From Japan's Empty Homes

Toska Dhia Andana
Business & Industry
Real Estate
Jul 04, 2019
3685
Japan is currently facing a shrinking population due to shortage of birth rate. There are a lot of elderly people who do not have a child which makes their homes to be vacant once they pass away. Years ago, vacant homes are only available in the rural areas. However, vacant houses are now available in suburbs and larger towns as well. To solve this problem, local governments and communities lease the houses on websites for a cheap price or even for free. Nonetheless, the houses are still vacant due to their condition that makes people not wanting to buy it.

A Japanese house-flipper, Katitas Co., see this as an opportunity. They buy the vacant houses for cheap prices, renovate them (using inexpensive materials as well) and sell the houses to people in the rural areas. Technically, these people cannot afford to buy a high quality house, which is why they agreed to purchase the house from Katitas.

The business is successful because they have many potential homebuyers. Katitas announced that their operating profit is 9.1 billion yen for the fiscal year ended in March. This is a great deal for them, because the number is twice higher if compared to three years ago. Analysts predict the profit of Katitas will increase to 12.4 billion yen in March 2021.

A fund manager at stock picker Rheos Capital Work Inc. Shota Watanabe praised the business. Watanabe said the business is really good and it probably will have a stable and steady growth. Although earning a huge profit, Katitas revealed that they are doing the business not only for the money. In fact, they are doing it because they want to make people to have a better life.

Source: https://www.japantimes.co.jp/news/2019/06/24/business/corporate-business/house-flipper-takes-advantage-japans-8-million-plus-empty-homes/

Japan , VacantHome , Renovation , RealEstate , Profit