A new wave of technology and real estate investment

Article published on Vacant House Lab | Roopt (Makigumi)

Makigumi, the company that operates Roopt, is constantly researching case studies and other information on revitalizing vacant houses and publishing them as columns.

Innovation in construction technology

Recent advancements in construction technology are changing the traditional concept of depreciation periods. Modern buildings now have a lifespan of hundreds of years. In particular, in rental properties, shared housing, and accommodation facilities, it has become clear that user satisfaction comes from different sources than before. As a result, investors are beginning to question the application of conventional depreciation periods, leading to differences of opinion with financial institutions. The idea is emerging that in the coming era, the usable life of a building should be considered semi-permanent.

The necessity of quality evaluation

A new approach is needed for evaluating the quality of buildings. While updates to individual components and inspections are becoming more widespread, further adoption is necessary. For detached houses, standardization of inspection reports is required. Due diligence (DD) for asset valuation has also been proposed. Inspections are particularly important for older properties, and it is possible to increase the value of a building through renovations of plumbing and other areas.

Investment securitization

The securitization of real estate investments contributes to maintaining high values. Unsecuritized real estate tends to be traded at prices below its intrinsic value. New investment schemes are attracting attention, such as the amendment of the Small-Scale Real Estate Specified Joint Stock Act, real estate crowdfunding, and the use of DAOs and tokens. For example, the Roopt Kagurazaka case demonstrates a concrete example of token use. In exit strategies, maximizing value through securitization is also a crucial point for investors.

Renovation and Use

There is a growing trend of land and building owners undertaking renovations and planning their future use. Easier access to funding for renovation companies will enable more projects to be realized. In particular, high returns on investment can be achieved through operations such as short-term rentals (Airbnb). The collateral value after renovation is also high, making it a safe investment even with a full loan.

As technology advances, the world of real estate investment is also changing. Improved construction techniques, evolving quality assessment, increased investment liquidity, and new approaches to renovation are all pointing to the future direction of real estate investment.

source: Vacant House Lab