Property attributes influencing profitability before and after conversion of vacant long-term rentals to short-term rentals
Kentaro Murota, Yangcheng Gu, Xiaorui Wang, Daisuke Matsushita
TL;DR
This study identifies property features in Tokyo that make converting long-term rentals to short-term rentals profitable, especially near tourist attractions and transport hubs.
Contribution
The study provides empirical evidence on property attributes that improve profitability after converting vacant long-term rentals to short-term rentals in Tokyo.
Findings
STR profitability is higher for properties with lower pre-conversion rent and proximity to high-ridership stations.
Properties near tourist attractions within 10 km and in transport hub wards show improved profitability after conversion.
Lower-rent peripheral wards with good connectivity also benefit from STR conversions.
Abstract
In Japan, the growing number of vacant housing units has become a pressing issue, and an increase in inbound tourism has led to accommodation shortages and rising lodging prices. Converting long-term rentals (LTRs) into short-term rentals (STRs) has emerged as a practical solution; however, empirical evidence on which property attributes are best suited for such conversions remains limited. This study identified the physical and locational attributes of vacant LTRs in Tokyo’s 23 wards, which contributed to improved profitability following conversion. Using an open dataset of 7,772 Airbnb listings from 2024, we developed a hedonic pricing model to estimate rates based on floor area, distance to the nearest station, station ridership, nearby tourist attractions, and administrative districts. The model was applied to 20 930 LTR properties to estimate the profit ratio before and after…
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Taxonomy
TopicsSharing Economy and Platforms · Migration, Aging, and Tourism Studies · Housing Market and Economics