Homeowners in Japan sometimes stop living in a house they bought — a corporate transfer, a parent’s care needs, or a long posting abroad can empty a home overnight. Rather than let the house sit vacant, the standard move for a Japanese owner is to rent it out and turn it into income property. This guide walks through the process of renting out a home you no longer live in, the paperwork it requires, and how to choose a property management company.
What Is the Process for Renting Out a Home You No Longer Live In?
Consulting a Real Estate Management Company
The first step is consulting a real estate management company (fudōsan kanri gaisha, 不動産管理会社) and telling them your conditions and preferences. A one-stop comparison service, covering everything from small neighborhood firms to national chains, is the efficient way to start. This matters more in Japan than in Western markets where landlords often self-manage: screening, paperwork, and disputes here run on local conventions a relocated owner may not know.
Preparing the Required Documents and Setting Conditions
The basic documents you will need are as follows.
- The house’s floor plan, the land registry certificate (土地登記簿謄本), and the building registry certificate (建物登記簿謄本)
- Personal identification, your registered seal (inkan, 印鑑), and the keys to the house
The conditions to set are the rent, a management fee, a lease-renewal fee (kōshinryō, 更新料), a security deposit (shikikin, 敷金), key money (reikin, 礼金), and whether fire insurance is required. Reikin and kōshinryō have no real Western equivalent: unlike a US or UK deposit that is simply refunded, reikin is a one-time, non-refundable payment at move-in, and kōshinryō — often one month’s rent — is paid again at every renewal, typically every two years. Decide these figures with your management company, benchmarked to local market rates.
Tenant Recruitment, Screening, and Signing the Lease
The management company advertises the property through portal sites and flyers; once an applicant is screened, both sides sign the lease. The landlord makes the actual decision on each applicant, and the company simply relays it — the owner keeps final say on who moves in.
How Is the Property Managed While It Is Rented Out?
Signing the lease is only the beginning: running a rental property in Japan generates ongoing work for as long as it is tenanted, mainly in three areas.
Managing Move-Ins, Move-Outs, and Tenant Disputes
Rent arrears, complaints, and disputes require specialized knowledge, so outsourcing this to a management company is usually the sensible choice. For an owner who has relocated — within Japan or overseas — this is often the single biggest reason to use one at all: chasing a late payment from abroad is far harder than delegating it to a local professional who already knows the tenant-protection rules.
Property Upkeep: Cleaning, Repairs, and Facility Maintenance
This, too, can be outsourced, but issues involving the equipment itself, or disputes with neighbors, are sometimes cases where the landlord is expected to step in directly. Outsourcing reduces the workload; it does not remove the owner from the picture entirely, especially on matters touching neighborhood relations.
Tax Filing and Tax Management
Rental income must be declared as real estate income (fudōsan shotoku, 不動産所得) in your annual tax return (kakutei shinkoku, 確定申告). It helps to use a management company that employs a Certified Rental Property Management Specialist (chintai fudōsan keiei kanrishi, 賃貸不動産経営管理士) — a Japanese qualification for rental-housing professionals, roughly comparable to a licensed property manager elsewhere, though its scope reaches further into statutory tenant-protection compliance.
What Should You Look For When Choosing a Management Company?
Service scope, fees, and commissions differ by company. Check the following before committing to one.
- Rent guarantee service: guarantees a set rental income even if the tenant falls into arrears
- Maintenance-free service: subsidizes repair or replacement of building equipment
- The typical management commission (generally 5–10% of the rent) — comparable to what self-managing landlords elsewhere pay a property manager, so not unusually high by international standards
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Frequently Asked Questions (FAQ)
Can I rent out a house that still has a mortgage on it?
As a rule, if you have an owner-occupier mortgage (jūtaku rōn, 住宅ローン — priced for a resident-borrower at a lower rate than an investment loan), renting the property out requires your lender’s approval first. Renting it out without permission can breach the loan agreement, a stricter rule than in countries where converting a primary residence into a rental raises fewer contractual issues. Lenders will often approve the change when the reason is temporary, such as a transfer.
Which is better: a fixed-term lease or a standard lease?
If you plan to move back eventually, a fixed-term lease (teishaku shakuya keiyaku, 定期借家契約 — ends definitively at expiration, with no automatic renewal) is the safer choice. A standard lease (futsū shakuya keiyaku, 普通借家契約) renews indefinitely but carries strong statutory tenant protections, making it hard for an owner to reclaim the property simply because they want it back — a tilt toward tenant protection considerably stronger than under most Western tenancy law, and the reason the fixed-term option exists as a separate category.
How much does the management commission cost?
Generally 5–10% of the monthly rent; a wider service scope costs more. Weigh that against the effort of self-management, especially if you cannot easily handle issues on-site.
What happens if I just leave the house vacant?
Fixed asset tax (kotei shisan zei, 固定資産税) and city planning tax (toshi keikaku zei, 都市計画税) keep accruing regardless, and the building deteriorates further. If it is designated a “Specified Vacant House” (tokutei akiya, 特定空き家 — a category under Japan’s vacant-house law for properties judged unsafe or harmful to the neighborhood), it can lose its residential land tax reduction, sometimes sharply raising the tax bill. Putting the property to use sooner matters for preserving its value, whether the owner has relocated overseas or just across town.
