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
If you're thinking about buying rental property in Japan, understanding how much you can actually earn is the first step.
This article breaks down Japan's rental yields in 2026, covering gross and net returns, the best neighborhoods, and the costs that eat into your profit.
We constantly update this blog post to reflect the latest market data and trends.
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
- Tokyo's central five wards (Chiyoda, Chuo, Minato, Shibuya, Shinjuku) offer gross yields around 2.6%, while outer wards like Katsushika and Adachi can reach 5% or more in Japan.
- Japan's average gross rental yield sits at roughly 4.3% in early 2026, which is notably lower than many other Asian markets due to the country's low interest rate environment.
- Net yields in Japan typically drop by about 1.0 to 1.8 percentage points from gross, mainly because of property taxes, management fees, and vacancy buffers.
- Osaka City delivers higher gross yields than Tokyo, averaging around 4.7% thanks to lower purchase prices relative to rents.
- Japan's investor-relevant vacancy rate for well-located apartments in Tokyo sits around 3.5%, much lower than the headline national housing vacancy figure that includes abandoned homes.
- Fixed asset tax and city planning tax in Japan typically cost landlords between 0.4% and 0.9% of market value annually, not the full 1.7% statutory rate.
- Compact units (studios and 1K apartments) in Japan tend to deliver the best yield per square meter because they match the deep demand from singles and young professionals.
- High-yield areas in Japan often sit 15 to 30 minutes from central business districts, where purchase prices fall faster than rents do.
What are the rental yields in Japan as of 2026?
What's the average gross rental yield in Japan as of 2026?
As of early 2026, the average gross rental yield in Japan for residential properties across all types is approximately 4.3%.
Most typical residential properties in Japan fall within a gross yield range of 3.0% to 6.0%, depending on location and property type.
Japan's average gross yield is lower than many emerging Asian markets but comparable to other mature, low-interest-rate economies, reflecting the country's stable rental market and high property prices in major cities.
The single biggest factor influencing gross rental yields in Japan right now is the wide gap between property prices in Tokyo's prime cores versus the rest of the country, because Tokyo's expensive neighborhoods compress yields significantly while regional cities offer higher returns.
What's the average net rental yield in Japan as of 2026?
As of early 2026, the average net rental yield in Japan for residential rental properties is approximately 3.0%.
The typical difference between gross and net rental yields in Japan is around 1.0 to 1.8 percentage points, which represents the impact of operating costs on your actual returns.
Property taxes (fixed asset tax and city planning tax) combined with management fees are the expense categories that most significantly reduce gross yield to net yield in Japan, often accounting for 0.7% to 1.5% of property value annually.
Most standard investment properties in Japan deliver net yields in the range of 2.0% to 4.5%, with Tokyo's prime areas at the lower end and regional cities or outer suburbs at the higher end due to cheaper entry prices.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Japan.
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.
What yield is considered "good" in Japan in 2026?
In Japan, a gross rental yield of 3.5% to 4.5% is generally considered "good" by local investors when buying in stable, high-demand areas like Tokyo's 23 wards, while yields above 5.5% are seen as good in regional cities where more risk is involved.
The threshold that typically separates average-performing properties from high-performing ones in Japan is around 4.5% gross yield, because anything above this usually means you're either in a less competitive location or you've found an undervalued property.
How much do yields vary by neighborhood in Japan as of 2026?
As of early 2026, gross rental yields in Japan can vary by 2 to 4 percentage points between the highest-yield and lowest-yield neighborhoods within the same metro area.
The neighborhoods that typically deliver the highest rental yields in Japan are outer wards and commuter-belt areas with affordable purchase prices but solid renter demand, such as Katsushika (Kameari), Edogawa (Kasai), Adachi (Kita-Senju), and parts of Naniwa or Nishinari in Osaka.
The neighborhoods that typically deliver the lowest rental yields in Japan are prestige districts with very high property prices, such as Tokyo's central five wards (Chiyoda, Chuo, Minato, Shibuya, Shinjuku) and Osaka's prime central areas like Kita, Nishi, and Chuo.
The main reason yields vary so much across neighborhoods in Japan is that property prices in prestige cores rise much faster than rents do, while outer areas keep prices more affordable relative to rental income.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Japan.
How much do yields vary by property type in Japan as of 2026?
As of early 2026, gross rental yields in Japan range from around 3% for newer, well-located condos in prime areas to 5% or higher for older apartments and detached houses in suburban locations.
Older walk-up apartments far from stations and detached houses in regional areas currently deliver the highest average gross yields in Japan because their purchase prices are low relative to rent.
Newer condominium units in prime locations currently deliver the lowest average gross yields in Japan because buyers pay a premium for quality and liquidity.
The key reason yields differ between property types in Japan is that higher-quality, more liquid properties command premium prices that compress returns, while properties with more vacancy risk or maintenance needs offer higher yields to compensate investors.
By the way, you might want to read the following:
What's the typical vacancy rate in Japan as of 2026?
As of early 2026, the investor-relevant rental vacancy rate in Japan for well-located apartments in major cities sits around 3.5% in Tokyo's 23 wards, with broader averages ranging from 4% to 10% depending on the area.
Vacancy rates across different neighborhoods in Japan realistically range from around 3% in high-demand Tokyo wards to 10% or higher in weaker regional submarkets.
The main factor that currently drives vacancy rates in Japan is proximity to rail stations and employment centers, because renters strongly prefer convenient commutes and will leave units that don't offer easy access.
Japan's rental vacancy rate in investor-grade properties is actually quite low compared to the headline national housing vacancy figure, which includes abandoned homes, second homes, and inherited empty properties that distort the picture.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Japan.
What's the rent-to-price ratio in Japan as of 2026?
As of early 2026, the average rent-to-price ratio in Japan (monthly rent divided by purchase price, expressed annually) is approximately 0.36% monthly or 4.3% annually, which is essentially another way of stating the gross yield.
A rent-to-price ratio above 0.35% monthly (or gross yield above 4%) is generally considered favorable for buy-to-let investors in Japan, and this ratio directly equals your gross rental yield when annualized.
Japan's rent-to-price ratio is lower than many Southeast Asian cities but comparable to other developed Asian markets like Singapore and Hong Kong, reflecting Japan's mature property market and low interest rate environment.
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.
Which neighborhoods and micro-areas in Japan give the best yields as of 2026?
Where are the highest-yield areas in Japan as of 2026?
As of early 2026, the highest-yield areas in Japan include outer Tokyo wards like Katsushika (around Kameari station), Edogawa (Kasai area), and Adachi (Kita-Senju area), as well as parts of Osaka's Naniwa and Nishinari districts.
These top-performing areas in Japan typically deliver gross rental yields in the 5% to 6% range, significantly higher than prime central locations.
The main characteristic these high-yield areas like Katsushika, Edogawa, and Naniwa share is that they offer affordable purchase prices while still benefiting from solid commuter demand and reasonable proximity to employment centers.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Japan.
Where are the lowest-yield areas in Japan as of 2026?
As of early 2026, the lowest-yield areas in Japan are Tokyo's central five wards (Chiyoda, Chuo, and Minato in particular) and Osaka's prime core districts like Kita (Umeda) and Nishi.
These prestigious areas in Japan typically deliver gross rental yields in the 2% to 3% range, sometimes even lower for ultra-premium properties.
The main reason yields are compressed in areas like Chiyoda, Minato, and Kita is that purchase prices have risen much faster than rents due to strong investor and owner-occupier demand for prestige addresses.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Japan.
Which areas have the lowest vacancy in Japan as of 2026?
As of early 2026, the areas with the lowest residential vacancy rates in Japan include Tokyo's Shinagawa, Meguro, and Bunkyo wards, as well as Setagaya and Toshima, all benefiting from strong transit access and employment proximity.
These low-vacancy areas in Japan typically maintain vacancy rates between 2% and 4%, meaning landlords rarely struggle to find tenants.
The main demand driver that keeps vacancy low in areas like Shinagawa, Meguro, and Bunkyo is excellent rail connectivity combined with proximity to major business districts, which makes these neighborhoods highly attractive to working professionals.
The trade-off investors face when targeting these low-vacancy areas in Japan is that purchase prices are significantly higher, which compresses gross yields even though occupancy is very stable.
Which areas have the most renter demand in Japan right now?
The neighborhoods currently experiencing the strongest renter demand in Japan include Tokyo's Shinagawa, Nakano, and Koto wards, as well as Osaka's Kita/Umeda fringe and Fukushima area.
The renter profile driving most of the demand in these areas consists of young professionals and dual-income couples who want good rail access and relatively affordable rents compared to ultra-prime cores.
In high-demand neighborhoods like Nakano, Shinagawa, and Fukushima, rental listings typically get filled within two to four weeks when priced appropriately, reflecting the tight competition among renters.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Japan.
Which upcoming projects could boost rents and rental yields in Japan as of 2026?
As of early 2026, the top infrastructure projects expected to boost rents in Japan include the Shibuya-area redevelopment, Shinagawa/Takanawa station upgrades, and Osaka's post-Expo momentum including the Yumeshima area pipeline.
The neighborhoods most likely to benefit from these projects include Minato and Shinagawa wards in Tokyo (near the station upgrades), Shibuya's surrounding areas, and Osaka's waterfront-adjacent districts.
Investors might realistically expect rent increases of 3% to 8% over the medium term once these major projects are completed, depending on how close the property sits to the improved infrastructure.
You'll find our latest property market analysis about Japan here.
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What property type should I buy for renting in Japan as of 2026?
Between studios and larger units in Japan, which performs best in 2026?
As of early 2026, studios and compact 1K units generally outperform larger units in Japan in terms of rental yield and occupancy rates, especially in major metro areas like Tokyo and Osaka.
Studios in Japan typically deliver gross yields of 4% to 5% (roughly JPY 55,000 to 75,000 monthly rent, or USD 360 to 490, EUR 330 to 450), while larger family units often yield 3% to 4% due to higher purchase prices per unit.
The main factor explaining this difference is that Japan has a huge pool of single renters (young professionals, students, international residents) who drive strong demand for compact units, keeping vacancy low and rents competitive.
However, larger family units can be the better investment choice in Japan if you're targeting stable, long-term tenants like families who rarely move, which reduces turnover costs even if the headline yield is lower.
What property types are in most demand in Japan as of 2026?
As of early 2026, the most in-demand property type in Japan for rental purposes is the well-located apartment or condominium unit within a 10-minute walk of a train station.
The top three property types ranked by current tenant demand in Japan are: (1) compact apartments near stations, (2) newer reinforced concrete buildings with modern amenities, and (3) 1LDK units suitable for couples or remote workers.
The primary trend driving this demand pattern in Japan is the continued preference for convenience and earthquake-resistant construction among renters, combined with more people working hybrid schedules who want livable spaces close to transit.
One property type currently underperforming in demand in Japan is the older wooden detached house far from stations, which attracts a much thinner tenant pool and faces longer vacancy periods.
What unit size has the best yield per m² in Japan as of 2026?
As of early 2026, the unit size range that delivers the best gross rental yield per square meter in Japan is typically between 20 and 35 square meters, covering studios and compact 1K apartments.
These optimal-sized units in Japan typically generate gross rental yields of 4% to 5% per square meter, with monthly rents around JPY 2,500 to 4,500 per sqm (USD 16 to 30, EUR 15 to 27).
The main reason smaller or larger units tend to have lower yield per square meter in Japan is that ultra-small units sacrifice livability while larger units push purchase prices up disproportionately compared to the rent increase.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable 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 costs cut my net yield in Japan as of 2026?
What are typical property taxes and recurring local fees in Japan as of 2026?
As of early 2026, the annual property tax for a typical rental apartment in Japan costs approximately JPY 80,000 to 180,000 (USD 520 to 1,170, EUR 480 to 1,080), depending on the property's assessed value and location.
Other recurring local fees landlords must budget for annually in Japan include building management fees (for condos) typically ranging from JPY 10,000 to 30,000 per month (USD 65 to 195, EUR 60 to 180) plus repair reserve contributions.
These taxes and fees typically represent around 8% to 15% of gross rental income in Japan, making them a significant factor in net yield calculations.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Japan.
What insurance, maintenance, and annual repair costs should landlords budget in Japan right now?
The estimated annual landlord insurance cost for a typical rental property in Japan runs approximately JPY 15,000 to 40,000 (USD 100 to 260, EUR 90 to 240) for basic fire and liability coverage.
The recommended annual maintenance and repair budget in Japan is roughly 0.5% to 1.0% of property value, or about 5% to 10% of annual rental income, with older properties requiring more.
The type of repair expense that most commonly catches landlords off guard in Japan is water heater replacement and air conditioning unit failures, which can cost JPY 100,000 to 300,000 (USD 650 to 1,950, EUR 600 to 1,800) unexpectedly.
The total combined annual cost landlords should realistically budget for insurance, maintenance, and repairs in Japan is approximately JPY 150,000 to 400,000 (USD 975 to 2,600, EUR 900 to 2,400) for a standard rental apartment.
Which utilities do landlords typically pay, and what do they cost in Japan right now?
In Japan, tenants typically pay all day-to-day utilities (electricity, gas, water) in standard long-term leases, while landlords cover building-level common area costs through management fees and sometimes provide internet in furnished units.
For landlord-paid utilities (mainly common area electricity and internet if included), the estimated monthly cost in Japan is approximately JPY 3,000 to 8,000 (USD 20 to 52, EUR 18 to 48) depending on building size and amenities.
What does full-service property management cost, including leasing, in Japan as of 2026?
As of early 2026, full-service property management fees in Japan typically run 3% to 6% of monthly rent (approximately JPY 3,000 to 9,000 or USD 20 to 58, EUR 18 to 54 monthly for a standard apartment).
The typical leasing or tenant-placement fee charged on top of ongoing management in Japan is around one month's rent (JPY 60,000 to 120,000, USD 390 to 780, EUR 360 to 720), which landlords should annualize based on expected turnover.
What's a realistic vacancy buffer in Japan as of 2026?
As of early 2026, landlords in Japan should set aside approximately 4% to 10% of annual rental income as a vacancy buffer, depending on the property's location and tenant demand.
The typical number of vacant weeks per year landlords experience in Japan ranges from 2 to 3 weeks in high-demand Tokyo wards to 4 to 6 weeks in regional cities or less popular neighborhoods.
Buying real estate in Japan can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
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 |
|---|---|---|
| Savills Research Tokyo Residential Leasing (Q2/2025) | Savills is a global real estate consultancy that publishes transparent, method-based market indices and commentary. | We used it for Tokyo 23-ward and central five wards rent levels (JPY/sqm/month) and occupancy rates. We then converted rent-per-sqm into annual rent and computed yields versus sale prices. |
| Savills Research Tokyo Residential Sales (2H/2025) | It's a large, internationally recognized research publisher with consistent market definitions and cross-checked datasets. | We used it for Tokyo condo sale prices (new and resale, per sqm) to pair with rents for yield calculations. We used its area segmentation to explain neighborhood-level yield differences. |
| Savills Research Osaka Residential Spotlight (02/2025) | It combines professional research with clear definitions for like-for-like comparisons across different property types and locations. | We used it for Osaka rent levels (JPY/sqm/month) and context on demand drivers. We translated these metrics into annual rent and computed yields against transaction prices. |
| Kinki REINS Monthly Report (Dec 2025) | REINS organizations are government-designated networks under Japan's real estate brokerage system and publish transaction-based statistics. | We used it for Osaka City resale condo price per sqm from actual transactions. We paired it with Osaka rents from Savills to produce a grounded gross-yield estimate. |
| Institute of Real Estate Management Japan (IREMJ) Rental Housing Survey (2025) | It's a professional industry institute publishing structured survey results and operating metrics used by landlords and investors. | We used it for rental vacancy rates by area and operating expense ratios. We used these to move from gross yield to net yield ranges in our calculations. |
| JETRO Real Estate Taxes Guide | JETRO is a government-related trade organization that summarizes tax rules with references to official practice. | We used it to anchor the headline statutory rates for fixed asset tax and city planning tax. We translated statutory rates into realistic effective percentages of market value. |
| PwC Tax Summaries Japan | PwC is a global professional services firm that publishes regularly updated tax guidance for investors. | We used it to cross-check property tax rates and confirm the effective tax burden landlords face. We validated our net yield deductions against their guidance. |
| Statistics Bureau of Japan Housing and Land Survey | It's Japan's official statistics agency and the canonical source for national housing and vacancy structure data. | We used it to explain why Japan's headline vacancy is high but investor-relevant rental vacancy is different. We used it as macro context, not for rental vacancy math. |
| MLIT Land and Real Estate Statistics Portal | MLIT is the national ministry responsible for land, housing, and transport and publishes core real estate datasets. | We used it as the official backbone for price and rent context. We used it to triangulate direction of travel when forming our 2026 estimates. |
| REINS TOWER Data Library | It's the national hub for REINS publications built from broker network registrations and transactions. | We used it to cross-check that regional REINS figures are consistent with broader market reporting. We also used it for methodology context on what's included. |
| Bank of Japan Monetary Policy | The BoJ is Japan's central bank and its policy stance drives mortgage rates and yield expectations. | We used it to explain why "good yield" thresholds in Japan are structurally lower than high-rate countries. We used it as macro context for investor expectations. |
| Tokyo Metropolitan Government Urban Portal | It's the official metro-level portal for Tokyo where major projects and area plans are commonly referenced. | We used it to triangulate where infrastructure and redevelopment could support rents. We translated that into where yields could tighten or rents could rise. |
| Osaka City Government Statistics | It's the official municipal source for population, planning, and major project announcements in Osaka. | We used it to support demand drivers like population trends and project pipelines. We connected those drivers to rent resilience and vacancy expectations. |
| Real Estate Economic Institute (REEI) | REEI is a specialist institute widely quoted by major brokerages for Japan's condo supply and pricing data. | We used it as a triangulation point on new-build supply constraints affecting rents. We used it for context on why rents are sticky upward in early 2026. |
| CBRE Japan Cap Rate Survey | CBRE is a top-tier global real estate advisor that publishes institutional pricing and yield expectations. | We used it qualitatively to sanity-check that our computed retail investor yields sit above prime institutional multifamily yields. We did not rely on it alone for numbers. |
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