Before the property, before the furniture, the first real decision is the framework: a hotel-business permit (簡易宿所) or the 住宅宿泊事業法 notification. Our own apartments all run on the permit; as managers we take on notification properties too, so this is written from inside both.
The usual framing is 'the notification is easy, the permit is hard'. True, and beside the point: that compares procedures, not businesses. For an owner the real difference is one line — the notification lets you sell 180 nights a year, which halves your theoretical revenue before you begin.
The two frameworks as businesses
Make the cap concrete: 180 sellable nights out of 365 puts your occupancy ceiling at 49% even when every sellable night is sold. In a market where comparable listings run at 70%, a notification property competes with a structural 30% revenue discount.
| Permit (簡易宿所) | Notification (民泊新法) | |
|---|---|---|
| Nights per year | Uncapped | 180 max |
| Process | Licensing: health centre, fire, drawings, inspections | Filing, comparatively light |
| Upfront cost | Heavier, mostly fire safety | Light |
| Zoning | Not in residential-only zones | Often allowed there |
| Local overlays | Few | Wards add day and weekday limits of their own |
| Built for | A year-round business | Side income, seasonal use, testing demand |
Which suits which
- Permit: near a station with year-round demand, an investment meant to be recovered, multiple rooms, corporate operation. Uncapped revenue is what justifies the setup cost
- Notification: the property sits in a residential-only zone (so the permit was never available), part of your own home, a holiday house's empty weeks, or a demand test on minimal spend
- Undecided: decide with arithmetic. Model annual revenue under both frameworks at neighbourhood occupancy and rates, and see how many years the setup-cost difference takes to return. Two to three years or less argues for the permit
The third answer: sequence them
For some properties this is not either-or but an order. File the notification, run a season, learn your real numbers, then invest in the permit once the data says so. Deciding fire-safety spend after seeing actual demand is the whole value of this route.
One precondition: a property in a residential-only zone can never upgrade to the permit. Sequencing only works where the permit was available all along, which is why the first check is always zoning — the how is in getting the permit.
Where we stand
Our own apartments are all permitted because we designed them as year-round businesses. For the properties we manage we take no side: bring either framework, or a property still deciding, and the free consultation puts both projections side by side.
Get both projections for your property