How to operate airbnb business in Japan legally

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In the case you want to operate airbnb business ( Minpaku ) in Japan, you need to know about law relating to hotel business.
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( You can find information of new Minpaku law = 民泊新法 = みんぱくしんぽう )
Assumed that you purchase an apartment of 8 million yen in Tokyo and rent it out to foreign tourists with rent of 5000 yen per a day per a person.

When you own an apartment, you need to pay Apartment management fee and reserve fund for repair and it may be 10,000 yen per a month.

Assumed that occupancy rate of your apartment is 50% and always 2 persons use your apartment at the same time.

In this case, yield rate will be 21 %
( 5000 yen × 2 persons × 15 days  – 10000 yen ) × 12 months / 8 million yen = 0.21.

So, you may want to operate this kind of business in Japan and some persons are operating this business through airbnb.

But, now they are inflicting public order and most of them are illegal.

In Japan, if you accommodate a person ( guest ) and receive fee ( Even if you receive the fee in the name of other expense  ), you need to obtain hotel license.

And in the case of single apartment, you cannot obtain this license.
( If you purchase whole building, you may be able to obtain hotel license, though. )
Because, you need to prepare wide room area, enough sanitary facility, enough lavatory ( at least 2 lavatories for each room  ) etc.

But, on the other hand, Japanese government wants to increase the number of foreign tourists.

Thus, they have designated Ota ward ( Haneda air port is located in this ward. ) as special ward to contribute this demand.

Now, there are a lot of foreign tourist but, the number of hotels to accept such tourists are not enough. And even if there are hotels, hotel fee is more expensive than other country.

If foreign tourists can find affordable hotel or inn, the number of foreign tourists will increase.
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So, if you rents out your apartment to foreign tourists at reasonable fee, you can find renters ( tourists ) and can get some profit with low management cost.
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So, through some companies like airbnb, you register  your apartment as inn and receive fee from guest.

So, some persons operates their hotel business without permit. And it is illegal.
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They may be sentenced to within 3 years in prison or fine of not more than 30,000 yen.

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You can not select one of it by yourself.
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Japanese government has designated Ota ward as special ward.
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When you operate hotel business in Ota ward, standard to operate hotel business is eased.

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But, unfortunately, even after this designation, procedure to obtain this authorization is not easy.

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For example, duration of stay of guest should be MORE THAN 3 DAYS, 2 NIGHTS.

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And I do not think you can find such guests easily.
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And room area should be more than 25 ㎡ for guest room.
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So, even if you have small apartment of 20 ㎡ 、you cannot operate hotel business legally.

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And in the case you have an residential apartment, there is an apartment ordinance.
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And it should stipulate that you cannot operate business in your apartment.
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Because, purchase of your apartment is residence.

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In January 27th, 2016, Osaka court house issued provisional injunction to order owner of apartment to cease operation of Minpaku ( illegal hotel business ).

This is the first time that court house issues such injunction.

A person who owns apartments has operated hotel business without getting permit from government.

There are over 100 rooms in whole building and a person owns at least 2 apartments there.

A person in apartment association noticed that the number of foreign tourists who entered his rooms increased and asked the owner the reason.

However, the owner did not provided reasonable reply.

Then, apartment association filed provisional injunction to order the owner to cease the usage of his apartments and court house approved their petition.

In their apartment rule, it is stipulated that owner needs to use his apartment for residential purpose.

And articles 6, paragraph (1) of Act on building unit ownership stipulates that Unit owners shall not engage in any conduct that is harmful to the preservation of the building or any other conduct that is contrary to the common benefit of the unit owners with regard to the management or use of the building.

And in Article 57 It is stipulated that all of the other unit owners or the incorporated management association may  for the common benefit of the unit owners, demand him  discontinue such conduct.

Moreover, in Article 58 In the case he ( = the unit owner ) does not accept demand from other unit owners or incorporated management association, they can file petition that his unit should be auctioned.

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Even if Japanese government does not take quick action to come down hard on illegal hotel business, other unit owners may take necessary action without delay.

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Because, operation of illegal hotel business in residential apartment may conflict other owner’s interest.

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So, if you want to operate hotel business legally, you need to purchase detached house.
how to operate airbnb business in Japan pic detached house pic
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This house should have enough acreage.

In the case of detached house ( Kodate = 戸建 ), there is not a apartment ordinance.
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So, you can operate hotel business without problem.
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Though, there are a lot of standards to satisfy, if you order me, I can find suitable detached house and assist you to obtain hotel license.

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At the moment, it is not easy to operate airbnb business with standard of Ota ward.

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So, if you are a serious business person and have intention to abide by law, you need to obtain hotel license.

In next page, I will explain how to obtain hotel license in Japan.

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