10 Steps to Turning Your Vacant Home into a Vacation Rental

Are you struggling to figure out what to do with a vacant house you own? Left untouched, it becomes a “negative asset” — draining you with fixed property taxes while its value continues to decline. But with the right approach, that same empty house holds the potential to welcome travelers from Japan and abroad, transforming into a “money tree” that generates stable income.

One of the most effective ways to achieve this is by operating it as a vacation rental (minpaku).

For those who aren’t sure where to start, this guide breaks down the entire process of monetizing a vacant house into “10 comprehensive steps.”

Why Vacation Rentals Are Emerging as the Top Choice for Vacant Properties

Before diving into the step-by-step guide, let’s briefly explain why vacation rental operation stands out as a strong option compared to other approaches like leasing or selling.

The number one reason is high profitability. Depending on the location and property, vacation rentals have the potential to achieve significantly higher yields than standard leasing. What’s more, the global recovery in travel demand — especially the surge in inbound tourists — continues to drive up the need for accommodations across Japan.

Another major advantage is the flexibility of operation — you can pause bookings whenever you want to use the property yourself, something neither selling nor long-term leasing offers. Making effective use of a vacant property, which has become a broader social issue, is also a meaningful way to contribute to local revitalization.

[Complete Guide] 10 Steps to Monetize Your Vacant House

Now, let’s walk through the specific steps. Following this sequence will help you move forward with your project in a structured, reliable way.

Step 1: Business Planning and Financial Simulation

Start by putting pencil to paper. Rather than diving in on a gut feeling that “this looks profitable,” take a clear-eyed look at the numbers.

• Initial Investment: Calculate the total cost to get up and running, including renovation costs, fire safety equipment installation, furniture and appliance purchases, and licensing/permit application fees.
• Operating Costs: Estimate monthly running costs such as cleaning fees, linen costs, utilities, communication expenses, OTA commissions, and management agency fees.
• Revenue Forecast: Research the rates and occupancy of nearby competing properties to create a realistic sales forecast.

Understanding how long it will take to recoup your investment and what realistic profits look like through this simulation is the first step toward a successful business.

Step 2: Property Research and Legal Compliance Check

This crucial step confirms whether operating a vacation rental is even possible at your vacant property in the first place.

• Check the Zoning District: Verify the “use district” designated under the City Planning Act. In particular, “Category 1 Low-Rise Exclusive Residential Districts” often prohibit vacation rental operations in principle, so be sure to check with your local municipal office.
• Check Building Standards Act Compliance: Using the building confirmation certificate and related documents, verify that the property complies with current Building Standards Act requirements. Older houses may require additional construction work to address issues like seismic resistance.

Step 3: Choosing Your Operating Model (Hotel Business Act or the Private Lodging Business Act)

Two main laws govern vacation rental operations in Japan. Since the permit (or notification) you obtain will significantly shape your operating rules, deciding on your approach early on is essential.

• Private Lodging Business Act (Minpaku Shinpo): Operating days are capped at 180 per year. The requirements are relatively lenient, making this an easier path to get started — but your revenue potential is capped as well. This is well-suited for those looking to run the business on a side-income basis.
• Hotel Business Act (Simple Lodging Operation): No limit on operating days — you can run the property 365 days a year, opening the door to substantial revenue. However, you’ll need to meet stricter requirements than under the Private Lodging Business Act, including a front desk obligation (alternative measures available) and minimum floor space standards. This route is ideal for those looking to build a serious, full-scale business.

Step 4: Renovation and Remodeling

Define your property’s concept and transform the space into somewhere guests will truly enjoy staying. Cleanliness in the water-related areas (kitchen, toilet, bathroom) in particular has a direct impact on guest satisfaction, so make this a priority investment. Work closely with your design and construction firm to ensure the space meets the legal requirements you chose in Step 3 (such as the placement of fire safety equipment).

Step 5: Furnishing and Amenities Preparation

Whether guests feel like they’re “relaxing as if at home” or enjoying “a special, out-of-the-ordinary experience” comes down to the quality of your furnishings.

• Essential Items: Beds, bedding, air conditioning, a refrigerator, a microwave, and Wi-Fi access are the bare minimum.
• Nice-to-Have Items: If you have a kitchen, cookware and dishware; a washing machine for longer-stay guests; a high chair for families — tailor these extras to your target guests.
• Amenities: Choosing quality towels, toothbrushes, shampoo, conditioner, and body soap can also lead to higher ratings.

Step 6: Applying for Licenses and Permits

Now it’s time for the official paperwork. Based on the operating model you chose in Step 3, submit your application documents to the relevant public health center or municipal authority. You’ll need many documents, including floor plans and registered property certificates. In parallel, you’ll need to undergo a fire department inspection and obtain a Fire Code Compliance Certificate. Since this process is complex and time-consuming, working with a specialist such as an administrative scrivener (gyoseishoshi) is a smart option.

Step 7: Listing on Booking Platforms

Once your permits are approved, it’s time to prepare for guests. List your property on OTAs (Online Travel Agents) used by travelers worldwide, such as Airbnb and Booking.com. Compelling photos taken by a professional photographer, paired with a description that conveys your property’s concept and the appeal of the surrounding area, are the keys to standing out among countless listings.

Step 8: Pricing Strategy and Reservation Management

Don’t set your prices arbitrarily. Flexible pricing (dynamic pricing) that accounts for competitor rates, day of the week, seasonal demand, and local events is key to maximizing revenue. If you’re listing on multiple OTAs, consider adopting a “channel manager” system to consolidate reservation data and prevent double bookings.

Step 9: Building Your Operational Framework (Cleaning and Guest Support)

Day-to-day operations are by far the most demanding part of running a vacation rental.

• Cleaning: Thorough cleaning and linen changes are required after every guest checkout. You can handle this yourself or outsource it to trusted cleaning staff or a specialized company.
• Guest Support: Round-the-clock availability is needed to handle inquiries during the booking process, check-in guidance, and any issues that arise during a guest’s stay.

Decide whether you’ll handle all of this yourself (“self-management”) or outsource it to a professional property management company. Working with a management company saves you the hassle, but requires paying a portion of your revenue as a service fee.

Step 10: Launching Operations and Managing Reviews

With everything in place, it’s finally time to open your doors. When you welcome your first guests, focus on delivering the highest level of “omotenashi” (hospitality). Positive reviews earned through a great guest experience are the best form of advertising and directly drive future bookings. Even if you receive a negative review, responding sincerely and using the feedback to improve is key.

Stay Buddy Will Guide You Through Every One of These 10 Steps

Having walked through these 10 steps, turning your vacant house into a vacation rental probably feels like a real, tangible project now. At the same time, you may have realized that the path is far from simple, requiring extensive specialized knowledge and procedures along the way.

In particular, legal research, business planning, navigating complex licensing applications, and designing renovations with profitability in mind are extremely difficult to pull off successfully without expert guidance.

We at Stay Buddy Co., Ltd., vacation rental property management specialists, are a team of professionals dedicated to unlocking the potential of vacant properties — providing comprehensive, one-stop support across all 10 of these steps.

“Can this vacant house even become a vacation rental?” “How much could I actually earn?” “The paperwork sounds like a headache…”

Whatever vague worries or uncertainties you’re facing, we invite you to reach out to us. From property assessment and business planning, to handling permit applications, connecting you with renovation companies, and managing guest bookings and support once you’re up and running — we handle it all. Our goal is to minimize the burden on you as an owner while maximizing the value of your valuable asset: your vacant property.

Let’s discover together how to make your vacant house shine as the valuable asset it truly is. We look forward to hearing from you.