Profit Benchmarks for Whole-House Minpaku: Osaka 2-Story, 100㎡ Property Under the 180-Day Rule
With Expo 2025 Osaka, Kansai on the horizon, Osaka’s accommodation market is drawing intense attention both domestically and internationally. Among the various property types, “whole-house minpaku” stands out for its enduring popularity with families and group travelers, along with its strong revenue potential.
However, Osaka City has its own unique regulatory ordinances layered on top of national law, making the question “How much profit can I actually expect?” one of the most critical considerations when evaluating this business.
We frequently hear a very specific question: what’s the profit outlook under these exact conditions—**”operating a 2-story, roughly 100㎡ whole house within Osaka City,” “under the 180-day annual cap set by the Private Lodging Business Act”**?
Let’s start with the bottom line of this article.
Under the conditions above, when operations are run successfully, the annual pre-tax profit (cash flow) can be estimated at roughly ¥500,000 to ¥2.5 million.
That said, this figure represents a benchmark for ideal operating conditions only, and you need to understand that it can vary significantly depending on the property’s location and condition—and above all, the impact of **Osaka City’s unique “supplementary ordinances.”**
In this article, we’ll walk through the details of the revenue simulation behind this profit benchmark, and offer professional insight into how to maximize profit within the constraints of the 180-day limit.
[Most Important] The Reality of Osaka City’s “180-Day Rule”: Understanding the Supplementary Ordinance Barrier
Before diving into the simulation, it’s essential to accurately understand the real-world implications of the “180-day rule” in Osaka City.
- National rule: Under the Private Lodging Business Act (the “New Minpaku Law”), the maximum number of days a property may be used for paid lodging services annually is capped at 180.
- Osaka City’s own rule: “Supplementary Ordinance” — In addition to national regulations, Osaka City has enacted its own stricter ordinance. Notably, in **”areas within 100m of school premises,”** lodging operations are prohibited on so-called “weekdays”—from noon Monday to noon Friday. (*Note: conditions such as applicability limited to residential-exclusive zones may apply. Always check the latest ordinance details.)
- Impact on the simulation: If your property falls within an area subject to this ordinance, you would effectively only be able to operate on weekends, holidays, and extended vacation periods. This means fully utilizing the national 180-day cap could become extremely difficult, significantly affecting revenue projections. The simulation in this article assumes a property located outside areas subject to this supplementary ordinance.
Three Steps to Calculating Profit Benchmarks
We’ll calculate profit using the following three-step process.
- STEP 1: Revenue Forecast → Set the average daily rate (ADR) and average occupancy rate (OCC) to calculate annual revenue.
- STEP 2: Expense Calculation → Calculate all operating expenses (variable and fixed costs).
- STEP 3: Profit Calculation → Subtract annual expenses from annual revenue to determine annual pre-tax profit.
[Simulation] Osaka City, 100㎡, 2-Story, Under the 180-Day Rule
STEP 1: Revenue Forecast
Setting the Average Daily Rate (ADR)
- Rationale: A 100㎡ whole house in Osaka City (roughly a 3LDK to 4LDK layout, accommodating 8–10 guests) commands strong demand from families and group travelers, allowing for relatively premium pricing. Competitive research shows rates starting around ¥25,000 on weekdays, ¥40,000+ on weekends and pre-holiday nights, and ¥60,000+ during peak periods (Golden Week, Obon, New Year’s, etc.). Averaged across the year, an ADR in the range of ¥35,000–¥45,000 is realistic. Here, we’ll use the midpoint of ¥40,000.
Setting the Average Occupancy Rate (OCC)
- Rationale: To maximize revenue within the 180-day cap, the basic strategy is to aim for high occupancy concentrated on higher-rate weekends and peak seasons. Here, we’ll assume that 80% of the permitted 180 days are booked. (The effective annual occupancy rate works out to 180 days × 80% ÷ 365 days ≈ 39.5%.)
- Annual occupied nights: 180 days × 80% = 144 nights
Annual Revenue Forecast
- Calculation: ADR ¥40,000 × 144 occupied nights = ¥5,760,000
STEP 2: Expense Calculation
Initial Costs (Reference: Startup Expenses)
(Since this calculation focuses on profit benchmarks, we’ll center on operating expenses—but here’s a reference for initial costs as well.)
- Property acquisition costs (purchase or initial lease costs)
- Renovation costs
- Fire safety equipment costs (often relatively low under the Private Lodging Business Act: from ¥50,000)
- Notification/registration fees (e.g., administrative scrivener fees: from ¥100,000)
- Furniture, appliances, and amenities (for a 100㎡-scale property: from ¥1.5 million)
Annual Operating Expenses (Running Costs)
- Variable costs (revenue-linked):
- OTA fees (approx. 15% of revenue): ¥5,760,000 × 15% = ¥864,000
- Property management fees (assumed at approx. 20% of revenue): ¥5,760,000 × 20% = ¥1,152,000
- Cleaning and linen costs (assumed ¥15,000 per turnover): ¥15,000 × 144 turnovers = ¥2,160,000
- Consumables (approx. 2% of revenue): ¥5,760,000 × 2% = ¥115,200
- Total variable costs: approx. ¥4,291,200
- Fixed costs (independent of revenue):
- Utilities (factoring in occupied days): average ¥30,000/month × 12 months = ¥360,000
- Communications (high-speed Wi-Fi): ¥5,000/month × 12 months = ¥60,000
- Insurance (fire and liability): ¥50,000/year
- Property tax and city planning tax (varies by property): ¥150,000/year (assumed)
- Other (system usage fees, etc.): ¥30,000/year
- Total fixed costs: approx. ¥650,000 (*Rent or loan repayments vary greatly depending on how the property was acquired, so they are not included here.)
Total Annual Operating Expenses
- Calculation: Variable costs ¥4,291,200 + Fixed costs ¥650,000 = approx. ¥4,941,200
STEP 3: Calculating Annual Pre-Tax Profit
- Calculation: Annual revenue ¥5,760,000 − Annual operating expenses ¥4,941,200 = ¥818,800
Based on this simulation, the estimated annual pre-tax profit (before rent or loan repayments) for a whole-house minpaku in Osaka City—2-story, 100㎡, operating under the 180-day rule—comes to approximately ¥820,000.
Understanding the Profit Range (¥500,000–¥2.5 Million)
While the simulation above yielded approximately ¥820,000, the benchmark range mentioned at the outset—¥500,000 to ¥2.5 million—reflects real-world variation. This range is largely driven by the following factors.
- Differences in ADR (average daily rate): Location (e.g., walking distance to Namba versus a suburban setting) and property grade (interior finishes, added-value amenities) can significantly shift the ADR. If ADR rises to ¥50,000, revenue climbs to ¥7.2 million, pushing profit up to approximately ¥2.26 million.
- Operational efficiency: Self-managing instead of outsourcing to a property management company, or hiring a more affordable cleaning partner, can boost profit by reducing expenses. (Though this carries the risk of lower service quality.)
- Impact of supplementary ordinances: If the property is near a school and weekday operations are restricted, occupied days will decrease further, potentially causing a substantial drop in profit.
Five Strategies to Maximize Profit Under the 180-Day Cap
Here are strategic approaches to push profit above the benchmark, even within these limited operating conditions.
- “Full concentration” on weekends and peak seasons: Focus your 180 permitted operating days on the highest-rate dates.
- Rigorous dynamic pricing: Set prices several times higher than the standard rate on event days.
- Added value that commands premium rates: Incorporate features competitors lack, such as BBQ facilities, kids’ spaces, projectors, or a sauna.
- “Alternative use” on non-operating days: Explore additional revenue streams for days when guests can’t stay overnight, such as hourly rental space bookings. (Legal confirmation required.)
- Thorough “optimization” of operating costs: Continuously pursue incremental cost savings, such as reviewing your consumables procurement or implementing energy-saving measures.
Conclusion: Profit Is Achievable Even Under the 180-Day Rule—But…
A whole-house minpaku on a 100㎡ scale in Osaka City holds the potential to generate anywhere from several hundred thousand yen to over ¥2 million in annual profit, even within the constraints of the 180-day cap—provided the right strategy is in place.
That said, the risks posed by Osaka City’s supplementary ordinances, along with the stark reality that revenue opportunity is less than half of what’s possible under the Hotel Business Act (365-day operation), remain undeniable realities.
If you’re approaching minpaku not as a casual side venture but as a serious “business,” and you’re seeking greater revenue and stability, we believe that—despite the higher initial investment required—pursuing licensing under the Hotel Business Act represents the optimal path forward in the Osaka market.
Ready to Find Your “Optimal Solution” With Our Team of Experts?
“Should I start under the 180-day rule, or aim for full Hotel Business Act licensing from the outset?”
“I want more detailed insight into the specific profit potential for my own property.”
“Osaka’s ordinances are so complex—I don’t know where to start.”
Whatever your concerns, we’d love to hear from you.
At Stay Buddy Inc., through operating numerous minpaku and simple lodging facilities throughout Osaka City, we’ve accumulated **real-world performance data that’s never been published anywhere else.**
Drawing on this proprietary data, we offer:
- ① A free, highly accurate revenue simulation tailored to your specific property and plans, covering both the Private Lodging Business Act (180-day) and Hotel Business Act (365-day) options.
- ② Guidance on complex regulations, including Osaka City’s supplementary ordinances, with the latest information to help you choose the licensing path best suited to your business.
- ③ Concrete operational strategies designed to maximize profit within the 180-day constraint.
Let’s transform your vacant property from an unfounded gamble into a business with a genuinely high probability of success.
Won’t you take that concrete, realistic first step with us? We look forward to hearing from you.
