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Minpaku (STR) vs Long-Term Rental
Minpaku (licensed short-term rental, the Japanese Airbnb regime) looks like the obvious yield play: nightly rates in central Tokyo dwarf monthly rents on paper. But there is a hard ceiling written into the law that most overseas buyers discover too late. The honest comparison is not 'which earns more per night' (minpaku, easily) but 'which earns more per year, after the cap, the costs, and the work.' This is an operating-business decision dressed up as a real estate one. Here is what actually separates them.
| Aspect | Minpaku / short-term | Long-term lease |
|---|---|---|
| The 180-night cap (read this first) | Minpaku: under the national minpaku law you can legally operate only 180 nights per year, full stop. Half the calendar your unit must sit empty (or shift to monthly lets). Tokyo ward ordinances often tighten it further with weekday or residential-zone bans. | Long-term: rented 365 nights a year, no operating cap. Boring, but it never has to go dark. |
| Gross revenue ceiling | Minpaku: high RevPAR (revenue per available night) on the nights you run, but with only ~180 sellable nights, peak-season nightly rates and strong occupancy are what make or break the year. The cap is the binding constraint, not demand. | Long-term: a flat, predictable monthly rent. Lower headline, but the full year counts and there is no empty half to cover. |
| Operating cost and effort | Minpaku: this is a hospitality business. Cleaning between guests, linens, dynamic pricing, guest comms, platform fees, licensing and compliance reporting. Margins after all of it are far thinner than the nightly rate suggests. | Long-term: near passive. One tenant, one contract, occasional repairs. The management fee is a fraction of minpaku's operating load. |
| Income stability | Minpaku: cyclical and exposed. Tourism shocks, seasonality, FX swings on inbound demand, and a regulatory environment that keeps tightening. High ceiling, shaky floor. | Long-term: a signed lease and Japan's strong tenant protections give you steady, bankable cash flow. Lower ceiling, solid floor. |
| Property and location fit | Minpaku: only works in tourist-pull locations with a building and zoning that actually permit it (many condo bylaws ban it outright). Wrong unit, and the model is dead on arrival. | Long-term: works almost anywhere with normal residential demand. Far fewer constraints on what and where you buy. |
The verdict
Pick minpaku only if you have a genuinely tourist-pull location, a building that legally permits short-term operation, and either an appetite to run a hands-on hospitality business or the budget to pay a management company that does. Done right on the correct asset, the best ~180 nights can out-earn a full year of long-term rent, but the cap means it is a thinner, more fragile edge than the nightly rates imply, and one ordinance change can erase it. For everyone else, those wanting passive, predictable, defensible cash flow, or who cannot clear the zoning and licensing hurdles, long-term renting wins. Underwrite minpaku on 180 nights and realistic occupancy, never on a full calendar; if it only pencils at 365, it does not pencil.