Due to population decline and an aging society, vacancy rates are rising in rental properties across Japan. If a unit remains vacant despite continued tenant recruitment efforts, it may be worth shifting your perspective and exploring non-rental uses for the vacant space. This article covers the reasons vacancies persist long-term and introduces 11 recommended ideas for making use of empty units.
Why Do Apartments and Condominiums Stay Vacant for Long Periods?
Before addressing vacancies, it is important to accurately identify the underlying causes.
Location Issues
Factors such as distance from the nearest station or poor neighborhood safety are difficult to improve, making it necessary to find strengths in other areas.
Inappropriate Rent Pricing
Rent set above the local market rate is a common cause of vacancies. In particular, older properties priced at rates comparable to new builds should be reviewed.
Insufficient Coordination with Leasing Agents
Leasing agents handle a large number of properties and do not necessarily prioritize any single listing. It is important to establish effective ways to collaborate with them.
Lack of Competitiveness
If a property's equipment or interior falls short of competing units in the area, prospective tenants are less likely to choose it.
Issues with Listing Methods
Problems such as low-quality property photos or insufficient listing information are also frequently observed.
11 Ideas for Using Vacant Units Beyond Traditional Rental
Here are some ways to generate revenue from vacant units when tenants cannot be found.
1. Rental Space
This involves renting out the unit on an hourly basis. There is demand for various uses such as meeting rooms, party venues, and photo studios.
2. Trunk Room / Storage Space
The unit can be leased as a storage facility. Demand for storage space is high in urban areas, making this a source of stable income.
3. Shared Office / Co-working Space
With the spread of remote work, demand for shared offices is on the rise. Setting up desks and a reliable internet connection enables this use.
4. Short-Term Rental (Minpaku / Residential Lodging Business)
For properties near tourist attractions or business districts, operating as a short-term rental is an option. Registration under the Residential Lodging Business Act is required.
5. Tutoring School / Activity Classroom
Depending on local educational needs, the space can be rented out for tutoring schools, piano lessons, English conversation classes, and similar uses.
6. Satellite Office
Leasing the space to a company as a satellite office under a corporate contract can provide stable long-term income.
7. Welfare / Care Facility
The unit can be rented to welfare service providers for uses such as adult day care or group homes for the elderly. Demand is growing due to the aging population.
8. Atelier / Workshop
The space can be utilized as a working area for artists and creators.
9. Pet-Related Facility
The unit can be rented to pet-related businesses such as pet hotels or grooming salons.
10. Model Room
Furnishing the vacant unit as a model room enhances its appeal during property viewings. This helps prospective tenants visualize living in the space, which is expected to improve the contract rate.
11. Community Space
Offering the space as a local gathering place or event venue can simultaneously raise the property's profile and contribute to the community.
Key Considerations When Utilizing Vacant Units
When using vacant units for purposes other than standard rental, the following points require attention.
- Confirming regulations related to change of use (Building Standards Act, Fire Service Act, etc.)
- Impact on existing tenants (noise, increased foot traffic, etc.)
- Reviewing the management association's bylaws (in the case of condominiums)
- Reviewing insurance coverage (confirming policy terms following a change of use)
Frequently Asked Questions (FAQ)
Q. How much revenue can I expect from renting out a space on an hourly basis?
While it depends on location and use, an hourly rate of approximately 1,000 to 5,000 yen can yield monthly income of several tens of thousands of yen in some cases.
Q. What procedures are required to operate as a short-term rental?
Registration under the Residential Lodging Business Act is required. Note that there is an annual operating limit of 180 days, and local municipal ordinances may impose additional restrictions.
Q. Is it easy to convert a unit into a trunk room?
Conversion is possible at a relatively low cost, though change-of-use procedures under the Building Standards Act may be required in some cases.
