Rural vs Urban: 5 Key Facts to Know Before Choosing to Buy a Home
January 27, 2025
Owning a home is one of the biggest decisions most people make in their lives. In rural areas, the mindset that "homeownership is the norm" remains deeply rooted. However, I currently choose to rent. This decision is largely influenced by the perspective I’ve gained through investing—viewing a home through the lens of asset value.
In this article, I will delve into why I lean toward renting, discussing the realities of rural real estate markets and incorporating an investment-oriented viewpoint. By sharing concrete data and insights, I hope to help readers make informed decisions about homeownership versus renting.
The Current State of Rural Homeownership
In rural areas, several factors underpin the strong preference for homeownership:
- Affordable Land and Housing Costs
- Compared to urban areas, land and housing prices in rural regions are significantly lower, making home purchases more accessible.
- Cultural and Psychological Comfort
- Owning a home is often seen as a symbol of stability, garnering family and community support.
- Inheritance Culture
- It’s common for people to inherit land or homes from their parents, and staying in these properties feels natural.
These factors perpetuate the belief that homeownership is "normal" in rural areas. However, this mindset carries risks that are often overlooked.
Urban vs. Rural: A Data-Driven Comparison
The table below highlights the differences in real estate markets and living environments between urban and rural areas, emphasizing the risks and challenges in rural homeownership.
| Category | Urban Areas | Rural Areas |
|---|---|---|
| Population Trends | +126,515 net migration gain (Tokyo region, 2023) | Declining (overall net migration loss in rural areas) |
| Vacancy Rates | Low (below 5%) | High (e.g., over 15%) |
| Property Prices | High (e.g., ¥3 million+ per tsubo in Minato Ward) | Low (e.g., under ¥100,000 per tsubo in some areas) |
| Redevelopment Projects | Numerous (20+ major projects underway) | Scarce (few or no projects) |
| Average Commute Time | ~60 minutes | ~30 minutes |
| Educational Facilities | Abundant (high competition by district) | Limited (few options) |
| Medical Facilities | Well-equipped (many general hospitals) | Limited (few specialized hospitals) |
This comparison reveals stark contrasts. In rural areas, high vacancy rates and a lack of redevelopment lower the overall value of the real estate market. On the other hand, urban areas enjoy continued population growth and redevelopment projects, which boost property values.
Risks of Rural Homeownership from an Investor’s Perspective
- Declining Asset Value
Rural homes often lack market liquidity, meaning their value is unlikely to appreciate and may even decline. For example:
- Urban Areas: Property values in places like Minato Ward (¥3 million+ per tsubo) are supported by redevelopment and population growth.
- Rural Areas: Properties can cost under ¥100,000 per tsubo, but the lack of demand creates a sense of immediate depreciation upon purchase.
- Maintenance and Upkeep Costs
Even after paying off a mortgage, rural homeowners face ongoing expenses like repairs and property taxes. Older homes, in particular, require frequent maintenance and renovations.
In contrast, renting allows tenants to avoid large unexpected expenses, as landlords are typically responsible for repairs.
The Case for Renting: Flexibility and Lifestyle
- Adaptability to Life Changes
Life circumstances often change—family growth, job relocations, or children’s schooling may require adjustments. Renting provides the flexibility to relocate easily when necessary.
For instance, if your child goes to a university in a major city, moving closer to their school is much easier when renting. - Greater Freedom of Choice
Rural areas often have limited housing options, making it harder to find properties in desirable locations. Urban areas, on the other hand, offer a variety of neighborhoods, each with unique characteristics, allowing you to choose a location that suits your lifestyle.
How Investing Has Shaped My Perspective
If I hadn’t started investing, I might have purchased a home impulsively when my family grew. Many people lower their psychological barriers to buying homes during major life events, such as having children, and make decisions without long-term planning.
However, my investment experience taught me to view a home as an asset, considering its value and associated risks. While I don’t consider myself a seasoned investor, this habit of weighing long-term outcomes played a significant role in my decision to rent. Without this perspective, I might have made a rushed and less calculated choice.
The Lack of Excitement in Rural Real Estate
Urban redevelopment projects constantly bring new commercial facilities and infrastructure improvements, enhancing the overall value of neighborhoods. Conversely, rural areas rarely see such growth, leaving little to look forward to. Not only do rural properties lack investment appeal, but they also lack the excitement that comes with urban living.
Conclusion: Renting for Rationality and Future Possibilities
Both homeownership and renting have their pros and cons. However, given the risks and limitations of rural homeownership, I currently choose to rent. This decision aligns with the investment-oriented mindset I’ve developed—prioritizing asset value and future potential.
Renting allows for greater flexibility in location and lifestyle while keeping future options open. As I continue making housing decisions, I aim to prioritize regions with growth potential and choose options that genuinely excite me.
I hope this article offers readers a fresh perspective and sparks thoughtful consideration about whether to buy or rent a home.