Property in Atsugi City

Bidding Duration: October 29, 2009 to November 5, 2009

((Monthly rental fee = 70,000 JPY x 12) / 4,100,000 JPY ) x 100 = 20% estimated ROI
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Nearest station from the foreclosed property:
1) 小田急小田原線 本厚木駅 (South side) - 3.5 Kilometers
2) JR相模線 門沢橋駅 (East side) - 1.56 Kilometers
3) 小田急小田原線 愛甲石田駅 (East side) - 1.94 Kilometers
4) JR相模線 倉見駅 (North-East side) - 2.18 Kilometers.

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PROPERTY DETAILS:

Standard Clearance price: JPY 2,510,000

Bargain Selling price: JPY 2,008,000

Property No1: Parcel lot
Property Address: Atsugi City Sakai Jijou Aitsubo 1792-7
Land Category (As Registered): Residential lot
Land Category (At present): A portion had been categorized as part of the public road
Registered lot area: 114.28 square meters
Lot area (At present): Lot area is classified as semi-industrial zone
Building to land ratio: 60%
Floor space ratio: 200%

Property No.2: Building property
Property Address: Atsugi City Sakai Jijou Aitsubo 1792-7
Residential Building No: 1792-7
Land Category (As Registered): Residential building (At present)
Building Structure (As Registered): 2 Floor wooden roof structure (Up to present)
Lot area (As registered): 40.48 square meters; Second floor: 31.39 square meters
Lot area (At present): First floor= 52.38 square meters
Second floor= 31.39 square meters
Building to land ratio: 60%
Floor space ratio: 200%
Floor Layout: 5 rooms with separate dining room and kitchen (5DK)
The owner left the property with furnishings remained untouched.
Construction date: October 1979

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FACTS ABOUT THIS PROPERTY:

The owner expanded the first floor to about 10 square meters. The owner also used a portion of another private-owned property as a roadway access. This roadway access covers a wider area compared to the building floor area. The area covered by the first floor minus the total land area serves as the parking space area. Having a car would be an advantage as the property is located faraway from the train station. In the absence of private car, train can still be accessed through Aiko Ishida station of the Odakyu Odawara line located at a distance of about 1.94km.
Meanwhile, I could see that renovation is one of the drawbacks of this property. It is evident on the picture that the roof edges were damaged due to its prolonged exposure to rainwater, and thus it may need a repair.
Regarding the expanded portion implemented by the property owner, I assumed a major renovation of its foundation maybe necessary. The room which was built through expansion is somewhat tilted at an angle due to the damaged foundation. The foundation may have been damaged as the ground floor is evidently at tilted angle which I suppose would cause a ball to freely roll on its own when placed on it.
A repair would be necessary as floor spots and blemishes on the ceiling were evident on the second floor due to rainwater which leaked through the roof.
The Japanese law stipulates that a property lot subject to house construction should have more than 2 meter wide of space area where there is 4 meter wide of public road. However, this particular property does not meet such requirement. Thus, a permit from the City Ward Office would be needed in order to demolish the old house from this property and construct a new building. However, there’s no need to get a city government permit to renovate and use the old house.
Rough estimated registration tax will be JPY 160,000 Rough estimated porperty tax will be JPY 220,000. Extreme damage was evident on this foreclosed property. While this property was auctioned twice through a standard bidding and special bidding sale, still no one attempted to bid. Thus, they set the clearance standard price at a lower bidding price.

For the breakdown formula of estimated yield/ return-on-investment:

1) Monthly net rental fee: JPY 70,000 x 12 months

2) Possible winning bid amount: JPY 2,100,000

3) Renovation and maintenance: JPY 2,000,000

Expected yield/ ROI: 20 % ( No.1 / (No. 2 + No. 3)) x 100).

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PICTURE