• Death houses in Japan have a stigma that makes it difficult to sell the house.
• But some agents are working to get these “forsaken” properties off the market.
• According to an expert, some of these houses can be reduced in value by 50%.

The first time Koji Hanahara entered one of Japan’s “secluded properties” was a lonely death. An old man died alone in his apartment, and his body was found only two months later.

It was confusing, but it reminded Hanahara why he chose to do what he did. As the CEO of Mark Co., a Japanese real estate company that specializes in cleaning up, renovating and selling foreclosed properties, it’s his job to get these homes back on the market.

“I thought it should be me. At that moment, I realized again that it is my mission to help as many people as possible,” Hanahara told Insider.

Building a business around ‘risky assets’ that are difficult to sell

The term “jiko bukken” – which translates to “discarded property” or “accident property” – is often used to refer to property that has suffered suicide, murder, or natural death.

“In Japan, it is estimated that there are about 30,000 lonely deaths at home, about 13,000 suicides a year, and about 2,000 murders and arson deaths a year, bringing the total to 45,000,” Hanahara said. Not all these properties are rented or sold but the current situation is that there are a large number of risk properties.

Not only are these houses difficult to clean, but the stigma makes them impossible to sell.

“Many people in Japan feel that risk assets are ‘scary’, ‘scary’ and ‘dirty,’ which makes them avoid risk assets when choosing real estate,” Hanahara said.

While most real estate agents prefer not to share sordid details, Hanahara is the opposite.

Hanahara started his own real estate agency, Mark Company, in 2016 after working for a construction company for residential properties.

Details on the company’s website include Jobutu Real Estate’s unit description and details of how and when the previous owner died. “Suicide in December 2018” reads one listing currently available for 26.8 million yen, or $194,857. “The previous owner died in the house in 2014,” reads another on the market for ¥21.8 million.

Cheap to rent or buy

Despite the stigma associated with these homes, there is a big plus point for buyers and renters: price.

Hanahara estimates that properties with suicides will depreciate by 5 to 10 percent, while homes that have lost their lives will depreciate by 20 to 30 percent. He added that the value of the houses where the murders took place could be reduced by up to 50%.

On the Jobutu site, a 29 square meter detached condominium in Shinagawa-ku, Tokyo costs ¥21.8 million. According to data from Japanese real estate platform Utinokati, an uninsulated condo of the same size in the same area would cost 27.6 million yen.

For some young families, cheap rent is attractive. Kasia Powles-Ono, who lives in Poland, moved from Australia to Japan in 2019 with her Japanese husband and their son.

From March 2019 to May 2021, they lived in an isolated estate in Hanamigawa, Chiba Prefecture. A previous tenant was a young mother who died in the house, Powles-Ono said.

“When it came out half price, it was around 25,000 yen,” Powles-Ono told Insider. “We paid a year’s worth of rent because of the property’s condition, which was half the original price.”

In contrast, the average monthly rent for an apartment in Hanamigawa is 56,084 yen, in Utinokati.

“I’d say it’s been a good experience because our neighbors have been nice. They also seem very excited to have someone move in because it was strange for them to be empty for so long,” Powles-Ono said. She added that the rent returned to its normal price – about 50,000 yen – after a year.

Rents may recover over time, but that doesn’t mean agents don’t need to notify prospective tenants of the incident. Japan’s commercial law on the sale of building lots and buildings prohibits realtors from deliberately withholding information about properties they are selling, Hanahara said. And in October, new guidelines from the Ministry of Lands, Infrastructure, Transport and Tourism stated that brokers must disclose deaths if there are known incidents, foul play or significant influence on decision-making. Realtors must also disclose all past deaths, regardless of their nature, to tenants if requested.

Scott Rothman, a technical director from the United States, moved into an isolated studio apartment in Shibuya, Tokyo in September 2017. He lived there for more than three years.

“I got two free months of rent and a great deal on the rent,” Rothman told Insider.

The former tenant was an elderly woman who died of natural causes in the house, Rothman said.

How to find foreclosed properties in Japan

People can find secluded properties in Japan on a website called Oshimaland.

The site organizes foreclosed properties and provides a list and date of the event that occurred there. However, it is not an official record; Anyone can submit entries to the site, website creator Teru Oshima told Insider.

“Landlords have an incentive to check the website because everything written on it has a negative impact on the value of their property,” says Oshima. “You can email me, post comments, direct messages on Twitter or Facebook or any other way to correct the information if it’s not true.”

Mark’s company receives two to three notifications of potential estate listings per day, most of which come directly from the deceased’s relatives. The company works with funeral homes and specialty cleaning companies to find additional properties, Hanahara said.

In terms of renters, he noticed a trend of people in their 20s and 30s, single mothers and single women living in detached houses. And while the price drop is one reason why these apartments can be attractive – Tokyo, for example, is the fourth most expensive city in the world to buy property – it’s not just about money.

“When you think about living in a risky property, you might have the idea that you’re choosing to live in a risky property because you don’t have the money,” Hanahara said. But the property may have other attractive benefits, such as being near public transport or in a new development, he said.

Some real estate agents have reservations about dealing with foreclosed properties.

Yuki Yanagita, a sales representative from real estate company J&F Plaza, told Insider, “I know there’s some interest, but it’s definitely risky.” J&F Plaza specializes in helping foreigners acquire property in Japan.

With a smaller pool of buyers, the cost of deep cleaning the house is covered by the agency — something every company is reluctant to take on, Yanagita said. People in Japan often associate haunted properties closely with the paranormal, he added.

But in the case of Hanahara, the goal is to get in and really handle the step of the process that others avoid.

“We help those who are willing to sell their disaster assets from the stage when the disaster occurs,” Hanahara said.