In Osaka City, more than 20% of old private houses over 50 years old are destroyed every five years. Considering the historical and cultural value of old houses, they should ideally be maintained and inherited, however, it would not be sustainable if the owners or the governments are forced to pay the cost. Converting old houses into private home rentals may open new avenues for use of the unused buildings by discovering their potential values. The loss of old houses would be curbed if owners realized that converting old houses, which have low value as residence due to their age, inferior performance and location, to private home rentals would improve their marketability.
We derived the relationship between building attributes and room rates for detached old private home rentals with traditional appearance estimated to be over 50 years old (quaint old home rentals) and for detached private home rentals without traditional appearance (non-quaint old private home rentals), using a hedonic approach.
It is assumed that private home rental’s room rates consist of location, land value, size, distance to the nearest station, the level of concentration, and the level of presence of traditional designs. Two groups of hedonic price models are constructed, one for quaint old private home rentals and the other for non-quaint old private home rentals.
By comparing the obtained hedonic price models, we discuss the relationship between market value and building attributes of quaint old and non-quaint old private home rentals.
In the case of quaint old home rentals, the higher the level of existence of the traditional design, the higher the room rates, and in the case of non-quaint old home rentals, the closer the distance to the nearest station and the higher the roadside land price, the higher the room rates. In the real estate market, the older and the worse location a property is built, the lower the value is assessed. In the case of quaint old home rentals, even if the size and location of the houses are inferior, the higher the level of traditional design remains, the higher the room rates. A potential market value was found in the private home rentals converted from old houses that had lost those market value as residences. The significance of this paper is that it contributes to the free-will stock utilization toward the maintenance and succession of the existing old houses.
