Buying property in ski resorts is increasingly popular with international investors not only because of the booming inbound ski tourism market but because Japanese ski property has some fundamentals that make it a worthwhile investment. Japan is one of the few countries in Asia where foreigners are able to purchase freehold land without complex legal structures or local majority partners, that means ownership is clean, easy and secure.

The challenge in locating a property is deciding where to purchase among the 500 odd ski resorts still operating in Japan. Purchasing too early in a resort that is undiscovered could leave you literally out in the cold while you wait for your resort to be “discovered” and buying too late means you will pay a premium and suffer from low returns.

Hakken by Active Life Madarao

Hakken by Active Life Madarao

When I was looking for the first property, I didn’t really know what I was doing, I’d never owned a hotel and I hadn’t even renovated a bathroom so picking Madarao was really a stroke of luck. There was another property that I was keen on in another resort that I really loved, and I still really love the resort, the property was about the same size, and price as the first property I bought in Madarao, and literally could have tossed a coin as to which one I was going to buy. The property I passed on was eventually sold to another international investor, I guess with similar ideas as me. I’ve heard recently they are really struggling because the growth in international visitors to the resort has been slow.

It is important to remember two things when you are planning your purchase, firstly you cannot attract Japanese skiers, they will prefer to stay in a property owned by Japanese, so any business that the property has before you purchase it will be gone. You have to be able to build your business on 100% international skiers.

Active Life has been purchasing property in the Madarao ski resort and we believe there are some fundamentals to the resort that make it an attractive investment proposition for international investors.

Ski conditions

Madarao is not a large resort but it has incredible terrain, legal tree skiing and a very reliable snowfall; a bad season at Madarao is 9m of snow. To us that makes it more attractive than some of the other larger resorts like Hakuba and Shiga Kogen where the snow can be a little less reliable. Snow reliability is important for international skiers because visitors make a significant investment to come so the security of snow is very important. Every time Hakuba has a bad season Madarao numbers go up the following season.

Madarao Ski Resort powder skier

Madarao employs a fairly liberal attitude to off-piste skiing, atypical of many Japanese-style resorts

Visitation is increasing year on year

From 2016 when we started there has been a startling increase in the number of visitors to Madarao, the inbound room capacity (rooms that are targeted to foreigners) has been doubling each year and from our own numbers, we can confirm that occupancy is also rising year on year. If you look at the booking sites like you will see that most of the available rooms will be sold before the season starts. People start booking well before the seasons and I know of some properties that are already substantially booked out by May.

Madarao lift lineup

International visitors to Madarao have been rapidly increasing since 2016

Prices are already on the rise

Mardarao is already being discovered and on the rise, a significant proportion of the property has been purchased by international investors. While that means there are no real bargains left in Madarao, it also means there is a lot less risk because the market has already been established. For those of us that purchased early, we are buying our subsequent properties at significantly more than we paid for our original ones, but they still represent good value when you factor in yields and occupancy.

When we bought the first property in 2016, it really could have gone either way. Hardly anyone knew about Madarao – hell, I skied in Nozawa Onsen across the valley for 10 years and I didn’t even know it existed. Now, we have guests that have come back Madarao every year since we opened … over 50% of our guests for our established properties are returning guests.

There is no traditional village

Whilst you might think that owning a property in a traditional village would is a cool idea, local villages often have a very different view of development that foreigners and it can often cause friction or problems that will stop you from developing your property. I’ve heard of stories of people buying blocks of land and then being told by the village council that they cannot build on it. Madarao, having been originally built as a ski resort, has no traditional village rules, which means it is relatively easy to build and develop as you wish as long as you stay within Japanese building regulations (which means earthquake proof).

Madarao Mountain Resort

Image: Madarao Mountain Resort


Madarao is blessed when it comes to the location for two reasons. Firstly, because it is only 15 minutes from the Iiyama Shinkansen Station, compared to up to 2 hours for other resorts in the region like Hakuba or Myoko which require long bus rides or bus and train changes.

Iiyama to Madarao (bus)

A bus from Iiyama to Madarao will take approximately 15 minutes

Secondly, because it is geographically central between about seven resorts, including Nozawa Onsen, Myoko, Riyuu, XJam, Togari and others. This means that visitors can stay at Madarao and do day trips to other resorts. We call it 1 Bed, 7 resorts. Being centrally located means that guests will stay longer, our average stay has been steadily rising from 2.3 nights in our first year to around 5.5 for the coming 2019/20 season.

More Opportunity

Ironically, the extended downturn of the ski industry and Madarao means that a lot of the older buildings have already been knocked down, so there is vacant land in great locations. This land is now being purchased, with the new owners intending to build all manner of hotels and apartments. You don’t see a lot of new construction in Japanese ski resorts, but I believe over the next 2–3 years we could see substantial new development in Madarao which will take the resort to a whole new level.

Final words…

When buying ski property in Japan you need to exercise some caution, not everything that is cheap can be turned to gold…there is a dearth of abandoned, shut down, run down and falling down property. Renovation costs are not crazy high, but it’s not cheap either. You should be clear about what you want to achieve and how much you are willing to invest. Don’t invest money you can’t afford to live without because selling a property in a ski field is not like selling a property in Singapore or Sydney … it could take some time.

If you are up for it, it’s a great adventure and can be very profitable as well. If you want to find out more come to Madarao, I’m in the resort for all of January and most nights you’ll find me in the Bar at Active Life Madarao (we call it ALM) for a beer I’ll tell you everything I know.