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Free Online ConsultationUnderstanding the Basics of the 180-Day Rule and Monthly Rental Operations
One challenge that’s unavoidable when running a minpaku business is the 180-day annual operating limit set by the Private Lodging Business Act (the “minpaku law”). To generate revenue beyond this cap, many operators are turning to monthly rental arrangements for the remaining period. However, since minpaku and monthly rentals require very different operational know-how, a key question for many owners is whether a management company can handle both seamlessly.
Under the minpaku law, registered residences are limited to 180 days of lodging operations per year (calculated from April 1). This means that for the remaining roughly 185 days, the property cannot legally be used for minpaku business. How you utilize this “blank period” has a major impact on your property’s overall profitability. Without a plan in place, you’re essentially left covering about half a year’s worth of rent and management fees out of pocket—turning into a straight loss.
This is where switching to monthly rental (short-term lease) operations after using up your 180 days becomes a compelling option. Monthly rentals aren’t subject to the Hotel Business Act and don’t count toward the minpaku 180-day limit. However, since this arrangement is based on a lease agreement, it requires different contracts, tenant screening, and move-out procedures than minpaku. By skillfully combining these two operating models, you can maximize occupancy and revenue throughout the year.
Why Monthly Rental Operations After the 180-Day Limit Matter
Revenue Loss from the 180-Day Restriction
Let’s say you’re running a minpaku in a one-room apartment in an urban area, with an average nightly rate of ¥8,000 and a 70% occupancy rate. Over 180 days, you’d earn approximately ¥1 million in revenue. But if the remaining 185 days sit empty with no plan in place, and your monthly rent is ¥100,000, you’d be out roughly ¥600,000 in fixed costs alone. Far from simply reducing your annual take-home profit, this can push some properties into the red entirely.
By operating as a monthly rental instead, you can earn roughly ¥120,000–¥180,000 per month in rental income. If you can fill the 185-day gap (about 6 months) with monthly tenants, that translates to an additional ¥720,000–¥1,080,000 in revenue. This difference has a decisive impact on your annual return-on-investment plan.
The Legal Standing of Monthly Rentals
Monthly rentals are typically structured as fixed-term lease agreements of one month or longer. Since they fall outside the scope of the Hotel Business Act and the Private Lodging Business Act, they don’t count toward the 180-day operating limit—the single biggest advantage for minpaku owners.
That said, fixed-term lease agreements are governed by the Act on Land and Building Leases, which comes with its own legal requirements—such as the obligation to provide written contracts and give advance explanations—that differ from minpaku rules. For instance, if the required written pre-explanation isn’t properly given for a fixed-term lease, the contract may be legally reinterpreted as a standard (non-fixed-term) lease, making it difficult to require the tenant to move out. Since preparations for this contract need to be in place before your 180 days of minpaku operation run out, careful schedule management is essential.
The Benefits of Entrusting Monthly Rental Operations to a Management Company
Centralized Management of the Switch Between Minpaku and Monthly Rental
Switching from minpaku to monthly rental involves far more than just closing your booking site listings and opening up monthly rental listings. It requires dozens of detailed tasks: removing minpaku-specific consumables and amenities, adding household items needed for daily living, reviewing Wi-Fi and utility contract arrangements, and updating cleaning standards, among others. Entrusting this process to a management company allows all these transition tasks to be handled as a one-stop service, dramatically reducing the owner’s workload.
This is especially valuable for owners managing multiple properties, since each property will use up its 180 days at a different pace, causing the switchover timing to be staggered across properties. Managing every property’s transition on your own simply isn’t realistic—leveraging a management company’s systems is the more practical choice.
Securing Marketing Channels
Attracting monthly rental tenants can’t be accomplished through Airbnb or Booking.com alone, the way minpaku bookings can. It requires entirely different channels—listing on monthly-rental-specific portal sites (like Monthly’s or NOW ROOM), pursuing corporate contracts, and partnering with real estate agencies.
Some management companies already have these monthly-rental marketing channels established. Considering the effort of registering with portal sites from scratch, taking photos, and writing property descriptions yourself, there’s real value in outsourcing to a company with an existing network. In particular, whether or not you can capture corporate demand (business trips, training programs, temporary housing during relocations) makes a huge difference to your occupancy rate during the monthly rental period.
Reduced Burden of Tenant Screening and Trouble Response
Because monthly rentals involve a contractual relationship with tenants lasting a month or more, there’s a greater risk of problems dragging on longer than they would in minpaku. You need systems in place to handle rental-specific issues like unpaid rent, noise complaints, and property damage. Management companies typically have established screening criteria and know-how for working with guarantor companies, allowing them to screen out high-risk tenants before they move in.
For example, a management company can handle identity verification, employment and income certification, and setting up emergency contacts—all on the owner’s behalf, eliminating the need for individual owner intervention. Should trouble arise, many management companies will provide first-response support and, if needed, even assist with legal procedures.
Points to Consider When Choosing a Management Company
Confirm They Handle Both Minpaku and Monthly Rentals
There are many minpaku management companies out there, but not all of them handle monthly rental operations. Companies that specialize solely in minpaku will often tell you “you’re on your own” once your 180 days are up. Before signing a contract, be sure to carefully confirm exactly what services they provide for monthly rental operations—marketing, contract drafting, tenant management, move-out inspections, cleaning arrangements, and so on.
Fee structures during the monthly rental period are another important thing to check. While minpaku management fees typically run around 20% of revenue, some companies charge 10–15% of monthly rent for monthly rental management, while others use a fixed-fee model. Make sure to calculate your total annual management fees under each model before making a decision.
Legal Review of Contracts
The single biggest risk in monthly rental operations is a flawed contract. As mentioned earlier, fixed-term lease agreements legally require a written pre-explanation. This explanatory document and the lease contract itself must be prepared and delivered separately—there are even court rulings that have invalidated a fixed-term lease as such because the two documents were combined into one.
When choosing a management company, confirm that they’re well-versed in preparing and managing fixed-term lease documentation. Specifically, ask to see their contract templates and check whether the pre-explanation document is provided as a separate sheet, whether the non-renewal clause is clearly stated, and whether the move-out restoration standards are clearly defined.
Strategies for Handling Vacancy Risk
The biggest concern with monthly rental operations is the risk of prolonged vacancy while waiting for a tenant. Unlike minpaku, where bookings come in night by night, monthly rentals require a commitment of a month or more, which can make matching tenants to properties a slower process.
Be sure to ask upfront what measures a management company takes to address this risk. For example: do they list on multiple portal sites simultaneously? Do they have a dedicated corporate sales team? Can they switch to weekly rentals if a monthly tenant can’t be found? Do they offer any kind of rent guarantee program? A company that can share concrete data on their average occupancy rate during monthly rental periods is generally more trustworthy.
Revenue Simulation: Minpaku vs. Minpaku + Monthly Rental
Operating with Minpaku Alone
Let’s use a 1LDK unit in an urban area as an example. With an average nightly rate of ¥10,000 and a 70% occupancy rate over 180 days, revenue comes to about ¥1.26 million. Subtracting management fees (20%, roughly ¥250,000), cleaning costs (¥3,500 per cleaning × 126 occupied days, roughly ¥440,000), and consumables and utilities, the take-home profit for the minpaku period comes to about ¥400,000–¥500,000.
If the remaining 185 days sit entirely vacant, at a monthly rent of ¥120,000 for roughly 6 months, you’re out ¥720,000—resulting in an annual net loss of ¥200,000–¥300,000. Depending on the property’s conditions, relying on minpaku alone for just 180 days carries a real risk of ending up in the red.
Operating with Minpaku Plus Monthly Rental
Now let’s consider the same property, switched over to monthly rental at ¥150,000/month after using up its 180 minpaku days. If it achieves an 80% occupancy rate across the 185-day period—equivalent to about 5 months of paid rent—that’s ¥750,000 in revenue for the monthly rental period. After deducting management fees (12%, roughly ¥90,000) and cleaning costs (only at move-in/move-out, roughly ¥20,000), you’re left with about ¥640,000 in take-home profit.
Combined with the roughly ¥450,000 in take-home profit from the minpaku period, your annual take-home profit comes to about ¥1.09 million. Vacancy losses are limited to just one month’s rent (¥120,000), resulting in a net annual profit of about ¥970,000. This simulation clearly shows that adding a monthly rental component can make a difference of over ¥1 million per year.
Keys to Successful Monthly Rental Management After Minpaku
Plan Your 180-Day Usage Strategically
When you use up your 180 minpaku days determines when you’ll need to switch to monthly rental. The core strategy for maximizing revenue is to concentrate minpaku operations during peak seasons (cherry blossom season, summer vacation, year-end and New Year holidays) and shift to monthly rentals during the off-season. A common pattern, for example, is to run minpaku from April through September (180 days) and switch to monthly rental from October through the following March.
That said, demand for monthly rentals varies by region. Areas with strong business demand can expect corporate usage even in fall and winter, while properties near tourist destinations may see weaker monthly rental demand during the winter months. It’s important to work with your management company to design a 180-day strategy tailored to your property’s specific location and characteristics.
Furnish the Property to Also Suit Monthly Rental Tenants
While minpaku guests tend to favor hotel-like, stylish interiors, monthly rental tenants prioritize practicality. Having appliances essential for a month-plus stay—a washing machine, microwave, rice cooker, vacuum cleaner, iron—can be the deciding factor in whether someone chooses to move in.
By planning for monthly rental needs from the start of your minpaku operation, you can minimize additional investment when it’s time to switch over. Practical additions include adequate storage space (a closet stocked with plenty of hangers and storage bins), a work desk, and a well-stocked kitchen (pots, pans, knives, cutting boards, a full set of dishware). In many cases, an additional investment of just ¥50,000–¥100,000 can significantly improve occupancy rates during the monthly rental period.
Talk to Stay Buddy Inc.
Managing monthly rentals after using up your 180 minpaku days is a critical factor in your property’s overall profitability. But handling both minpaku and monthly rental operations on your own—drafting contracts, securing marketing channels, managing move-ins and move-outs—takes far more effort than most owners expect.
At Stay Buddy Inc., a minpaku management specialist, we offer end-to-end support that goes beyond minpaku management alone, covering your monthly rental operations after your 180 days are used up as well. From developing a 180-day usage plan tailored to each property’s characteristics, to listing on monthly-rental portal sites, drafting fixed-term lease documentation, and handling everything from tenant screening to trouble response, we’ve built a system designed to minimize the workload for property owners.
If you’re not sure what to do once you’ve used up your 180 minpaku days, or you’re interested in monthly rental operations but don’t know where to start, please feel free to reach out to Stay Buddy Inc. We also offer free revenue simulations tailored to your property’s location and conditions.
Why not start with a consultation, and take the first step toward achieving stable, year-round income?
