The Tokyo property market continues to present compelling opportunities for investors looking to diversify their portfolios with international real estate. While traditional long-term rentals remain popular, short-term accommodation and extended stays have emerged as increasingly lucrative investment strategies in Japan’s capital. Ken’s Place, a group company of Housing Japan, specializes in transforming standard rental properties into higher-yielding short-term accommodations, offering investors a pathway to enhanced returns in one of Asia’s most stable real estate markets.
The Growing Demand for Short-Term Accommodations in Tokyo
Tokyo’s position as a global business and tourism hub drives steady demand for quality short-term and extended-stay accommodations. With Japan welcoming a record 36.9 million international visitors in 2024 and aiming for 60 million annually by 2030 under the Tourism Nation Promotion Basic Plan, the market for alternatives to traditional hotels is expanding rapidly. Business travelers, expatriates on assignment, and tourists seeking local experiences all contribute to this growing demand, supported by government efforts to boost tourism-related spending to ¥15 trillion.
The city’s efficient public transportation, safety record, and blend of traditional culture with cutting-edge innovation make it particularly attractive to international visitors willing to pay premium rates for well-located, thoughtfully designed accommodations. This creates an opportunity for property investors to capitalize on higher nightly rates compared to traditional long-term leasing arrangements.
Superior Investment Returns Through Short-Term Rentals
One of the most compelling reasons investors are turning to short-term rentals is the potential for significantly higher returns compared to traditional leasing models. Data from Ken’s Place demonstrates this difference clearly:
As illustrated, standard central Tokyo long-term leases typically generate yields of approximately 2.50%-3.00%, while Ken’s Place managed properties achieve substantially higher returns:
- Ken’s Place in Yotsuya: 4.80% yield
- Ken’s Place in Roppongi: 4.90% yield
- Ken’s Place premium locations in Yotsuya: 5.95% yield
This represents a potential increase in return of 60-98% compared to conventional leasing strategies, making short-term rentals an attractive option for yield-focused investors.
The Ken’s Place Business Model
Ken’s Place has developed a comprehensive approach to maximizing property returns through a refined short-term rental business model:
Property Transformation Strategy
The process begins with careful property selection in high-demand central Tokyo neighborhoods such as Roppongi, Azabujuban, Shibuya, Shinjuku, and Asakusa. The company targets properties with favorable zoning—ideally commercial—that permit short-term stays, while avoiding low-rise and mid-to-high-rise residential areas where such operations may be restricted
Once a suitable property is identified, Ken’s Place assists with professional property assessment and conversion planning. They handle strategic renovation to appeal to international guests, thoughtful interior design and furnishing, and implementation of necessary technology for guest communication and access. Investors also receive a detailed pro forma cashflow model, offering clear financial expectations. Additionally, they ensure compliance with fire safety and other regulatory requirements, as well as acquisition of required permits for short-stay operations.
Operational Excellence
The day-to-day management of short-term rental properties requires specialized expertise that differs significantly from traditional property management. Ken’s Place provides comprehensive operational services including professional marketing across multiple booking platforms and dynamic pricing strategies based on seasonal demand. They manage all guest screening and communication, coordinate cleaning and maintenance, offer 24/7 guest support, and provide regular performance reporting for investors.
By implementing cost-effective operations and maintaining high occupancy rates through a combination of daily and monthly rentals, Ken’s Place maximizes both gross revenue and net profit, translating to stronger returns for property owners.
Target Properties and Investment Requirements
Ken’s Place has clearly defined criteria for properties that perform optimally in the short-term rental market. They focus on whole buildings with selling prices over 400 million yen and properties with total rentable area exceeding 300 square meters. Ideal locations have appropriate zoning for short-term accommodation, situated in central Tokyo with excellent transportation access.
For investors who already own rental apartments, Ken’s Place offers conversion services to transform these assets into more profitable short-term rental operations. Investors looking to enter the market can benefit from Housing Japan’s property sourcing expertise to identify buildings with optimal short-term rental potential.
Regulatory Considerations
Japan’s regulatory environment for short-term accommodations has evolved significantly since the implementation of the Minpaku Law in 2018. Ken’s Place maintains thorough knowledge of these regulations and ensures all properties operate in full compliance with legal requirements. This includes proper registration with local authorities, adherence to maximum stay limits where applicable, implementation of required safety measures, maintenance of guest registration records, and payment of appropriate taxes.
This regulatory expertise provides investors with peace of mind, knowing their property investment remains compliant with all current legal requirements.
Investment Pathways with Ken’s Place
Ken’s Place offers multiple entry points for investors interested in Tokyo’s short-term rental market.
For Existing Property Owners
If you already own a rental apartment building in Tokyo, Ken’s Place can assess its potential for conversion to short-term accommodations. Their team will develop a comprehensive conversion plan, handle necessary renovations, and implement efficient management systems to boost profitability.
For New Investors
Housing Japan, the group company of Ken’s Place, provides full support for investors seeking to acquire suitable properties. Their comprehensive service includes property sourcing aligned with short-term rental requirements and thorough due diligence and acquisition assistance. They also facilitate introductions to financing options when needed. Ken’s place handle renovation planning and implementation, and manage the complete operational setup and ongoing management of the property.
For Land Developers
Investors with land assets can partner with Ken’s Place to develop purpose-built short-term rental properties that maximize return on investment. The company offers guidance on optimal building design, amenities, and operational considerations to ensure new developments meet market demands.
The Housing Japan Advantage
As a group company of Housing Japan, which has been delivering comprehensive real estate services since 2000, Ken’s Place benefits from extensive market knowledge and a proven track record in Tokyo’s property market. This experience informs their approach to short-term rental management, ensuring investments are positioned for long-term success.
Housing Japan’s expertise spans property brokerage, development, and investment management, providing Ken’s Place clients with access to a full spectrum of real estate services focused specifically on the central Tokyo market.
Looking Ahead: The Future of Short-Term Rentals in Tokyo
Tokyo’s appeal as a global destination continues to strengthen, with upcoming international events, ongoing infrastructure improvements, and the city’s reputation for innovation all contributing to growing visitor numbers. Government plans for 60 million visitors annually by 2030 under the Tourism Nation Promotion Basic Plan. As traditional hotels struggle to meet this demand, particularly in the mid to high-end segments, short-term rental properties are well-positioned to capture market share.
Additionally, changing work patterns with increased remote and flexible arrangements have created a new category of “bleisure” travelers who combine business and leisure trips, often seeking longer stays in comfortable, well-equipped accommodations. This trend further supports the short-term and extended-stay rental market in Tokyo.
Conclusion
Investing in Tokyo’s short-term rental market through Ken’s Place offers a compelling opportunity to achieve enhanced returns compared to traditional property investment strategies. With yields potentially reaching nearly 6% net yield in prime locations—More than double the return of standard long-term leases—this investment approach deserves serious consideration from yield-focused investors.
By leveraging Ken’s Place’s comprehensive planning, conversion, and management services, property owners can optimize their real estate assets for this growing market segment while benefiting from professional operational expertise. Whether you’re an existing property owner looking to boost returns, a new investor entering the Tokyo market, or a developer seeking the highest and best use for your land, Ken’s Place provides the specialized knowledge and services needed to succeed in Tokyo’s short-term rental sector.
Q&As
Q: What types of properties perform best as short-term rentals in Tokyo?
A: Properties in central locations near major transportation hubs, business districts, and tourist attractions typically perform best. Buildings that can accommodate multiple units under single ownership are particularly advantageous for operational efficiency.
Q: What legal requirements must be met to operate short-term rentals in Tokyo?
A: Properties must be registered under Japan’s Minpaku Law or obtain hotel/inn licenses depending on the operation type. Ken’s Place handles all regulatory compliance, including registration, safety requirements, and ongoing operational compliance.
Q: How hands-on does an investor need to be with a Ken’s Place managed property?
A: Ken’s Place offers comprehensive management services that allow for a largely passive investment experience. Regular performance reports keep investors informed while the day-to-day operations are fully managed by the Ken’s Place team.
Q: What makes Tokyo a stable market for short-term rental investments?
A: Tokyo is a stable market for short-term rental investments due to its year-round inbound travel, driven by business, tourism, and education. The city is not affected by seasonality, benefits from Japan’s stable political environment and strong property rights, and continues to attract global interest as a safe, high-demand destination.
Q: How does Ken’s Place increase property returns compared to traditional rentals?
A: Through a combination of higher nightly rates, efficient operational management, strategic marketing across multiple platforms, and a mix of daily and extended-stay monthly rentals to maximize occupancy throughout the year.
Q: What’s the difference between Minpaku, STR (Short-Term Rental), and MFA (Monthly Furnished Apartments) in Tokyo real estate?
A: Minpaku: This refers to private home lodging under Japan’s Minpaku Law. It’s typically for short stays (under 30 days) and requires registration. Most residential zones limit Minpaku operations to 180 days per year. STR (Short-Term Rental): A general term for stays under 30 days. In Tokyo, STRs are usually regulated under hotel laws or the Minpaku framework. they require a proper license, and zoning rules apply. MFA (Monthly Furnished Apartments): These are fully furnished units rented for 30 days or more. No hotel or Minpaku license is needed, making it a popular and legal way to offer furnished rentals without some of the short-stay restrictions.
