The rental market and its regulations in Kyoto
Once you have purchased your property through Heritage Homes it’s time to decide if and how you wish to make it generate an income.
The most common ways are:
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- Full Guesthouse License: as any search on Airbnb will tell you, there are many Machiyas for rent in Kyoto, in all price segments and in all areas. This type of rental is a complicated option, as it requires permits and is often frowned upon by both city officials and local residents. It can also be hard work dealing with agents and wear and tear. It can also be very lucrative if done right. In order to qualify for a 365-day-a-year Machiya guesthouse license allowing you nightly rentals, the property cannot be situated in an alleyway or cul-de-sac, it has to be built before 1950, cannot substantially exceed the official registered size, amongst other regulations. Certain parts of Kyoto, mainly in the historical parts of Higashiyama, have also banned any new guesthouse licenses being issued. HHJ works with experienced solicitors who can assist you. Please note that even if a property has a guesthouse license, a new license must be applied for when a property is sold/bought. NEWSFLASH: The Kyoto City council has just announced that it’s becoming harder to obtain a full guesthouse license. The new rule states that the Machiya must be restored to its original size that it was when it was first registered. In other words, if the property was registered as having a floor space of 80 sqm, but over the years the house has been added to (which is very common) and it’s now 100 sqm, you have to demolish the additional 20 sqm in order to qualify for a full guesthouse license.
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- Partial Guesthouse license (Minpaku) and Monthly Rentals: An easier license to obtain is called a Minpaku license. This allows you up to 180 daily rental nights with some restrictions for Sakura week etc. The rest of the time you can rent out monthly or longer, which does not require any license at all. The market here is interesting and growing. Many people, not least Japanese and foreign retirees, want to visit Kyoto for an extended stay. For this market, renting a Kyoto Machiya makes a lot of sense, not least culturally, as staying in a Machiya is very much part of the Kyoto experience. This is also an excellent choice for business travellers who are here for extended periods and who don’t want to live in serviced apartments.
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- Long-term rental to overseas students, faculty, researchers and expat professionals: Tens of thousands of graduate students, faculty, researchers and ex-pats on secondment come to the Kansai region every year, and many want to live in Kyoto, creating a large market for everything to small Machiyas near the universities to larger family sized homes more centrally. These are usually rented out half-yearly or yearly, furnished.
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- Long-term rental to the Japanese market: Japan has a highly mobile workforce and in many sectors, senior executives are relocated every 3-4 years, a system which is found only in Japan. This has created a huge rental market in the middle to the upper sector of the market. These properties are traditionally rented unfurnished.
Talk to us at Heritage Homes, and we will help you to find the best solution to create a healthy return on your investment in Kyoto.
