How to Buy an AKIYA in Japan and Start a Vacation Rental: Visa Requirements, Costs, and Key Considerations
With the growing global interest in Japan’s AKIYA (abandoned house) properties, many are curious whether purchasing an AKIYA and starting a vacation rental business can help secure a Startup or Business Manager Visa. While it’s theoretically possible, this process is far from straightforward, involving significant financial and operational requirements.
Unsplash - photo taken by Cosmin Georgian
Can You Get a Visa by Buying an AKIYA?
Purchasing an AKIYA and operating a vacation rental (like a short-term rental or Airbnb) alone typically won’t qualify you for a Business Manager Visa. Japan has stringent visa requirements, and small-scale operations generally fall short of these standards.
For instance, buying an AKIYA for 5 million yen and spending 15 million yen on renovations to run a vacation rental business will not meet the visa's investment requirements. Therefore, obtaining a Startup Visa under these conditions is also unlikely.
Visa Eligibility for AKIYA-based Businesses
If you’re aiming to secure a Business Manager Visa or Startup Visa, you’ll need to meet specific criteria to increase your chances of success:
Investment Size: Be prepared to invest in a property worth around 70 million to 100 million yen. Insufficient investment often results in the business being deemed unsustainable.
Legitimate Property: The property should be available on the open market, not solely through government programs like AKIYA BANK. Properties listed on the open market typically have a faster transaction process. In contrast, properties through programs like AKIYA BANK may involve longer contract times and require Japanese language skills or the assistance of intermediaries to manage the process, making the contract itself more challenging.
Fluency in Japanese: You must handle negotiations, contracts, and legal processes in Japanese or hire someone who can.
Property Management: Ensure the region has a Residential Accommodation Management Company to handle daily operations.
Nightly Rental Rates: To ensure profitability, the property or region should support nightly rental rates of 20,000 to 30,000 yen or more.
The Financial and Operational Hurdles
For those serious about obtaining a visa and running a successful business, budgeting carefully and consulting with a real estate agent and other professionals is crucial. This will help you develop a business plan that meets visa requirements and can withstand Japan’s operational challenges.
Considerations Before Purchasing an AKIYA for Vacation Rentals
If you're unsure whether a specific AKIYA is suitable for a vacation rental, consult a real estate agent or business consultant. They can assess the property’s potential and determine whether local regulations allow for short-term rental businesses. For visa seekers, consultant fees are a necessary investment in creating a robust business plan aligned with visa requirements.
Costs of Converting an AKIYA Into a Vacation Rental
Converting an AKIYA into a vacation rental often involves significant renovation costs. While some might consider a DIY approach, operating a regulated vacation rental usually requires professional contractors for electrical and plumbing work. Renovations can range from a few million to tens of millions of yen, making thorough financial planning essential.
The Challenges of Running Vacation Rentals in Rural area
Rural areas in Japan have more established vacation rental markets. However, outside these regions, finding property management companies to handle daily operations, such as snow removal and winter maintenance, can be challenging.
Before purchasing an AKIYA in a rural area, ensure you have access to local contractors and services to manage the property, especially in snowy regions where additional costs for snow removal and heating be can significantly increase expenses.
Hybrid Management With Monthly Rentals and the 180-Day Rule
Japan’s 180-day rule limits how long a short-term rental can operate annually, leading many property owners to adopt a hybrid model that includes monthly rentals or obtain a hotel license. This rule restricts rental income potential.
A hybrid approach, including monthly rentals, provides more stable income. For instance, charging 50,000 yen per night, with fees reducing the profit to 25,000 yen, and assuming a 60% occupancy rate over 100 days, yields about 2.5 million yen in annual revenue. This amount may not cover operating costs, especially if nightly rates are high, which is often only achievable in high-demand areas like Niseko or Sapporo.
Key Takeaways for Success With an AKIYA-based Business
To succeed with an AKIYA-based business, careful planning is essential. Here’s what you need to prepare:
A substantial investment (around 70 million to 100 million yen).
A property available on the open real estate market.
Proficiency in Japanese or access to a consultant for legal negotiations.
A property management company to handle daily operations, especially if managing remotely.
A location with sufficient demand to support high nightly rental rates (20,000 yen or more).
Without meeting these financial and operational benchmarks, your chances of obtaining a visa or running a profitable business are significantly reduced. Proper planning, professional consultation, and adherence to necessary criteria are key to a successful AKIYA-based vacation rental business.
