top of page

Guide to Short-Term Rentals: Investing in Airbnb Properties in Japan

Writer's picture: David LakeDavid Lake


Japan's rising tourism and unique cultural appeal make it an increasingly popular destination for short-term rental investments. With travelers seeking more local and authentic experiences, short-term rentals like Airbnb properties are growing in demand. However, investing in Airbnb properties in Japan comes with unique regulations and requirements. This guide covers what you need to know to make a successful Airbnb investment in Japan.


1. Understanding Japan’s Short-Term Rental Regulations


Japan has strict regulations on short-term rentals, so it’s essential to understand these rules before investing in an Airbnb property. The "Minpaku Law," implemented in 2018, regulates short-term rental activities across the country:


  • Annual Rental Limits: Under the Minpaku Law, short-term rentals can only be rented for a maximum of 180 days per year.

  • Licensing Requirements: To operate an Airbnb legally, you must register your property and receive a Minpaku license, which requires compliance with safety, hygiene, and fire regulations.

  • Local Restrictions: Many municipalities have additional rules, such as limiting rentals to weekends or specific times of the year. Research the specific regulations in the region you’re considering to ensure compliance.


Familiarizing yourself with the Minpaku Law is critical to avoiding fines or the risk of property closure.


2. Choosing the Right Location for Maximum Returns


Location is key to maximizing ROI on Airbnb properties. Japan offers a wide range of locations, each with unique appeal and advantages. Here are some top picks:


  • Tokyo: With high tourist demand and numerous business travelers, Tokyo is a prime location for Airbnb investments. However, Tokyo also has some of the strictest regulations, so be prepared for tighter restrictions.

  • Kyoto: Known for its historical charm, Kyoto is a favorite among tourists. Some areas restrict short-term rentals, so look for properties in districts that allow Airbnb or consider getting a special license.

  • Osaka: This bustling city offers a mix of business and leisure travelers. Osaka’s relaxed regulations and consistent demand make it a great location for Airbnb.

  • Okinawa: For those interested in beachfront properties, Okinawa offers high demand for vacation rentals. Seasonal demand is strong, especially during summer, making it ideal for short-term rentals.


Selecting a location with stable or growing tourism will help you maximize occupancy rates and rental income.





3. Calculating Your Investment Costs and Potential Revenue


Before diving into the Airbnb market in Japan, calculate your potential costs and revenue to ensure profitability. Consider the following costs:


  • Property Purchase: This is your largest upfront cost. Property prices vary greatly depending on location and property type.

  • Renovation and Furnishing: Many short-term rentals require quality furnishings and decor to attract guests. Budget for renovations if you’re purchasing an older property or akiya (vacant home).

  • Licensing Fees: Obtaining a Minpaku license involves application fees and may require additional expenses for fire safety equipment or inspections.

  • Management Fees: If you’re not living in Japan, hiring a property management service to handle bookings, cleaning, and maintenance is essential. Expect fees between 10-20% of your rental income.

  • Utilities and Maintenance: These ongoing costs will impact your revenue, so factor them into your budget carefully.


After understanding costs, estimate potential revenue by researching average nightly rates and occupancy rates for similar properties in your chosen location. This will give you a clear picture of expected returns.


4. Understanding the Impact of Seasonality on Occupancy


Seasonality plays a significant role in the Japanese short-term rental market, with tourism peaking during certain times of the year. Key seasons include:


  • Cherry Blossom Season (March-April): Tourists flock to Japan for sakura (cherry blossoms), creating high demand for accommodations.

  • Summer Festivals (July-August): Numerous festivals throughout Japan draw international and domestic visitors alike.

  • Winter (December-February): Regions like Hokkaido see a surge in winter sports tourism, making it a lucrative period for properties in those areas.


If your property is in a seasonal area, consider setting premium rates during peak seasons to maximize profits. Understanding local tourism trends will help you adjust pricing strategies and manage occupancy effectively.


5. Leveraging Unique Japanese Design and Hospitality


Foreign tourists visiting Japan are often drawn to traditional Japanese aesthetics and cultural experiences. Enhancing your Airbnb with these elements can make it more appealing to guests:


  • Interior Design: Use Japanese-inspired design, such as tatami mats, futon bedding, and sliding shoji doors, to create an authentic experience.

  • Amenities: Consider adding extras like a tea set, yukata robes, or Japanese bath amenities.

  • Local Experiences: Partner with local businesses or guides to offer unique experiences, like tea ceremonies, cooking classes, or tours of historical sites.


These touches can lead to positive reviews, higher occupancy, and even premium pricing.





6. Marketing Your Airbnb Property for Maximum Reach


Effective marketing will increase your visibility and bookings. Consider these strategies:


  • Professional Photography: High-quality images will help your listing stand out on Airbnb.

  • SEO Optimization: Optimize your listing title and description with popular keywords to help it appear in search results.

  • Local Partnerships: Collaborate with local tourism boards, businesses, or influencers to promote your property.

  • Social Media: Use Instagram and Facebook to showcase your property and highlight local attractions.


Presenting your property as a one-of-a-kind, authentic experience can set it apart from other listings.


7. Working with a Property Management Company


If you’re not based in Japan or prefer a hands-off approach, consider hiring a property management company. These companies can handle:


  • Guest Communication: They manage bookings, inquiries, and check-ins.

  • Cleaning and Maintenance: Ensuring the property is guest-ready at all times.

  • Marketing and Pricing: Experienced property managers can set competitive rates and handle listing optimization.


Partnering with a reliable property management company allows you to streamline operations and ensure smooth guest experiences, even from afar.


8. Navigating the Tax Implications of Short-Term Rentals


Short-term rental income in Japan is subject to tax, so it’s essential to understand your obligations as a foreign investor:


  • Income Tax: Foreigners must pay income tax on rental income from Japanese properties. Rates vary, so consult with a local tax advisor.

  • Consumption Tax: If you earn more than a certain threshold, you may be liable for consumption tax on rental income.

  • Property Tax: Annual property tax applies to all property owners in Japan, based on the value of the property.


Consulting with a tax professional ensures you remain compliant with Japanese tax laws and avoid potential penalties.


Final Thoughts


Investing in Airbnb properties in Japan is a rewarding venture, particularly with the high demand for unique, local accommodations. However, success requires understanding regulations, selecting the right location, and tailoring your property to the Japanese market. Whether you're drawn to bustling cities or serene countryside locations, Japan’s short-term rental market offers diverse opportunities for savvy investors. At Old Houses Japan, we specialize in connecting investors with unique properties and guiding you through the intricacies of Japan’s real estate market. Reach out today to learn more about how we can support your Airbnb investment journey in Japan.

ความคิดเห็น


FIND YOUR JAPANESE AKIYA 秋谷 DREAM HOME

Old Houses Japan strives to bring you the best up to date Akiya 秋谷 and cheap houses in Japan. Consider signing up to receive exclusive access to when new cheap houses hit the market before anyone else. 

Japan is a great place to start your real estate journey. The cost of entry can be extremely minimal and with a resurgence in countryside home purchases, there is no better time than NOW. 

SIGN UP FOR OUR NEWSLETTER

Thank you for subscribing!

Free Resources

Vacant House Banks

Buying a House in Japan​

Working with a Japanese Real Estate Agent

Purchasing an Akiya

Old hOuses Japan logo
© Old Houses Japan

Our Company

About Us

Contact

Careers

Blog Posts

* Please note, we are not licensed real estate agents in Japan and we cannot help you purchase an akiya 秋谷  property, however, we can make an introduction for you. Prices are subject to change as the YEN to USD conversation fluctuates. Homes status may also change before we get a chance to change its status on the website.*

  • Instagram
  • TikTok
  • Youtube
  • Threads
  • X

Legal

bottom of page