A good property decision doesn't guarantee a good outcome

I bought a house in Yokohama that might turn out to be one of the worst investment decisions of my career

I also really like the house.

It's a relatively recent build, the layout works, there's a great view upstairs, and it's close to where I already live. But there's a substantial retaining wall right beside the property, and the house is in a designated landslide red zone.

That gave me a real reason to walk away. I didn't, and I think there's something worth talking about in how I made that decision.

What can you actually learn about a risk?

When I first saw the wall, I wanted to know more about it. So I spoke with the neighbor who has lived right beside it for about 50 years.

We talked about the wall's history, the drainage, and what he'd experienced over the years, including during heavy rain. He told me he hadn't experienced the kind of water or mud problems I was asking about.

That was useful information. I wanted to hear from someone who had actually lived there for decades, rather than make assumptions from looking at the wall myself.

But there's a limit to what that conversation can tell me.

The neighbor's experience doesn't establish that the site is safe, and it can't guarantee what might happen in the future. The official hazard designation is still there. I learned more about the situation, but I didn't get a guarantee.

Sometimes you can gather enough information to make a decision without getting enough information to know how it will turn out.

I think people can get caught up in looking for that last piece of information that will make a decision feel certain. With property, you may never get it.

Why I still wanted the house

The wall wasn't the only thing I was looking at.

The house was built in 2000, which makes it the newest akiya I've bought. It has 81 sqm of interior space, a 4LDK layout, and rooms I can work with. Some of the tatami rooms could be opened up as part of the renovation. Upstairs, there's a view over the neighborhood that I really like.

There's also a large park just a couple of minutes up the stairs from the house. I already live nearby and use that park myself.

Those things don't make the hazard designation disappear. They explain why I was interested in the property in the first place.

I paid ¥12 million / $75,000 for it. Whether that turns out to have been a good price for this particular house is a separate question, and I don't have an investment result to point to yet.

I'm planning to renovate it and put it to a specific use, but that comes later. For now, I've bought a house with features I genuinely want and a risk I can't completely resolve.

Both are true.

Would I recommend buying a house like this?

No. At least, not based on my decision alone.

I can explain why I bought this house, but that doesn't mean someone else should make the same choice. I live nearby, know the area, have a personal connection to the location, and have my own plans for the property. Another buyer could look at the same house and decide the uncertainty is more than they're willing to accept.

That's a perfectly reasonable conclusion.

When you're looking at properties in Japan, especially in an area you don't know well, it's easy to be influenced by somebody else's enthusiasm. You see a house someone loves, hear why they bought it, and start imagining yourself doing the same thing.

I'd be careful about that.

Try asking a different question: What do I know about this property, what remains uncertain, and am I genuinely comfortable with what's left unanswered?

Those are three different things. A property can be appealing, you can understand a concern better after doing your research, and you can still decide the remaining uncertainty is too much.

You don't have to reach the same conclusion I did.

So, was it a terrible investment?

I don't know yet.

This is property number nine for me in Japan, and it might turn out to be my riskiest akiya investment. It might also turn out to have been a smart decision. I haven't completed the renovation or seen the eventual outcome.

I'm comfortable explaining why I went ahead with the purchase. I'm not going to pretend that means I know how the story ends.

If you're curious about the house itself and want to see the wall, hear the conversation with the neighbor, and understand what made me go ahead, I've put the whole decision on video.

[WATCH Ep. 318: I Bought a House in a Red Zone in Japan]