Authored by the expert who managed and guided the team behind the Japan Property Pack
Yes, the analysis of Tokyo's property market is included in our pack
So you're thinking about buying a property in Tokyo to rent it out, but you're not sure where to start or what the real numbers look like.
This guide covers everything a foreign investor needs to know about renting out residential property in Tokyo in 2026, from legal requirements to realistic yields and neighborhood performance.
We keep this article constantly updated so you always have access to fresh, reliable data.
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 Tokyo.
Insights
- Tokyo's gross rental yields in 2026 sit around 3.5% to 4.2%, but after you factor in condo fees and property taxes, net yields compress to roughly 2.0% to 2.8%, which is notably lower than many other global capitals.
- The 180-day annual cap on minpaku (short-term rentals) in Tokyo means your Airbnb must generate significantly higher nightly revenue than a long-term lease to be worthwhile financially.
- Non-resident landlords in Tokyo must appoint a local tax agent for filings, and if a Japanese company rents your property, they withhold 20.42% from your rent payments automatically.
- Tokyo's vacancy rates for well-priced rentals run between 0.5 and 1.5 months per year, which is remarkably low compared to most international cities thanks to the deep tenant pool.
- Toshima, Koto, and Sumida wards in Tokyo often deliver the best rental yields because purchase prices are more moderate while renter demand remains strong from commuters and families.
- A studio apartment in Tokyo in 2026 rents for around 115,000 to 135,000 yen per month, which translates to roughly 730 to 860 USD or 680 to 800 EUR at current exchange rates.
- Short-term rentals in Tokyo average around 70% to 75% occupancy with nightly rates near 25,000 yen (about 160 USD), but your condo building's bylaws can block STR entirely regardless of national law.
- Walk time to the nearest train station is the single most powerful rent-boosting factor in Tokyo, often adding a premium of 10% or more for properties within five minutes of a station.
Can I legally rent out a property in Tokyo as a foreigner right now?
Can a foreigner own-and-rent a residential property in Tokyo in 2026?
As of early 2026, foreigners can legally buy residential property in Tokyo and rent it out without any nationality-based restrictions, since Japan has no blanket ban on foreign property ownership.
The most common ownership structure for foreign investors in Tokyo is direct individual ownership (personal name), though some choose to set up a Japanese corporation (kabushiki kaisha) for tax planning or liability reasons.
The single most common limitation foreigners face is not legal but practical: many Tokyo condo buildings have management associations that restrict or prohibit short-term rentals, which can limit your rental strategy options even when national law permits it.
If you're not a local, you might want to read our guide to foreign property ownership in Tokyo.
Do I need residency to rent out in Tokyo right now?
You generally do not need Japanese residency to be a landlord in Tokyo, though you will need to handle certain administrative and tax requirements through local representatives.
Japan does not require a local tax identification number to earn rental income, but non-resident landlords must appoint a tax agent in Japan to handle filings and communications with the National Tax Agency.
A Japanese bank account is not legally required to collect rent, but most property management companies and tenants strongly prefer domestic transfers, so the common workaround is having your manager collect rent and remit funds to your overseas account periodically.
Managing a rental property in Tokyo entirely remotely is practically feasible if you hire a local property management company to handle tenant sourcing, contracts, maintenance, and emergencies on your behalf.
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What rental strategy makes the most money in Tokyo in 2026?
Is long-term renting more profitable than short-term in Tokyo in 2026?
As of early 2026, long-term renting in Tokyo is typically more profitable on a risk-adjusted basis because short-term rentals are capped at 180 days per year under the minpaku framework, which limits their earning potential.
A well-managed long-term rental in Tokyo might generate around 2.4 million yen (about 15,300 USD or 14,200 EUR) annually in net income, while a short-term rental could theoretically earn 3 to 4 million yen gross, but only if occupancy and nightly rates are strong enough during the limited 180-day window.
Short-term rentals tend to favor properties in tourist-heavy areas like Shinjuku, Shibuya, or Asakusa, and smaller units that appeal to solo travelers or couples, though building bylaw restrictions in central Tokyo often make STR impossible regardless of location.
What's the average gross rental yield in Tokyo in 2026?
As of early 2026, the average gross rental yield for residential properties in Tokyo's 23 wards sits around 3.5% to 4.2%, which is relatively modest compared to many other global investment destinations.
The realistic range for gross rental yields in Tokyo spans from about 2.8% in premium central wards like Minato and Chiyoda to around 4.5% in more affordable wards like Toshima or Koto where purchase prices are lower relative to rents.
Studios and compact one-bedroom apartments in Tokyo typically achieve the highest gross rental yields because they command proportionally higher rent per square meter than larger family units.
By the way, we have much more granular data about rental yields in our property pack about Tokyo.
What's the realistic net rental yield after costs in Tokyo in 2026?
As of early 2026, the average net rental yield after all costs for residential properties in Tokyo sits around 2.0% to 2.8%, which reflects the significant expense burden that Tokyo landlords carry.
Most landlords in Tokyo realistically experience net yields ranging from about 1.5% in premium central locations to around 3.2% in higher-yielding outer wards, depending on building fees and management costs.
The three main cost categories that compress gross yield to net yield in Tokyo are: monthly condo management fees plus repair reserve (often 25,000 to 45,000 yen), property and city planning taxes (averaging 100,000 to 240,000 yen annually), and property management fees if you outsource (typically 3% to 6% of rent).
You might want to check our latest analysis about gross and net rental yields in Tokyo.
What monthly rent can I get in Tokyo in 2026?
As of early 2026, a studio in Tokyo rents for around 115,000 to 135,000 yen (730 to 860 USD or 680 to 800 EUR), a one-bedroom for 175,000 to 215,000 yen (1,110 to 1,370 USD or 1,030 to 1,270 EUR), and a two-bedroom for 240,000 to 300,000 yen (1,530 to 1,910 USD or 1,420 to 1,780 EUR).
A realistic entry-level monthly rent for a decent studio in Tokyo starts around 90,000 to 110,000 yen (570 to 700 USD or 530 to 650 EUR) in less central wards like Nerima or Adachi.
A typical mid-range one-bedroom apartment in Tokyo rents for around 160,000 to 200,000 yen (1,020 to 1,270 USD or 950 to 1,180 EUR) in well-connected areas of wards like Nakano or Toshima.
A typical mid-to-high two-bedroom apartment in Tokyo rents for around 280,000 to 350,000 yen (1,780 to 2,230 USD or 1,660 to 2,070 EUR) in family-friendly areas like Setagaya or Koto.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Tokyo.
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 Tokyo in 2026?
What's the total "all-in" monthly cost to hold a rental in Tokyo in 2026?
As of early 2026, the total all-in monthly cost to hold and maintain a typical rental condo in Tokyo runs around 40,000 to 80,000 yen (255 to 510 USD or 240 to 475 EUR), not including mortgage payments if financed.
The realistic low-to-high monthly cost range for most standard Tokyo rental condos spans from about 30,000 yen (190 USD or 180 EUR) for smaller units in modest buildings to over 100,000 yen (640 USD or 590 EUR) for larger units in tower mansions with premium amenities.
The single largest contributor to monthly holding costs in Tokyo is typically the combined condo management fee and repair reserve fund, which together can reach 25,000 to 45,000 yen monthly and can be even higher in older buildings or towers with elevators and shared facilities.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Tokyo.
What's the typical vacancy rate in Tokyo in 2026?
As of early 2026, well-located and correctly priced rental properties in Tokyo's 23 wards experience vacancy rates of roughly 4% to 12%, which translates to about half a month to one and a half months of vacancy per year.
A Tokyo landlord should realistically budget for about 0.5 to 1.5 months of vacancy per year because even in a tight market, tenant turnover happens and re-leasing takes time, especially during slower seasons.
The main factor that causes vacancy rates to vary across Tokyo neighborhoods is proximity to major train stations and employment centers, with properties within five minutes' walk of stations in high-demand wards filling much faster than those farther out.
The highest tenant turnover and vacancy in Tokyo typically occurs from January through March, which coincides with Japan's fiscal year end and the graduation and job transfer season when many leases end simultaneously.
We have a whole part covering the best rental strategies in our pack about buying a property in Tokyo.
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Where do rentals perform best in Tokyo in 2026?
Which neighborhoods have the highest long-term demand in Tokyo in 2026?
As of early 2026, the top three neighborhoods with the highest overall long-term rental demand in Tokyo are Shinjuku, Shibuya, and Minato wards, which consistently attract renters due to their unmatched transit access and employment density.
Families in Tokyo tend to favor Setagaya (especially around Futako-Tamagawa and Sangenjaya), Bunkyo (for its schools and parks), and Koto (particularly the Toyosu waterfront area) because these wards offer more space, greenery, and family-oriented infrastructure.
Students in Tokyo cluster in Bunkyo (near major universities), Toshima (for Ikebukuro access), and Shinjuku (for private schools and transit), with these wards offering affordable options close to educational institutions.
Expats and international professionals in Tokyo overwhelmingly prefer Minato ward (Azabu, Roppongi, Shirokane), followed by Shibuya and Chiyoda, where English-speaking services, international schools, and embassy proximity make daily life easier.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Tokyo.
Which neighborhoods have the best yield in Tokyo in 2026?
As of early 2026, the top three neighborhoods offering the best rental yields in Tokyo are Toshima (Ikebukuro area), Koto (east waterfront), and Sumida (Asakusa and Oshiage area), where solid renter demand meets more moderate purchase prices.
These top-yielding Tokyo neighborhoods typically deliver gross rental yields in the range of 4.0% to 4.8%, compared to the 2.8% to 3.5% more common in premium central wards like Minato or Shibuya.
The main characteristic that allows these Tokyo neighborhoods to achieve higher yields is that they sit just outside the "central six" premium zone, meaning purchase prices are significantly lower while rents remain strong due to excellent transit connections and growing infrastructure.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Tokyo.
Where do tenants pay the highest rents in Tokyo in 2026?
As of early 2026, the top three neighborhoods where tenants pay the highest rents in Tokyo are Minato (especially Azabu and Roppongi), Chiyoda (around the Imperial Palace), and Shibuya (Ebisu and Daikanyama), where premium stock commands significant price premiums.
A standard apartment in these premium Tokyo neighborhoods typically rents for 300,000 to 500,000 yen per month (1,900 to 3,180 USD or 1,780 to 2,960 EUR), with luxury units exceeding 800,000 yen monthly.
The main characteristic that makes these Tokyo neighborhoods command the highest rents is their concentration of corporate headquarters, embassies, high-end retail, and international schools, which creates intense demand from high-income professionals who prioritize convenience and prestige.
The typical tenant profile in these highest-rent Tokyo neighborhoods includes senior executives at multinational firms, embassy staff, successful entrepreneurs, and dual-income professional couples, often with housing allowances that support 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 Tokyo in 2026?
What features increase rent the most in Tokyo in 2026?
As of early 2026, the top three property features that increase monthly rent the most in Tokyo are proximity to a train station (ideally under five minutes' walk), in-unit laundry facilities with a bathroom dryer, and modern auto-lock security systems, since these directly address Tokyo renters' daily commute and compact living concerns.
Walk time to the nearest station is the single most valuable feature in Tokyo, often adding a rent premium of 10% to 15% for properties within five minutes compared to those 10 or more minutes away.
One commonly overrated feature that Tokyo landlords invest in but tenants do not pay much extra for is luxury kitchen finishes, since many Tokyo renters cook infrequently and prioritize bathroom quality and storage over high-end appliances.
One affordable upgrade that provides a strong return on investment for Tokyo landlords is installing high-speed internet infrastructure and ensuring fiber readiness, which has become essential for work-from-home tenants and costs relatively little to add.
Do furnished rentals rent faster in Tokyo in 2026?
As of early 2026, furnished apartments in Tokyo typically rent about one to three weeks faster than unfurnished ones in expat-heavy areas like Minato and Shibuya, though in mainstream Japanese rental markets the difference is minimal because local tenants generally prefer to bring their own furniture.
Furnished apartments in Tokyo's expat-focused neighborhoods command a rent premium of roughly 10% to 20% over comparable unfurnished units, but in standard residential areas the premium is often negligible or nonexistent because the local tenant pool expects unfurnished as the default.
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How regulated is long-term renting in Tokyo right now?
Can I freely set rent prices in Tokyo right now?
Landlords in Tokyo can freely set initial rent prices based on market conditions, with no government-mandated rent control on new leases, though the market itself disciplines pricing since overpriced units simply sit vacant.
Rent increases during an existing tenancy in Tokyo are not formally capped, but Japan's Act on Land and Building Leases allows tenants to dispute increases they consider "unreasonable," and disputes can go to mediation or court, so in practice landlords cannot raise rent arbitrarily mid-lease.
What's the standard lease length in Tokyo right now?
The standard lease length for residential rentals in Tokyo is two years, with most tenants having the option to renew (often with a renewal fee equivalent to one month's rent), though fixed-term leases that do not auto-renew also exist.
Landlords in Tokyo typically require a security deposit of one to two months' rent, though there is no strict legal maximum, and some buildings also charge "key money" (reikin) of one to two months which is a non-refundable gift to the landlord.
Security deposits in Tokyo must be returned at the end of the tenancy minus reasonable deductions for cleaning and damages beyond normal wear, and landlords who withhold deposits improperly can face disputes through consumer protection channels.
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 Tokyo in 2026?
Is Airbnb legal in Tokyo right now?
Airbnb-style short-term rentals are legal in Tokyo under the Private Lodging Business Act (minpaku law), but you must register with local authorities and comply with safety, hygiene, and neighbor notification requirements before accepting any guests.
To operate a short-term rental in Tokyo, you need to file a notification with the relevant local government office under the minpaku framework, which involves submitting floor plans, confirming fire safety compliance, and notifying neighbors of your intention to host.
Properties operating under Tokyo's minpaku framework are capped at 180 days of guest lodging per calendar year, and some Tokyo wards impose additional restrictions (such as limiting operations to weekends or certain seasons) that can reduce this further.
The most common penalty for operating an unlicensed or non-compliant short-term rental in Tokyo includes fines of up to 1 million yen, forced closure, and potential listing removal from platforms like Airbnb, which actively verify host registration numbers.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Tokyo.
What's the average short-term occupancy in Tokyo in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Tokyo sits around 70% to 75%, which reflects strong tourism demand but also significant competition among listings.
The realistic occupancy range for most Tokyo short-term rentals spans from about 55% for poorly located or unoptimized listings to over 85% for well-reviewed properties in prime tourist areas with competitive pricing.
The highest occupancy rates for Tokyo short-term rentals typically occur during cherry blossom season (late March to early April), Golden Week (late April to early May), and autumn foliage season (November), when domestic and international tourism peaks.
The lowest occupancy rates for Tokyo short-term rentals typically occur during the rainy season (June to early July) and the post-New Year period (mid-January to February), when tourism drops and business travel slows.
Finally, please note that you can find much more granular data about this topic in our property pack about Tokyo.
What's the average nightly rate in Tokyo in 2026?
As of early 2026, the average nightly rate for short-term rentals in Tokyo is around 25,000 to 27,000 yen (160 to 170 USD or 150 to 160 EUR), though rates vary significantly by location, property type, and season.
The realistic nightly rate range for most Tokyo short-term rental listings spans from about 12,000 yen (75 USD or 70 EUR) for basic rooms in outer wards to over 50,000 yen (320 USD or 300 EUR) for well-designed entire apartments in central Shibuya or Shinjuku.
The typical nightly rate difference between peak season and off-season in Tokyo is around 5,000 to 10,000 yen (30 to 65 USD or 30 to 60 EUR), with cherry blossom and autumn foliage periods commanding the highest premiums over baseline rates.
Is short-term rental supply saturated in Tokyo in 2026?
As of early 2026, Tokyo's short-term rental market is competitive but not uniformly saturated, with supply concentrated heavily in tourist-centric neighborhoods while other areas remain relatively underserved.
The number of active short-term rental listings in Tokyo has been growing steadily since the post-pandemic tourism recovery, though the 180-day cap and strict building bylaws naturally limit how quickly supply can expand.
The most oversaturated Tokyo neighborhoods for short-term rentals include Shinjuku (especially Kabukicho and the station area), Shibuya center, and Taito ward around Asakusa and Ueno, where competition among similar small apartments is intense.
Neighborhoods in Tokyo that still have room for new short-term rental supply include parts of Sumida (near Tokyo Skytree but away from Asakusa), Shinagawa (near transport hubs), and emerging areas in Koto ward where tourism infrastructure is developing but STR density remains low.
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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 Tokyo, 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 |
|---|---|---|
| Japan Tourism Agency Minpaku Portal | Official government site explaining the private lodging legal framework. | We used it to define what legal Airbnb/minpaku means in Japan. We also used it to frame the requirements for operating short-term rentals legally in Tokyo. |
| National Tax Agency (Real Estate Income) | Japan's tax authority explaining non-resident rental income taxation. | We used it to explain withholding tax mechanics for non-resident landlords. We also used it to highlight when withholding applies and when it does not. |
| Tokyo Kantei (Rent Data) | Widely cited Japanese real estate data provider with transparent methodology. | We used it to anchor long-term rent-per-square-meter for Tokyo's 23 wards. We then converted those figures into monthly rent estimates by unit type. |
| Tokyo Kantei (Condo Price Data) | Primary market data release from a major domestic housing data firm. | We used it to anchor purchase price levels for Tokyo. We then used that price anchor to calculate gross rental yield ranges. |
| REINS Market Watch | Designated real estate transaction network with actual sold prices. | We used it to triangulate price-per-square-meter from real transactions. We used it as a reality check against asking price data. |
| Savills Research Tokyo Residential | Global real estate consultancy with transparent, repeatable market notes. | We used it to corroborate Tokyo rent levels and rent growth trends. We also used it to cross-check tenant demand and vacancy conditions. |
| Statistics Bureau of Japan (Housing Survey) | Japan's official statistics agency for housing stock and vacancy data. | We used it to ground vacancy context with official data. We then translated that into practical vacancy budgeting guidance for Tokyo landlords. |
| Act on Land and Building Leases | Government-backed translation of Japan's core lease law. | We used it to explain rent adjustment rules and tenant protections. We also used it to frame lease length and deposit practices. |
| AirDNA Tokyo Market Snapshot | Widely used private dataset for STR occupancy and nightly rate benchmarks. | We used it to estimate Tokyo short-term occupancy and average nightly rates. We used those figures to compare long-term versus short-term revenue potential. |
| JNTO Tourism Statistics | Official national tourism statistics portal used by government and industry. | We used it to justify why Tokyo short-term demand can be structurally strong. We used it as a demand-side cross-check for STR performance. |
| ValutaFX Exchange Rates | Provides dated, auditable exchange rate history for transparent conversions. | We used it to convert USD-denominated figures into yen. We used it so nightly rate and rent estimates are consistent with early 2026 exchange levels. |
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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