Not everybody purchases property in Japan for personal residential purposes. Many see buying property in Tokyo a good investment, since the number of households and populations are constantly increasing in Tokyo, and they can sell the property when they feel that they need cash in a hand.
Even if you don’t need to make immediate profit and you would like to keep the property with yourself, but neither plan to live in it nor use it as an office, renting it out is a good option.
Renting it out generates monthly income for you. It keeps your property occupied and well-maintained while you are away in another country. Even if you have moved to Japan and if you have multiple properties, it is better to rent out a property that you’re not using regularly.
Below, we explain how you can rent out your investment property in Japan.
Calculate the rent value of the property
Different areas in Japan have different rent value. Some factors that need to be taken into consideration are:
- The location of the property – whether it is in a big city or a small town or village.
- Availability of public transport – if Metro stations and the airport are nearby, the rent is usually higher. (Yamanote line is one of the major JR Line)
- Local infrastructure – if the area where your property is situated is known for better infrastructure with good schools, public parks, entertainment and cultural centers and hospitals, people will be ready to pay a higher rent. Especially for good public schools, your house needs to be in a certain area in order for you to send your kids to the school.
- The condition and the age of the property – if the property is well maintained and it has been recently developed, it will have a higher rate of rent compared to a property that is not properly maintained and is old.
*from Tokyo metro website
Collaborating with a good property management company
When you have purchased the property in Japan and you are personally unable to take care of the property, it is better to collaborate with a property management company, especially when you plan to rent out your property.
There are multiple benefits of working with a property management company. As mentioned above, in your absence, the property management company can take care of your property and keep it prim and proper and in great working condition. This way, when suitable tenants visit your property for evaluation, they will find it attractive, comfortable and well maintained, and hence, they will be more prone to accepting your offer.
A property management company is also a better negotiator. Since getting you a good rent is also in their interest, they will find you the best possible offer.
Using a rent-guarantor company
Managing your investment property personally in Japan may be very difficult for you, especially if you live in another country. In such a situation, it is always better to work with a property management company and a rent guarantor company too.
Collecting your rent can be a big problem every month if you cannot visit your investment property in Japan, in case the rent is not paid on time. Either a lessee pays rent or not, you can receive a rent every end of month. Moreover, a lessee will pay for guarantor’s fee. Having a contract with a guarantor company will save you from the trouble of repeatedly visiting your property and collecting the rent.
Some property management services also offer a “rental guarantee plan” also called a “sub-lease plan”. This way, the management service guarantees a certain monthly rent whether a tenant is living in the property or not. It is the responsibility of the property management service to get the tenants and then get the rent from the tenants. The benefit is, you get your rent every month and you don’t need to worry about finding new tenants when the old tenants leave.
On the other hand, when you decide to sell your property, the yield might be lower than a regular investment property.
Marketing and advertising your rental property
To be able to rent your investment property in Japan, as you must do everywhere else in the world, you will need to advertise your offer. Your prospective tenants need to know that you want to rent out your property.
You can either place the advertisement on your own or you can let your property management company advertise. There are some dedicated publications that carry out property rental advertisements. There are also many niche websites where you can advertise your rental property.
Although, most of the people living in Japan know Japanese, it is better that you place the advertisements both in Japanese and English. This way, both Japanese and non-Japanese potential tenants/lessees will be able to see your advertisement and respond.
And more importantly, since not many property owners advertise in English, there is more chances for you to attract international students/family from overseas/people who just arrived in Japan.