In recent years, with the revitalization of the used home market, we are hearing more and more about the term "renovation. But what exactly does renovation mean? And what is the difference from renovation, which is often confused with renovation?
In this article, INA&Associates, based on its extensive experience in the real estate industry, explains the basic concepts and actual procedures of renovation in a way that is easy for the average consumer to understand.
We hope that this article will help those who are considering purchasing or renovating a home or utilizing an existing property to make the right decision. We hope that this article will help you take the first step toward realizing your ideal home through a proper understanding of renovations.
Renovation is a large-scale renovation of an existing building to change its use or function, to improve its performance, or to add value to it. The Renovation Council of Japan defines renovation as "a comprehensive renovation for the regeneration of function and value, addressing the entire lifestyle in the house.
As this definition suggests, renovation is not mere repair or restoration to its original state. While utilizing the framework of an existing building, the floor plan can be changed to suit modern lifestyles and the latest equipment can be installed to increase the value of the building beyond that of when it was newly constructed.
The word "renovation" comes from the English word "renovation," meaning "restoration or renewal. In Japan, renovation has been attracting attention, especially in the housing sector, and is positioned as an important means of effectively utilizing used housing and improving the quality of housing stock.
Although many people tend to confuse renovation with remodeling, there are clear differences between the two. Let's take a closer look at the following comparison chart.
| Item | Remodeling | Renovation |
|---|---|---|
| Purpose | Restoration/Repair | Performance improvement and value creation |
| Scale of work | Partial / Small scale | Full-scale, large-scale |
| Performance | Equal to or less than new construction | More than new construction |
| Floor Plan Change | Basically none | Significant changes possible |
| Construction period | Several days to several weeks | Several months |
| Cost | Relatively inexpensive | Expensive |
| Construction while living in the house | Possible in many cases | Difficult |
The main purpose of remodeling is to restore aging facilities and interior to a near-new condition. Examples include replacing an outdated kitchen, changing wallpaper, or changing from tatami mats to wood flooring.
Renovation, on the other hand, aims to improve the functionality and comfort of a building beyond that of a new building by drastically changing the floor plan and installing the latest equipment while utilizing the existing building structure. For example, removing several small rooms to create a large living/dining room, or changing a Japanese-style room to a Western-style room fall under this category.
Renovations are classified into several types depending on the scope and content of construction.
Full renovation is the most large-scale renovation, in which the interior of the building is made into a skeleton (structural frame only) and everything from the floor plan to facilities are newly remodeled. While it offers a high degree of freedom and allows you to realize your ideal home, it is also the most expensive and time-consuming.
Partial renovation is a renovation targeting only specific rooms or facilities. For example, renovation of only the water supply area or the living/dining room. Compared to full renovation, the cost can be reduced, and it may be possible to do the work while living in the house.
Renovation for change of use is renovation that changes the use of the building itself. This is the case when a house is converted to an office or a store is converted to a house. Legal restrictions such as the Building Standard Law and the Urban Planning Law must be fully confirmed.
Understanding these types of renovations will help you choose the renovation method best suited to your objectives and budget.
Renovation has many advantages, but the following table summarizes some of the most important ones.
| Advantages | Detailed Description |
|---|---|
| Cost performance | Total cost can be controlled compared to purchasing new construction |
| Expansion of location options | Use of existing properties to create a home in a favorable location |
| Freedom of Design | Create your ideal space without being restricted by existing floor plans |
| Improvement of property value | Increase property value through appropriate renovations |
| Reduce environmental impact | Reduction of waste and effective use of resources by utilizing existing buildings |
| Occupancy in a short period of time | Completion in a shorter period of time compared to new construction |
Cost performance advantage is one of the greatest advantages of renovation. Compared to the purchase of a new home, the total cost can be reduced by 20% to 30% by combining the purchase of an existing property with renovation. This effect is more pronounced in good locations, especially in central Tokyo.
Expanded choice of location is another important advantage. Newly constructed properties are often built in the suburbs, which limits the options in good locations in the city center. However, by renovating an existing property, you can realize a home in a convenient location near a train station or close to commercial facilities.
Creating an ideal space through free design is the unique appeal of renovation. Without being restricted by the existing floor plan, you can design a space that fits your lifestyle. For example, walls can be removed to create an open living and dining room, or a hobby room can be created.
As for improving asset value, appropriate renovations can create asset value that exceeds the value of the property at the time of purchase. In particular, renovations that improve earthquake resistance and energy efficiency will contribute to maintaining long-term asset value.
On the other hand, the following disadvantages and points to note exist in renovations.
The need to secure temporary housing during the construction period is one of the major disadvantages. In the case of full renovation, the construction period usually takes about 3 to 4 months, during which time it is necessary to secure another residence. The cost of temporary housing and moving expenses must also be taken into account.
There is also the risk of unexpected additional construction costs. Especially for older properties, structural problems or deteriorated facilities may be discovered during the demolition process, necessitating work that exceeds the original budget.
In some cases, the structural constraints of the building may make it impossible to realize the ideal floor plan. In the case of condominiums, there are restrictions on floor plan changes due to the position of structural walls and beams. Also, the location of plumbing may make it difficult to move the water system.
Mortgage restrictions are also an important consideration. When purchasing an existing property and conducting renovation work at the same time, the timing of mortgage screening and loan execution can be complicated. It may be necessary to consider taking out a loan specifically for renovation or a bridge loan.
Consideration for neighboring residents is also essential. Especially when renovating condominiums, it is necessary to coordinate with the management association and neighboring residents regarding construction noise and work hours. Briefing sessions must be held prior to construction, and construction time limits must be observed.
In order to properly evaluate the cost-effectiveness of renovation, it is important to consider not only the initial investment amount but also the long-term perspective.
From the perspective of life cycle costs, it is necessary to make a comprehensive judgment, including post-renovation maintenance and management costs and future repair costs. Use of high-quality equipment and materials may result in higher initial costs, but may control long-term maintenance costs.
The maintenance and improvement of asset value is largely determined by the location conditions, building structure, and renovations. In particular, renovations that improve seismic performance and energy efficiency will contribute significantly to maintaining asset value in the future.
The qualitative effect of improving occupant satisfaction is also an important factor. The satisfaction gained by realizing an ideal home that matches one's lifestyle is an important effect that cannot be measured in monetary value.
For a successful renovation, it is important to follow the proper steps. The following table shows the basic flow and approximate duration of each stage.
| Phase | Work | Estimated time period | Main Points |
|---|---|---|---|
| Planning and consultation | Organize requirements, set budget, select vendors | 2 to 4 weeks | Obtain quotes from multiple vendors |
| Site survey and design | Detailed survey, basic design, implementation design | 6-8 weeks | Confirmation of structural constraints is important |
| 3. Contract and Permit Application | Conclusion of construction contract, application for necessary permits | 2 to 3 weeks | Confirmation of contract details |
| Preparation for construction | Arrange temporary housing, greet neighbors, order materials | 2 to 3 weeks | Explanation to neighbors in advance is important |
| Demolition | Removal of existing facilities and interior | 1-2 weeks | Appropriate waste disposal |
| 6. Building frame construction | Structural reinforcement, piping and wiring work | 3 to 4 weeks | Quality assurance of invisible parts |
| 7. Interior construction | Floor, wall, and ceiling finishing work | 4 to 6 weeks | Quality control of finishes |
| 8. Facility construction | Installation of kitchen, bathroom and other facilities | 2 to 3 weeks | Confirmation of functionality and safety |
| 9. Completion and handover | Final inspection, cleaning, and handover of keys | 1 week | Detailed confirmation of any defects |
Organizing and prioritizing requests is the key to a successful renovation. It is important to listen to the requests of all family members and clarify their priorities in consideration of the budget. If ambiguity is left at this stage, significant changes will be required later in the process, leading to increased costs and time.
Regarding budget setting, it is necessary to set a total budget that includes not only the cost of construction, but also the cost of temporary housing, moving expenses, and the purchase of furniture and appliances. Generally, it is recommended to set aside a reserve of 10% to 15% of the initial budget.
In selecting a contractor, it is important to obtain quotes from multiple contractors and comprehensively evaluate not only price, but also proposal content, track record, and after-sales service. In particular, checking past construction cases and customer satisfaction will help you select a reliable contractor.
The importance of the site survey will determine the success or failure of the renovation. It is necessary to conduct a detailed survey of structural constraints and equipment conditions that cannot be determined from drawings alone, in order to create a feasible design. In particular, older properties may reveal unexpected deterioration or structural problems.
Confirmation of legal constraints is also an important factor. Various legal restrictions, such as the Building Standard Law, Fire Defense Law, and condominium management regulations, must be checked to ensure a legal design. In particular, renovations involving a change of use may require an application for building confirmation.
Regarding consideration for the neighborhood, it is important to plan to minimize the impact of construction from the design stage. Consideration of parking areas for construction vehicles, delivery routes for materials, noise reduction measures, etc., and gaining the understanding of nearby residents in advance will lead to smooth construction progress.
During demolition work, care must be taken to ensure that only necessary parts are properly dismantled and that structural parts that should remain are not damaged. In addition, if hazardous materials such as asbestos or lead are discovered, they must be properly disposed of.
Structural work is an important process that determines the quality of the renovation. Structural reinforcement, seismic retrofitting, and insulation retrofitting are properly implemented to improve the building's performance. Cutting corners at this stage can lead to major problems later on.
In facility construction, it is important to ensure the quality of piping and wiring. In particular, water supply and drainage pipes and electrical wiring may require major repairs if defects occur after completion. The use of appropriate materials and careful construction are required.
Construction period can be shortened by enhancing advance preparation. By preparing detailed design drawings, ordering materials in advance, and arranging craftsmen before the start of construction, smooth construction progress can be achieved.
Optimization of process management can shorten the overall construction period by implementing each process in parallel and examining the efficient work sequence. However, unreasonable process shortening at the expense of quality should be avoided.
Facilitation of communication is another important factor. Close coordination between the client, designer, and contractor will enable early detection of problems and prompt response, resulting in a shorter construction period.
This article has provided a comprehensive explanation of renovation, from the basic concept to the actual process. We will reiterate the important points.
The essence of renovation is a comprehensive improvement that increases the value of an existing building beyond that of a new building, and is clearly different from renovation that merely aims to repair or restore the building to its original state. With proper renovation, it is possible to achieve the ideal home while simultaneously improving cost performance and asset value.
The key to success lies in adequate advance planning and preparation. Careful consideration at each stage is essential, including clarifying requirements, setting a budget, selecting reliable contractors, and confirming legal constraints. In particular, it is recommended to actively utilize the advice of experts regarding structural constraints and neighborhood considerations.
Regarding cost-effectiveness, it is important to comprehensively evaluate not only the initial investment but also long-term life cycle costs and occupant satisfaction. Appropriate renovations will not only improve the living environment, but also contribute to the maintenance and improvement of long-term asset value.
If you are considering renovation, we recommend that you proceed with specific studies in the following steps.
First, start by organizing your family's needs. Discuss with all family members about dissatisfaction with the current home and the ideal living environment, and clarify the order of priorities. Building consensus at this stage will provide the foundation for smooth progress in the subsequent phases.
Next, estimate the budget. Set a total budget that includes property purchase costs, renovation construction costs, and other expenses, and consider financing options. We recommend consulting with financial institutions regarding the use of mortgage loans and loans specifically for renovations.
Consulting with specialists is another important step. By utilizing the expertise of real estate companies, design firms, construction companies, and other professionals in their respective fields, you can create a better renovation plan.
Renovation is an attractive option to create new value in an existing building. With proper planning and execution, it is possible to realize an ideal home in a favorable location that would be difficult to achieve with new construction, and to do so cost-effectively.
However, professional knowledge and extensive experience are essential for a successful renovation. It is important to proceed with careful and proactive studies together with a reliable partner.
INA&Associates Inc. provides total support from property selection to renovation planning to help you realize your ideal home. With our extensive experience and expertise, we offer solutions that best suit the needs of each individual client. Please feel free to contact us if you have any questions or concerns about renovations. We will do our best to support you in realizing your ideal home.
A1. The cost difference between renovation and remodeling varies greatly depending on the scale and content of the work.
Partial renovation can be done for several hundred thousand yen to several million yen, while full renovation (for a property of around 70 square meters) is typically 8 to 14 million yen for a condominium and 8 to 20 million yen for a detached house. (It varies depending on the grade of equipment).
However, renovations are often cost-effective from a long-term perspective because they can improve building performance and asset value. It is important to make a comprehensive decision that includes not only the initial investment amount, but also future maintenance costs and asset value.
A2: It depends on the scale and content of the work, but in the case of full renovation, it is difficult to do the work while living in the house.
For partial renovations, it may be possible to proceed with the work step by step while living in the room that is not being renovated. However, since the water system will be temporarily unavailable during the construction period, it is necessary to secure an alternative means of access.
In the case of full renovation, it will be necessary to secure temporary housing during the construction period. We recommend that you set your total budget including the cost of temporary housing.
A3. Renovation of condominiums is subject to structural constraints and management regulations.
Structural constraints include restrictions on floor plan changes due to the location of bearing walls and beams. In addition, it may be difficult to move water circuits due to the location of plumbing. It is important to confirm the feasible scope through a detailed site survey in advance.
Restrictions by management rules include limitations on construction hours, restrictions on materials that can be used, and the obligation to provide prior explanations to the neighbors. In some cases, notification to or approval from the management association may be required prior to the start of construction, so prior confirmation is necessary.
A4. Warranty coverage for renovation work varies depending on the builder and construction details.
Generally, a warranty of 5 to 10 years is provided for the structural part, and 1 to 3 years for the equipment part. However, it is important to confirm the details of the warranty coverage and conditions before signing a contract.
It is also recommended to consider purchasing warranty insurance and having a third-party inspector conduct inspections to prepare for the risk of bankruptcy of the builder. The quality of after-sales service is also an important factor in selecting a builder.
A5. There are multiple options for financing renovation costs.
A mortgage loan is a method of financing the purchase of an existing property and renovation work as a single unit. Interest rates are low and long-term repayment is possible, but the screening process is rigorous and may take some time.
A renovation loan is a loan for renovation work only. Compared to housing loans, the screening process is quicker and easier, but interest rates are higher and loan terms are often shorter.
Self-financing is another option. There is no interest burden and no need to worry about repayment, but a large sum of funds is required.
Since the optimal financing method depends on individual circumstances, we recommend consulting with financial institutions and specialists.