Tokyo coastal rental: ¥164,500,000 purchase and ¥970,700/month rent

Getting the occupancy or insurance assumptions wrong could turn this from a reasonable rental into an expensive hold. The property is a 5-bed coastal home in Tokyo priced at ¥164,500,000, with projected rent of ¥970,700 a month. That supports the quoted 7.1% gross yield, but not necessarily the return an owner would keep.

I have allowed for empty periods, management, regular upkeep and a substantial repair, but coastal insurance is still an open question. I also want to test the numbers under less favourable financing rather than rely on cheap debt. Which local expense should I price more carefully, and what unlevered net yield would make the risks acceptable?

Insurance and property tax deserve actual quotes rather than percentage estimates, especially for a coastal property. I’d also stress-test a longer vacancy between tenants: a 5-bed home may have a narrower tenant pool than a typical Tokyo apartment, and turnover can bring repairs as well as lost rent.

What are the building age, construction type and exact area? Those details could change the risk picture substantially. Personally, I’d want around 4.5–5% net before financing and income tax; if it only works with continuous occupancy or cheap debt, I’d pass.