If you're looking at guest house investments in Japan, you need to understand the three main permit types. Here's what actually matters.
The Three Permit Types
#1 Minpaku (Residential Short-Term Rental)
The basics: Up to 180 days of operation per year.
This is your entry-level permit. Works in residential zones, lower barriers to entry, but you're capped at half the year. Good for testing a market or if you're dealing with a property that can't get full hotel permits.
Exception: Osaka has special minpaku zones where you can operate 365 days without jumping through ryokan hoops.
#2 Ryokan (Ka-in-shiku Private Lodging)
The basics: 365 days operation, but on-site management only.
Full year-round operation, but you need someone physically there managing things. This means either you're there, or you're paying someone to be there consistently. Higher revenue potential, higher operational complexity.
#3 Ryokan (Full Hotel License)
The basics: 365 days operation, remote management totally fine.
This is the gold standard. Full year operation with no requirement for on-site presence. You can manage remotely, scale easier, but the licensing requirements are the most stringent.
Which One Should You Choose?
Starting out? Minpaku lets you test the waters with less complexity.
Want maximum revenue? Go for full Ryokan if you can handle the licensing requirements.
Planning to scale? Full Ryokan license gives you the most operational flexibility.
The Reality Check
Getting licensed isn't instant. Fire department inspections, bringing properties up to code, municipality applications - budget around ¥800,000 for setup costs unless you're buying new construction.
Important: Even with minpaku permits, you may face operator restrictions - as in, you personally might not be able to be the licensed operator depending on your residency status or local requirements. Your management company can handle this, but factor it into your planning.
Most operators charge 25-30% of gross revenue for management once you're operational. Factor that into your numbers from day one.
Bottom Line
Japan's guest house market is solid, but the permit type you choose affects everything - your operational costs, revenue potential, and how much hands-on involvement you need.
Pick based on your actual situation, not what sounds coolest on paper.
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Our team
Meet the founders.
Derek has been working in the Airbnb space for the past 10+ years and recently purchased a home in Japan. He is excited to bring this investment opportunity to others in the States & abroad.
Nick has a passion for adventure and has always dreamed of owning a property in Japan. His dreams finally came true when Derek brought him in on a deal of a lifetime in Hokkaido, Japan - one of Nick's favorite places on Earth.