Authored by the expert who managed and guided the team behind the Japan Property Pack
Everything you need to know before buying real estate is included in our Japan Property Pack
Yes, foreigners can buy and rent out property in Japan without needing residency or a special visa, making it one of the most accessible real estate markets in Asia.
Japan's rental market combines low vacancy rates in major cities with strong tenant protections, which means stable income but less flexibility than in some other countries.
We constantly update this blog post to reflect the latest regulations, yields, and market conditions in Japan.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Japan.
Insights
- Japan's national 13.8% vacancy rate is misleading for investors because prime Tokyo neighborhoods have only 3% to 5% practical vacancy, with occupancy rates above 96%.
- The 180-day Minpaku cap means short-term rentals must earn roughly double the nightly rate of a long-term lease to match annual income, which only works in top tourist pockets.
- February through April is Japan's peak rental season because the fiscal year and school year both start in April, creating a concentrated wave of tenant moves.
- Walk-to-station time is the single biggest rent driver in Japan, with properties under 10 minutes from a train station commanding clear premiums over similar units further away.
- Gross rental yields average around 4.5% nationwide in Japan, but net yields after management, taxes, and building fees typically drop to 2.5% to 3.5%.
- Osaka's Special Zone Minpaku allowed year-round short-term rentals until late 2025, when the city suspended new applications due to noise and waste complaints.
- Foreign investment now makes up 27% of Japan real estate transactions, up from 21% five years ago, driven largely by the weak yen and straightforward ownership rules.
- Tokyo's central five wards (Minato, Shibuya, Shinjuku, Chiyoda, Chuo) command the highest rents but often deliver lower yields than outer wards or regional cities like Fukuoka.
- Japan's tenant protection laws under the Act on Land and Building Leases make evictions difficult, which adds stability but reduces landlord flexibility on rent increases.
Can I legally rent out a property in Japan as a foreigner right now?
Can a foreigner own-and-rent a residential property in Japan in 2026?
As of early 2026, foreigners can legally own and rent out residential property in Japan without any nationality-based restrictions, making Japan one of the most open real estate markets in Asia for international investors.
The most common ownership structure for foreign landlords in Japan is direct freehold ownership, where you hold the property in your own name, though some investors also use a Japanese corporation (godo kaisha or kabushiki kaisha) for tax planning or asset protection purposes.
The single most common limitation foreigners face is not a legal ban but a practical one: many condominium buildings (mansions) have management associations that restrict or prohibit short-term rentals under their internal rules, so you must check the building's bylaws before buying if you plan to do Minpaku.
If you're not a local, you might want to read our guide to foreign property ownership in Japan.
Do I need residency to rent out in Japan right now?
You do not need to be a resident of Japan to own property and collect rental income, though you will need to handle tax filings and may need a local representative to manage certain administrative tasks.
Japan does not require a local tax identification number to collect rent, but if you earn rental income from Japan-located property, you must file a Japanese tax return, and in many cases your tenant or property manager will withhold 20.42% of rent for non-residents.
A local Japanese bank account is helpful but not strictly required, as many non-resident landlords use a property management company that collects rent and remits funds internationally, though setting up direct local banking without residency is difficult.
Remote management of a Japan rental property is entirely feasible if you hire a reliable property manager to handle tenant sourcing, rent collection, maintenance calls, and compliance with Japanese lease law, which is the standard approach for overseas investors.
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What rental strategy makes the most money in Japan in 2026?
Is long-term renting more profitable than short-term in Japan in 2026?
As of early 2026, long-term renting is generally more profitable for most residential properties in Japan because the 180-day Minpaku cap makes it mathematically difficult for short-term rentals to outperform a full-year lease unless nightly rates are exceptionally high.
A typical 1-bedroom apartment in central Tokyo earning around ¥195,000 per month (about $1,300 or €1,200) in long-term rent would generate roughly ¥2,340,000 annually, while a Minpaku capped at 180 nights would need to average over ¥13,000 per night ($87 or €80) just to match, before accounting for higher cleaning, turnover, and management costs.
Short-term renting tends to outperform long-term only in high-tourism locations like Shibuya, Shinjuku, Asakusa, or Kyoto's historic areas, where nightly rates can exceed ¥20,000 ($135 or €125) and occupancy during the allowed 180 days stays above 70%.
What's the average gross rental yield in Japan in 2026?
As of early 2026, the average gross rental yield for residential properties in Japan is approximately 4.5%, though this varies significantly by city and neighborhood.
The realistic gross rental yield range across Japan's major markets runs from about 3% in premium central Tokyo locations to 6% or higher in regional cities like Fukuoka or outer Tokyo wards with lower property prices.
Compact apartments (studios and 1-bedrooms under 40 square meters) typically achieve the highest gross rental yields in Japan because purchase prices scale more favorably against rents for smaller units, especially near major train stations.
By the way, we have much more granular data about rental yields in our property pack about Japan.
What's the realistic net rental yield after costs in Japan in 2026?
As of early 2026, the realistic net rental yield after all recurring costs for residential properties in Japan is approximately 2.5% to 3%, which is typically 30% to 40% below gross yields.
Most landlords in Japan experience net yields in the range of 2% to 3.5%, with the higher end achievable in regional cities or outer Tokyo wards where purchase prices are lower relative to rents.
The three main cost categories that compress gross yields in Japan are: (1) fixed asset tax plus city planning tax, which together run about 1.4% to 1.7% of the government-assessed value annually, (2) property management fees of 3% to 6% of rent, and (3) condominium building management and repair reserve fees, which in Japan can reach ¥15,000 to ¥40,000 per month depending on the building's age and amenities.
You might want to check our latest analysis about gross and net rental yields in Japan.
What monthly rent can I get in Japan in 2026?
As of early 2026, the typical monthly rent in Tokyo's 23 wards is approximately ¥120,000 ($800 or €750) for a studio, ¥195,000 ($1,300 or €1,200) for a 1-bedroom, and ¥270,000 ($1,800 or €1,690) for a 2-bedroom, with other major cities like Osaka and Fukuoka running 20% to 40% lower.
A realistic entry-level monthly rent for a decent studio in Tokyo starts around ¥80,000 to ¥100,000 ($535 to $670 or €500 to €625) in outer wards like Adachi, Nerima, or Itabashi, while central locations can push above ¥150,000.
A typical 1-bedroom apartment (called a 1LDK in Japan, around 35 to 45 square meters) in mid-range Tokyo neighborhoods rents for ¥165,000 to ¥230,000 per month ($1,100 to $1,530 or €1,030 to €1,440), with the spread depending heavily on station proximity and building age.
A typical 2-bedroom apartment (2LDK, around 50 to 65 square meters) in Tokyo's 23 wards rents for ¥230,000 to ¥350,000 per month ($1,530 to $2,340 or €1,440 to €2,190), with premium central wards like Minato and Shibuya commanding the top end.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Japan.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Japan versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What are the real numbers I should budget for renting out in Japan in 2026?
What's the total "all-in" monthly cost to hold a rental in Japan in 2026?
As of early 2026, the total all-in monthly cost to hold a typical rental property in Japan (excluding mortgage) runs approximately ¥35,000 to ¥70,000 ($235 to $470 or €220 to €440) for a condominium, or ¥15,000 to ¥35,000 ($100 to $235 or €95 to €220) for a standalone house.
The realistic low-to-high monthly holding cost range for most standard rental properties in Japan spans from ¥20,000 ($135 or €125) for a low-maintenance older house to ¥100,000 ($670 or €625) for a newer condominium with high building fees and comprehensive insurance.
For condominiums in Japan, the single largest contributor to monthly holding costs is typically the building management fee (kanrihi) plus repair reserve fund (shuzenhi), which together can range from ¥15,000 to ¥50,000 depending on the building's age, size, and amenities.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Japan.
What's the typical vacancy rate in Japan in 2026?
As of early 2026, the practical vacancy rate for well-located rental properties in Japan's major cities is around 3% to 5%, even though the headline national vacancy rate sits at nearly 14%.
A landlord in Tokyo, Osaka, or Fukuoka should realistically budget for about 0.5 to 1 month of vacancy per year (roughly 4% to 8%), with well-priced apartments near train stations often leasing within 2 to 3 weeks.
The main factor that causes vacancy rates to vary across Japan's neighborhoods is proximity to a major train or metro station, with properties under 10 minutes' walk commanding much faster lease-up times than those further away.
The highest tenant turnover and vacancy period in Japan occurs from February through April, when the fiscal year and school year both end and restart, creating a concentrated wave of moves that can leave landlords with brief gaps if they are not prepared.
We have a whole part covering the best rental strategies in our pack about buying a property in Japan.
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Where do rentals perform best in Japan in 2026?
Which neighborhoods have the highest long-term demand in Japan in 2026?
As of early 2026, the three neighborhoods with the highest overall long-term rental demand in Japan are Shinjuku, Shibuya, and Minato in central Tokyo, all of which combine major employment hubs, excellent rail access, and diverse tenant pools.
For families seeking long-term rentals in Japan, the strongest demand concentrates in Tokyo's Setagaya, Bunkyo, and Suginami wards, as well as Osaka's Tennoji and Suita areas, where good schools, parks, and family-friendly amenities drive consistent interest.
Students create the strongest long-term rental demand in Japan around Bunkyo ward in Tokyo (home to the University of Tokyo and several other institutions), the Waseda area in Shinjuku, and neighborhoods near Osaka University and Kyoto University campuses.
Expats and international professionals concentrate their long-term rental demand in Tokyo's Minato ward (especially Azabu, Roppongi, and Hiroo), Shibuya's Ebisu area, and Meguro's Nakameguro neighborhood, where English-friendly services and international schools are accessible.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Japan.
Which neighborhoods have the best yield in Japan in 2026?
As of early 2026, the three neighborhoods with the best rental yields in Japan are typically found in Tokyo's outer wards like Adachi, Katsushika, and Itabashi, as well as central Osaka and Fukuoka, where lower purchase prices relative to rents create stronger returns.
The estimated gross rental yield range in these higher-yielding neighborhoods runs from approximately 5% to 7%, compared to just 2.5% to 4% in Tokyo's premium central five wards.
The main characteristic that allows these neighborhoods to achieve higher yields is the gap between property prices and rents: while central Tokyo commands prestige premiums that inflate purchase prices faster than rents, outer wards and regional cities maintain more balanced ratios between what you pay and what you collect.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Japan.
Where do tenants pay the highest rents in Japan in 2026?
As of early 2026, the three neighborhoods where tenants pay the highest rents in Japan are Minato (especially Azabu and Aoyama), Shibuya (particularly Hiroo and Ebisu), and Chiyoda (notably the Bancho area), where 1-bedroom apartments regularly exceed ¥300,000 per month ($2,000 or €1,875).
The typical monthly rent range for a standard apartment in these premium Tokyo neighborhoods runs from ¥250,000 to ¥500,000 ($1,670 to $3,340 or €1,560 to €3,125) depending on unit size and building quality.
The main characteristic that makes these neighborhoods command the highest rents is their unique combination of embassy proximity, international school access, high-end retail, and the prestige factor of addresses that signal success in Japan's business culture.
The tenant profile in these highest-rent neighborhoods typically includes senior executives at multinational corporations, diplomats, successful entrepreneurs, and high-net-worth individuals, many of whom have employer housing allowances that enable them to pay premium rents.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Japan. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What do tenants actually want in Japan in 2026?
What features increase rent the most in Japan in 2026?
As of early 2026, the three property features that increase monthly rent the most in Japan are: proximity to a train station (under 10 minutes' walk is critical), building age and seismic safety perception (newer or visibly well-maintained properties command premiums), and the presence of an auto-lock entry system with a video intercom.
Walk-to-station time is the single most valuable feature in Japan, with properties under 5 minutes from a major station commanding rent premiums of 10% to 20% over otherwise comparable units 15 minutes away.
One commonly overrated feature that landlords invest in but tenants rarely pay extra for in Japan is high-end kitchen appliances, since most Japanese tenants expect to provide their own refrigerator and washing machine, and elaborate built-in systems do not move the needle on rent.
One affordable upgrade that provides strong return on investment for landlords in Japan is installing a modern video intercom with auto-lock, which typically costs ¥50,000 to ¥100,000 but can add ¥5,000 to ¥10,000 per month to achievable rent while also speeding up lease-up time.
Do furnished rentals rent faster in Japan in 2026?
As of early 2026, furnished apartments in Japan typically rent about 1 to 3 weeks faster than unfurnished ones in expat-heavy neighborhoods, but in local Japanese markets the difference is much smaller because most tenants expect to bring their own furniture.
Furnished rentals in Japan command a rent premium of approximately 10% to 25% over unfurnished equivalents, but this premium is concentrated in areas serving foreign professionals, corporate relocations, and short-to-medium-term stays rather than the general Japanese market.
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How regulated is long-term renting in Japan right now?
Can I freely set rent prices in Japan right now?
Landlords in Japan can freely set the initial rent price at market rates when signing a new lease, with no government-mandated rent control on starting rents in any major city.
Rent increases during an existing tenancy are not strictly capped by law, but Japan's tenant-friendly legal framework under the Act on Land and Building Leases means that increases must be justified and tenants can dispute unreasonable hikes, so in practice landlords typically raise rents modestly (1% to 3% per year) or wait until lease renewal to adjust.
What's the standard lease length in Japan right now?
The standard lease length for residential rentals in Japan is 2 years under an ordinary lease (futsu chintai), which automatically renews unless either party gives proper notice, or under a fixed-term lease (teiki shakuya) that ends at the stated date without automatic renewal.
The maximum security deposit a landlord can legally require in Japan is not strictly capped by national law, but market practice is 1 to 2 months' rent, and in some markets landlords also collect "key money" (reikin) of 1 to 2 months, which is a non-refundable gift to the landlord.
Deposit return rules in Japan require landlords to return the security deposit minus legitimate deductions for damage beyond normal wear and tear, typically within 1 to 2 months after move-out, with disputes resolvable through local consumer centers or small claims court.
We made this infographic to show you how property prices in Japan compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
How does short-term renting really work in Japan in 2026?
Is Airbnb legal in Japan right now?
Airbnb-style short-term rentals are legal in Japan under the Minpaku Law (Private Lodging Business Act), but you must register your property with the local government and obtain a notification number to display on your listing.
To operate a Minpaku in Japan, you need to file a registration with your local ward or city office, meet fire safety and space requirements (minimum 3.3 square meters per guest), and in many cases notify neighbors, with the process typically taking 2 to 4 weeks.
Japan's national Minpaku law caps short-term rentals at 180 days per year (counted April to April, noon to noon), though local governments can impose stricter limits, and some Tokyo wards restrict operation to weekends or specific seasons only.
The most common penalty for operating an unlicensed or non-compliant short-term rental in Japan is a fine of up to ¥1,000,000 ($6,700 or €6,250), removal from booking platforms, and potential criminal prosecution for running an unlicensed hotel.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Japan.
What's the average short-term occupancy in Japan in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Japan's major tourist markets is approximately 65% to 75%, with Tokyo averaging around 73%, Osaka around 66%, and Kyoto around 66%.
The realistic low-to-high occupancy rate range that most short-term rentals experience in Japan spans from about 50% for average listings to 85% or higher for well-optimized properties in prime locations.
The highest occupancy months for short-term rentals in Japan are typically March through May (cherry blossom season), October through November (autumn foliage), and late December through early January (New Year holidays), when tourism peaks.
The lowest occupancy months for short-term rentals in Japan are usually January (after New Year), June (rainy season), and mid-summer July and August for urban areas (though beach and mountain destinations see summer peaks).
Finally, please note that you can find much more granular data about this topic in our property pack about Japan.
What's the average nightly rate in Japan in 2026?
As of early 2026, the average nightly rate (ADR) for short-term rentals in Japan's major markets is approximately ¥25,000 ($170 or €160) in Tokyo, ¥17,000 ($115 or €105) in Osaka, and ¥29,000 ($195 or €180) in Kyoto.
The realistic low-to-high nightly rate range for most short-term rental listings in Japan runs from about ¥8,000 ($55 or €50) for basic studio units in less central locations to ¥50,000+ ($335 or €310) for premium entire apartments in top tourist neighborhoods.
The typical nightly rate difference between peak season and off-season in Japan is around 30% to 50%, with cherry blossom season and autumn foliage periods commanding the highest premiums, sometimes double the rates of January or June.
Is short-term rental supply saturated in Japan in 2026?
As of early 2026, short-term rental supply in Japan's major tourist markets is moderately saturated in popular central areas but still has room in outer neighborhoods and emerging destinations, with regulation being a bigger constraint than pure market competition.
The current trend in active short-term rental listings in Japan has been stable to slightly declining in heavily regulated areas like central Tokyo and Kyoto, while growing in Osaka and regional destinations where rules are less restrictive.
The most oversaturated neighborhoods for short-term rentals in Japan include Shinjuku, Shibuya, and Asakusa in Tokyo, Namba and Dotonbori in Osaka, and central Higashiyama in Kyoto, where high listing density makes it harder to stand out.
Neighborhoods in Japan that still have room for new short-term rental supply include outer Tokyo wards like Sumida (near Tokyo Skytree), emerging Osaka areas like Tennoji, and less-touristed Kyoto suburbs with good rail access to the historic center.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Japan, we always rely on the strongest methodology we can, and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| MLIT Real Estate Legal Overview | Japan's national ministry explaining official property transaction rules. | We used it to ground ownership and leasing rules in government documentation. We relied on it to confirm there are no foreign ownership restrictions. |
| Act on Land and Building Leases | Official government English translation of Japan's core lease law. | We used it to explain tenant protections, lease terms, and renewal norms. We translated legal language into practical landlord implications. |
| Private Lodging Business Act (Minpaku) | Official legal text for Japan's national short-term rental framework. | We used it to confirm the 180-day cap and registration requirements. We mapped what this means for Airbnb-style strategies in practice. |
| National Tax Agency Non-Resident Guide | Japan's official tax authority explaining rental income treatment. | We used it to explain withholding tax mechanics for non-residents. We built realistic net-yield calculations based on actual tax rules. |
| Global Property Guide Japan Yields | Long-running cross-country property dataset with consistent methodology. | We used it as a city-comparable gross yield benchmark across Japan. We set confident yield starting points, then adjusted for Japan-specific costs. |
| Savills Japan Tokyo Residential Q3 2025 | Major global consultancy with transparent research methodology. | We used it for defensible rent-per-sqm baselines entering 2026. We converted per-sqm rents into studio, 1BR, and 2BR ranges. |
| Statistics Bureau Housing and Land Survey | Japan's official statistical agency for housing stock data. | We used it to ground vacancy discussion in official measurement. We explained why headline vacancy differs from investor-relevant vacancy. |
| AirDNA Tokyo Market Overview | Widely used short-term rental data provider tracking Airbnb performance. | We used it for grounded occupancy and ADR snapshots for Tokyo STRs. We translated metrics into realistic earnings after the 180-day rule. |
| CBRE Japan Cap Rate Survey | Top-tier global brokerage publishing regular Japan yield benchmarks. | We used it to triangulate investor-required NOI yields against gross estimates. We sanity-checked what's realistic after costs. |
| Kanazawa City Fixed Asset Tax Guide | Official municipal guide spelling out tax rates and assessment methods. | We used it as a concrete example of fixed-asset tax mechanics. We built all-in monthly cost estimates reflecting real billing structure. |
We have made this infographic to give you a quick and clear snapshot of the property market in Japan. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
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