3 Aspects to Consider when Buying a Studio Apartment in Japan

Finding the right one-room studio apartment in Japan can be a challenge. But with the right professional information, you will know the important questions to ask.

With space at a premium in the urban centers, studio apartments in Japan are quite small compared to other countries. However, the demand for these apartments may increase in the near future. According to Mizuho Bank, by 2030 one-fourth of all men in their fifties will be living alone.*1 Combine this with the rapidly aging population and decreasing marriage rates, and it is clear to see that the need for small apartment units will stay strong.

At the same time, thanks to their low prices and high availability, studios can provide a sound investment. Additionally, their modest prices do not exclude first-time investors. Paying attention to the following three aspects can help make sure you are asking yourself the right questions before you buy to ensure that your apartment is rented out as much as possible.

 

Japanese Studio Apartments

 

Studios appeal to the masses due to their small size and the specific traits of the Japanese market. There are three different terms that all refer to “studio apartments.”

One-Room (1R)

An open room with no division (door) between the living and kitchen area.

1K

Like a 1R, the 1K has a divider between the living and kitchen areas. The “kitchen” is often quite modest. Depending on the area, rent prices can average higher or lower than 1R.

1DK

1 bedroom apartment with a larger dining-kitchen (generally 15 - 26 square meters). These are more comparable to “studios” in other countries and have higher rent prices.

 

3 Aspects to Consider when Purchasing

 

1 Location

Distance from the station is a favorite search criterion for most apartment hunters. For this reason, it is one of the standard functions on property portals. Rent (and purchase) prices decrease with distance from the nearest train station, since this represents a longer commute for tenants. Generally speaking, an "acceptable" distance is within 5 to 10 minutes of the station. If the walk exceeds 10 minutes, many people will opt for something closer.

Real estate listings almost always have the distance from the station listed on them. The rule here is 80 meters = 1 minute. But, it is important to check the calculation. Check the commute root to the station via online maps, such as Google Maps (walking time), to make sure that the numbers match up.

The only way to really confirm the distance to surrounding train stations is to inspect the actual property yourself. That’s not always an option for everyone and every single property, though. So, using Google Street View, you can even check the neighborhood without coming to Japan. You can also make sure that tenants will not walk through "rough" neighborhoods to get to the nearest station.

2 Size and Layout

Since Japanese apartments tend to be smaller than other countries, it’s difficult to guess how much space will appeal to tenants. The Ministry of Health, Labour and Welfare recommends 25 square meters for singles and 30 for two occupants.*2 This may sound like a shoebox in your own country, but it is almost standard in Japan. If your apartment falls under 18 square meters, though, you might have trouble finding new tenants.

Distribution of the size also plays a role in attracting occupants. Square apartments make it easier to place and organize furniture. Long, skinny apartments are also available at cheaper prices. However, these are less popular among tenants. Finally, the layouts of some apartments are irregular shapes (such as triangles or pentagons). You should be aware that these apartments pose a problem for organizing furniture in the room or have essential components in unexpected places. In extreme cases, the shower might even be in the kitchen!

Other features of the layout are separate bathroom and toilet as well as an indoor washing machine stand. Apart from appealing to more tenants, properties with these features can also mean several thousand yen in increased rent for you.

3 Rent Prices

For most tenants, it is important to stay in their budget. So, they pay more attention to the total monthly rent than per square meter. Therefore, it is important to keep the rent and costs of the apartment you buy in balance with others in the area. Rents for 1R apartments can even exceed 1Ks in some wards of Tokyo.

Older second-hand apartments may seem like a cheap buy at first. But upon closer inspection, you will see that they require increased management costs or could be due for a large-scale renovation. These will quickly add up and reduce the profitability of your investment.

Finally, if you are buying new, you can charge a premium on the first rental contract. After that, the apartment will be “used,” and  you will have to adjust the rent to the the market. As a leader in the rental market, HOME'S offers a wide variety of information on rental properties. You can use tools, such as the Price Map and Market Price Average (Japanese only), to check the market prices for different areas.

 

Conclusion

 

Despite their small size, there are still a number of important aspects associated with compact apartments in Japan. When investing in property abroad, it is vital to understand the needs of tenants in that country. Popular traits in your own country may not ring with Japanese tenants and could leave your apartment vacant for months or years on end. With this in mind, it can be risky to choose properties based on your own preferences or common features in your home country.

Take a look at our selection of various properties around Japan.

Interested in more information? Feel free to contact us today or meet us in person at our next international event!

Sources
*1 Mizuho Bank. https://www.mizuho-ir.co.jp/publication/contribution/2011/gendainoriron1101_01.htm
*2 Ministry of Health, Labour and Welfare. http://www.mhlw.go.jp/stf/shingi/2r98520000012t0i-att/2r98520000012t75.pdf