Tokyo’s Rental Yields in 2025: What the Data Reveals for Global Investors

By Tokyo Insights · Updated October 2025

Yield is the unifying lens that aligns price, rent, vacancy, and capex. In Tokyo, yield dispersion is driven by station-level realities — line effects, walk-time, tenant liquidity, and vintage. This article provides a repeatable framework to benchmark, compare, and improve rental yields in a professional workflow.

1) Definitions that Matter

• Gross Yield: Annual rent / Purchase price.
• Net Yield: Gross minus HOA/management, insurance, taxes, realistic vacancy.
• Stabilized Yield: Net yield after first-year leasing and minor capex.

2) Station-Level Drivers of Yield

• Walk-Time Elasticity: price and rent decay per minute from the ticket gate.
• Vintage / Age-Drag: discount vs newer stock; capex cadence by era.
• Renter Liquidity: student/office worker mix; seasonality by line.
• Layout Fit: 1R/1K vs 1LDK vs 2LDK+ by station demographics.

3) The 2025 Picture: Compression with Pockets

Headline yields have compressed vs. 2020, but dispersion widened across stations. Stations with shallow distance-decay, strong renter liquidity, and moderate vintage are still printing resilient net yields. The edge lies in relative value — not averages.

4) A Practical Yield Benchmarking Workflow

1. Build comps by line / station / walk-time, split by layout and vintage.
2. Compute gross and net yields with conservative vacancy and fee schedules.
3. Plot distance-decay and age-drag to identify outliers.
4. Cross-check rent liquidity (days-on-market, viewing volume) by station.

5) Red Flags (Why High Yield ≠ Good Deal)

• Steep distance-decay slope (tenants avoid the last 5–8 minutes).
• Vintage with looming capex (elevators, exterior, plumbing).
• Fragile renter base (single employer or campus dependency).
• Unrealistic rent ask vs station median.

6) Playbook: Improve Yield Without Gambling

• Target slightly older assets near high-liquidity stations with manageable capex.
• Optimize layout fit (1K or compact 1LDK near commuter hubs).
• Exploit walk-time anomalies (e.g., elevation, shortcuts) where rent decay is muted.
• Refinance prudently; underwrite FX and rate scenarios if non-JPY investor.