How To Buy & Run An Airbnb In Japan

Osaka, Japan, with its vibrant culture, numerous attractions, and booming tourism industry, presents a lucrative opportunity for investing in Airbnb properties. For expats considering this venture, understanding the local market dynamics and the process of purchasing property in Japan is essential. This guide provides step-by-step instructions on how to buy an Airbnb in Osaka, leveraging information from the market performance and practical advice for expats.

Why Invest in Airbnbs in Osaka?

Osaka is home to several key attractions such as Osaka Castle, Universal Studios Japan (USJ), and Dotonbori, which draw millions of tourists annually. The city's robust short-term rental market offers high occupancy rates and attractive daily rates, making it an excellent investment choice. Popular residential areas like Chuo Ku, Nishinari Ku, and Naniwa Ku are prime locations due to their proximity to major attractions and amenities.

Step-by-Step Guide to Buying an Airbnb in Osaka

1. Research the Market

Before making any investment, it's crucial to research the Osaka Airbnb market. Utilize resources like AirDNA to understand submarket performance, revenue potential, occupancy rates, and average daily rates. Focus on top-performing submarkets such as:

• Chuo Ku: Revenue Potential: ¥4.8M, Occupancy Rate: 74%, Daily Rate: ¥19.8K
• Nishinari Ku: Revenue Potential: ¥3.6M, Occupancy Rate: 65%, Daily Rate: ¥17.8K
• Naniwa Ku: Revenue Potential: ¥3.9M, Occupancy Rate: 69%, Daily Rate: ¥18K

2. Understand the Legal Requirements

Foreigners can buy property in Japan without restrictions, but it’s essential to understand the legal requirements for short-term rentals. Ensure the property is in an area that permits Airbnb operations and complies with local regulations. The registration process for short-term rentals typically involves obtaining a license from the local government.

3. Set Your Budget

Determine your budget based on the current market prices and potential returns. Consider additional costs such as property taxes, maintenance, and management fees. The weak yen currently offers an advantage for foreign buyers, providing more value for your investment.

4. Find a Real Estate Agent

Engage a reputable real estate agent who understands the local market and can assist with the purchase process. Agencies like Housing Japan specialize in helping expats navigate the Japanese real estate market, ensuring a smooth transaction.

5. Property Search and Selection

Look for properties in high-demand areas close to major attractions. Popular residential areas include:

• Chuo Ku: Central location, close to Osaka Castle and Dotonbori.
• Nishinari Ku: Affordable options near Tsutenkaku Tower and Shinsekai.
• Naniwa Ku: Proximity to Namba and Shinsaibashi, ideal for tourists.

6. Conduct Due Diligence

Before finalizing the purchase, conduct thorough due diligence. Check the property's legal status, verify ownership, and inspect the condition. Ensure there are no legal issues or disputes associated with the property.

7. Secure Financing

If you require financing, Japanese banks offer mortgage options for foreigners, although the terms and conditions may vary. Having a steady income and a good credit history can improve your chances of securing a loan.

8. Purchase Process

Once you’ve selected a property, your real estate agent will help you navigate the purchase process, which includes:

• Signing a purchase agreement
• Paying a deposit (usually 10% of the purchase price)
• Finalizing the mortgage (if applicable)
• Completing the transaction with the final payment and property registration

9. Prepare the Property for Airbnb

To attract guests and ensure high occupancy rates, furnish your Airbnb with essential amenities such as:

• Free Wi-Fi: Crucial for all travelers.
• Free Bikes: Offer bicycles for guests to explore the city.
• Local Guidebooks: Provide information on nearby attractions and dining options.
• Fully Equipped Kitchen: Cater to guests who prefer to cook their meals.
• Laundry Facilities: Essential for long-term stays.
• Comfortable Bedding: Ensure high-quality mattresses and linens.
• 24/7 Check-In: Flexible check-in options to accommodate late arrivals.
• High Standards of Cleanliness: Maintain a clean and welcoming environment.

Conclusion

Investing in an Airbnb in Osaka can be a profitable venture, given the city’s thriving tourism industry and strong market performance. By following this guide and conducting thorough research, expats can successfully navigate the process of purchasing and managing an Airbnb property in Osaka. With strategic investments and attention to guest experience, you can maximize your returns and enjoy the benefits of the booming short-term rental market in Osaka.