Matt Ketchum is a long-term resident of Japan, musician, music promoter and a co-founder of real estate consultancy Akiya & Inaka. The topic of akiya has been a popular one on Tokyo Cheapo and on the web, so we sat down with Matt for a deep-dive interview about Japan’s vacant houses.
Tokyo Cheapo: Tell us a bit about yourself.
Matt Ketchum: I’ve lived in Japan for about 10 years over two stints. I’ve lived all over the place. I’ve lived in rural Iwate, rural Shiga, Chiba, and spent about 6 years in Tokyo. I live in Kanagawa now.
Mostly I was working in the IT space, NGOs, entertainment, some government affairs, and now in real estate. The reason I left Japan the first time in 2016 was to start a company in Olympia, Washington, that focuses on the independent Japanese music scene. Specifically heavy metal, death metal, black metal, grindcore, porno grind, gore grind, hardcore punk, noise, avant garde, and all that stuff! The Japanese underground extreme music scene is actually why I’m here in the first place.
I grew up in Pittsburgh, Pennsylvania and started going to punk and underground shows, and when I was 14 or so, a lot of Japanese hardcore punk and metal bands started coming through on tour. I saw a band called Quill from Tokyo, and they were absolutely phenomenal. I couldn’t talk to them and I had no idea what they were saying, so that’s what sparked my interest in learning Japanese and ultimately what led me to live in Japan. From go, it’s been all about the music for me. And now I’m working in abandoned houses!
TC: What is Akiya & Inaka?
MK: The answer is actually related to underground extreme metal! Much like the independent music scene in Japan, the akiya scene—if you want to call it that—totally exists. Everyone knows the 8 million and change figure (an estimate of the number of akiya, or “empty houses”) that constantly gets thrown around—which I can’t verify. Akiya & Inaka started when all the articles first started appearing online about free houses in Japan. Like everybody else, I clicked through and read them. The data methodology that I had developed for documenting the music scene ended up becoming a research methodology. Bad numbers, lack of citations, repetition—there were a lot of red flags in those articles that I had seen before in documenting underground music. I applied that same methodology to the akiya housing market. What it boils down to is that it’s an immensely fractured data ecosystem. It’s not that nothing exists or that all the houses are garbage, it’s that it is exceedingly difficult to tell what is going on. One of the reasons I initially clicked through is because akiya stood out to me as nascent infrastructure, and there are a lot of venues and artists that need production equipment, or no neighbours because it’s music, it’s loud! There’s a lot of opportunity to leverage the akiya market to support artists.
TC: What are some of the services that you offer?
MK: Our offerings are separated into three different phases. The first is portfolio curation. It’s definitely a sellers’ market in Japan. Property owners and managers work by forcing feed the public on what they should be buying, which I think is incredibly limiting, firstly in terms of what can get sold and then the types of opportunities that people can access. With property curation, we have to go outside of that and do it a little bit differently. What it boils down to is “Tell us what you want, and we’ll go find it”!
TC: So are you a consultancy?
MK: Yes, we are a consultancy; we’re not a licensed real estate agent. We’re partnered with STK Properties, a licensed real estate agent, so we can do the official legal side of things too through our partner. For portfolio creation, you tell us what you want (How many storeys?, How old?, What’s your budget?, etc.), and we develop a profile and go out and find it. At this point, the client gets started with about 5 properties.
Then on to phase 2. You look at the portfolio and think “Holy shit, this one looks absolutely perfect! Let’s pursue this one,” and that’s where we come in as the buyer’s representative. This involves viewing, going to municipal offices and tracking down missing documents, which is something that happens more often than not. Depending on the situation we might need to get property inspections, surveys, and the like.
Once you’ve decided that you do want to put an offer in, we go to phase three, which is taking you through the offer and acquisition process. All of these have fees associated with them so we front-end (charge up front). This is one of the real issues with the real estate market in Japan because everything is dependent on a sale. Real estate agent get 3%—not 2.9%, not 5.6% or anything else. The Japanese government says 3%, so that’s what you get on a sale, and you don’t get anything prior to that.
TC: Do you offer services or consulting after you find a house for someone? For example, advising on architects, contractors, vacation rentals, etc.
MK: Yes absolutely. We have a network of architects, contractors, and landscapers. We’re still developing it, so we don’t have everything. And sometimes depending on the area, access may be difficult. One of the goals that we are building toward is…we’re not just selling boxes. These are experiences, life experiences, lifestyles, and we’re not running after all these sales with yen signs in our eyes. It’s business and there’s money involved, but the point of this work is: “Wow, if you just get yourself out of the very prescribed Tokyo life, you can do all sorts of cool things.”
TC: Is that what the “Inaka” part of the name refers to?
MK: It doesn’t have to be inaka (“countryside” in Japanese), but we do tend to focus on that.
As I mentioned, I used to live in Iwate. I was there for the tsunami on the coast and I have very close ties to the area. I’ve also worked with a number of revitalization and reconstruction initiatives, and they haven’t succeeded as much as I’d like in terms of increasing quality of life and economic resilience. What we’ve seen with Akiya & Inaka is that the government is throwing the kitchen sink at problems related to the revitalization of rural communities, but not really modifying the approach from what it is in Tokyo. Revitalizing a metro area is different. That’s a specific ecosystem that has a specific way of functioning. If you know that system, you’ll probably be successful. When you take that revitalization model and throw it at a completely different ecosystem, it’s likely you’ll be met with some failure.
That’s the problem with real estate as well. A big issue with these revitalization efforts is that they haven’t defined the problem correctly. I’m not saying we have all the answers, but we are experimentative and we are trying different approaches and finding success.
TC: So would you call yourself a social business?
MK: There’s certainly an aspect of social business to it, but I would hesitate to officially use that title simply because I’ve seen a lot of social businesses, and guess what, most of those aren’t particularly successful either. I’m wary of labels, but I have that in mind.
TC: What are some of the biggest misunderstandings about akiya?
MK: Everything! A core one is that akiya is super interesting from a linguistic angle. The two kanji “aki” and “ya” mean “open” and “house”. There’s a number of reasons why this is interesting. Firstly, “open” what does that mean? Does it mean “vacant”? Does it mean “abandoned”? There are a number of words that you can throw at it which are technically correct, but they color perception. “Abandoned” sounds a lot worse than “vacant”! A lot of people latch on to the “abandoned” part, which immediately triggers thoughts of haunted houses, cobwebs, rotting stuff, and dead bodies! It’s not that those don’t exist—there are a lot of totally gross, garbage houses. It’s not all the time though.
The properties we work with tend to be perfectly inhabitable. In fact, some of them, you can move right in and start living there immediately, with all the fixtures—if you don’t mind using other people’s stuff. And of course there are shades in between. This is why we do à la carte services, because it depends on what you (the client) want. We do have clients who want fixer-uppers and to spend an additional 20 million yen on reclaiming a less-than-optimal building that they bought on the cheap for between 3 and 5 million yen. There are others who want their vacation home right now and want to move-in in two days. You can do that too, they’re all options. It’s a wide spectrum.
The other part of that is “house”—it’s not just houses! It’s buildings of all types. You want a bowling alley? There’s a really cool one up in Tochigi if you want it. There are restaurants, bars, office spaces, garages, mechanic shops. Literally any type of building that is abandoned or vacant. I would personally love to sell that bowling alley up in Tochigi! I would make a patch and put it on my arm or get a tattoo saying “I sold an abandoned bowling alley”! Most people don’t want a bowling alley, so they need to tell us what they’re after as there’s a very wide range of options out there.
TC: Can you tell us a little about akiya banks and how you deal with them?
MK: They’re oftentimes ineffective, but at various levels; it’s all very idiosyncratic. The entire akiya market is very idiosyncratic, nothing is standardized—and that’s the problem with akiya banks. The listings they have are all administered municipally, which means those are all public servants who likely don’t have backgrounds in real estate, or probably website design. I’m not throwing shade, but these people are not at all qualified to be doing anything that they’re doing. And yet, they’re being charged with selling these properties. So, the akiya banks have listings, they’re updated manually, sometimes they’re put on the national REINS database and sometimes they’re not.
Each of them has their own unique data structure. I’d say generally you’re looking at 20 to 25 data points that we’re working with. But firstly, what those data points are is up to the municipal government to decide. Secondly, whether or not those data points actually have an entry is also up to them or whoever is handling it, so it’s an extremely analog and siloed process. Because of this, it’s exceedingly difficult to dig through them and find what it is you’re looking for.
Also, it’s not at all uncommon to come across scanned PDFs and hand-drawn property lines. We generally don’t like working with akiya banks that have hand-drawn property lines because they’re that much more difficult. We can do it, but as far as ROI is concerned for the client, why bother trying to get that one when this one over here is easier.
TC: What’s the appeal of an akiya bank from the seller’s side? Why don’t they just go to a real estate agent?
MK: Nobody else wants to sell it. It goes back to the price thing. If you can’t sell it for 70 million yen, then any reasonable real estate agent doesn’t care—and that’s if you’re in Tokyo. But if you’re a few hours outside Tokyo, with that 3%, and you’re working with a substantial buyer for a month, you have to drive them out, have a viewing, give them documentation, then you get a 3% pull on 70 million yen—it doesn’t really make much sense, right?
Then there’s the unofficial but specific definition of what an acceptable property is. For example, Kujukuri in Chiba is a relatively popular area. It’s got super nice beaches and is relatively accessible. That spot is super hot and also relatively expensive. But right next door is Oami, an area that no one knows about but is on a train line—which Kujukuri is not. Right in that area, where we have two active clients right now that are looking for larger properties, we’ve got a 10SLDK (10 rooms, lounge, dining room/kitchen). So Kujukuri—awesome! Karuizawa—awesome! Niseko—awesome! Japan has a very specific list of where the cool places are, and the attitude is if you’re not there, then why bother?
And number two, clients don’t buy bigger than above about 180 square meters for a property in the Japanese market, generally speaking. That’s not what a house is. So there are all of these outliers that are still extremely acceptable if you just modify your definition of what it is you’re looking for. It’s basically a blind spot.
TC: What are the biggest pitfalls of buying an akiya?
MK: Let me modify that question. What you should be asking is “What are the biggest pitfalls of the akiya purchase process?” First and foremost, I’d say being overconfident! If you have dealt with Japanese real estate before, personally or professionally, you might want to take on the challenge on your own, but rural real estate is thorny and idiosyncratic depending on where you go. There’s all sorts of things you need to take into consideration, so it’s a risky process.
I know of people who have purchased akiya, and you hear these stories of how they turned it into the most beautiful thing and it’s great, but more often than not, it’s like “Oh wait, we tried to turn the water on, and it did turn on, and then we couldn’t turn it off for days”! It’s because they didn’t do due diligence. If you knew what you were buying, you wouldn’t have bought that! In order to determine that, it’s a relatively complex process, and we specialise in that. So dotting your “i”s and crossing our “t”s is of the utmost importance, unless you just like surprises and spending a lot of money on things that you’re uncertain of.
If you choose to go it alone, it’s going to take a long time, and there is going to be a palpable sense of uncertainty about what it is you’re purchasing and you’ll probably get into some misunderstandings. There are still a lot of issues you need to work through in the purchase process starting from the research and due diligence. So if you don’t conduct that process correctly, then you’re going to end up taking a big risk. You thought you were buying X and actually you were buying Y. It’s like baking. There’s a science to it, so if you got the amount of baking soda wrong, the whole cake ends up getting screwed up.
TC: Are there certain things to be aware of? Like structures that shouldn’t be there, or undefined property lines, or liens on the property?
MK: Liens don’t happen all that often. Be aware of it, but it’s not something we come across too much. As far as structures that we weren’t aware of, that happens surprisingly often. That’s just one more reason to get out there and do the viewing yourself. Land surveys are cheap, and we provide those at cost to clients. It’s about 50,000 yen to get our architects out there to take a look. This really highlights the process, you have to navigate it, it’s not just “give me house”! Again, it comes down to due diligence.
TC:Are akiya for everyone?
MK: Everyone meaning internationally?
MK: Yeah, it’s doable. You’re allowed to purchase and own property as a non-resident of Japan. But there are considerable fees that you should consider when doing that. We have international clients, and we assist them with that process. But for your average white collar worker in Ohio, if you want a $500 house in Japan, that’s not going to happen! We might be able to land you the $500 house, but you’ll also be paying up to US$30,000 in additional fees. But domestically speaking, it all depends on what your requirements and needs are. Again, there are millions of akiya out there—8.46 million in 2018 is what the Japanese government says there were nationwide. I don’t know if that number is accurate, but there’s probably at least that many out there. There’s probably something out there to match what you are looking for. I would be surprised if someone came to us and we couldn’t find what it is they’re interested in.
TC: If someone has an interest in going through the akiya process, where would be the best place to start?
MK: We have an arrangement with Kasamatsu Farms out in Fujino for experiencing countryside living. We have packages (transport, accommodation and experiences) with them. What they’re doing up there is an excellent example of what can be done with an akiya. What they are doing there is a relatively extreme version of what can be done and what is possible. The house (Yokomura Eco-lodge) is insane! But because it’s so extreme, they have a very good understanding of “Oh, you want to go down that path? Alright, we can tell you about it!”
TC: So do you recommend people try an akiya experience?
MK: Well, we have our “Inaka club”. Which is basically where you come with us and we hold your hand and we’ll go and have a kick-ass time in the inaka!