Measures Against Apartment Vacancies｜How to Review Rent, Advertising, Broaden Tenant Conditions, and What to Check Before Lowering Rent
After a tenant moves out, it can be difficult to find the next occupant. As recruitment continues, property management companies or real estate agents often suggest, “Let’s lower the rent.” This is a common concern among owners of entire apartment buildings.
Lowering rent certainly works, but for income properties, the impact affects not only monthly rental income but also the property’s valuation. This article explains how to identify the causes of vacancies, what measures can be taken before lowering rent, and how to calculate and decide if lowering rent is appropriate.
Divide the Causes of Vacancies into Three Categories
Countermeasures for vacancies vary depending on the cause. First, confirm which of the following applies.
| Cause | Common Situation | Main Countermeasures |
|---|---|---|
| Rent deviates from the market rate | Few inquiries overall | Review by comparing recruitment rent with similar conditions |
| Recruitment is not reaching potential tenants | Few listings on portal sites, agents do not introduce the property | Review listings, advertising fees (AD), improve photos |
| Room or conditions do not match tenant needs | Viewings occur but do not lead to applications | Loosen tenant conditions, add facilities, improve restoration quality |
You can ask property management companies or real estate agents for inquiry and viewing numbers. Determining whether there are “few inquiries” or “viewings occur but no decision” will clearly indicate what should be reviewed.
First, Compare the Rent with Market Rates for “Same Conditions”
Whether rent is too high cannot be judged without comparing it to rooms with similar walking distance to the station, size, age, and facilities. When comparing, look at rent per square meter (㎡ unit price) rather than total rent to normalize size differences.
As an example, rental listings around Nakano Station with exclusive areas between 18 and 30㎡ were aggregated by walking time from the station.
| Distance from Station | Number of Listings | ㎡ Unit Price (Median) | Monthly Rent Converted to 25㎡ |
|---|---|---|---|
| Within 5 minutes on foot | 78 listings | Approx. 4,550 yen | Approx. 114,000 yen |
| Within 10 minutes on foot | 296 listings | Approx. 4,250 yen | Approx. 106,000 yen |
| Within 20 minutes on foot | 389 listings | Approx. 4,200 yen | Approx. 105,000 yen |
Source: Urbalytics (data aggregated in September 2026, based on recruitment rents). Unlike contracted rents, this figure includes differences due to building age and facilities.
Even for the same station, monthly differences of several thousand yen arise simply due to distance from the station. It is important to compare under matching conditions so as not to mistakenly judge your room as "above market rate" compared to rooms closer to the station or newer properties. If after adjusting for conditions your rent is clearly above the market, consider revising the rent.
Have Real Estate Agents Introduce Your Property: Advertising Fee (AD) and Free Rent
Most tenants find properties through portal sites and apply via real estate agents (brokers). When agents have multiple similar rooms, which room they prioritize to introduce depends not only on room conditions but also on the recruitment conditions from the owner.
| Measure | Details | When Suitable |
|---|---|---|
| Advertising Fee (AD) | Owner pays advertising fee to agent when tenant is decided. Usually about 1–2 months’ rent | When you want to increase inquiries and introductions |
| Free Rent | Grant free rent for a certain period after move-in (e.g. 1 month) | When you want to reduce tenant’s initial cost burden |
| Reduction of Key Money or Security Deposit | Reduce initial costs | When competing with properties that have lower initial costs in the same area |
All of these are one-time costs and do not change the monthly rent. It is common practice to try these measures before lowering rent.
Also Review the Timing of Recruitment
Rental demand follows seasonal fluctuations, with increases in applicants from January to March due to school enrollment, job starts, and transfers. To avoid vacancies during this period, recruitment can start before the tenant moves out once a notice of move-out is received (recruitment during occupancy). Viewings may take place after move-out, but starting recruitment a month earlier can shorten vacancy periods. Conversely, if move-outs occur during low-demand periods, it is important to combine AD and free rent early rather than leaving the unit vacant until the next busy season.
Broaden Tenant Conditions
Expanding the range of eligible tenants increases the recruitment pool. However, since there are considerations for each condition, start after deciding policies with the management company.
- Pets Allowed: Since floors and walls can be easily damaged, it is necessary to prepare measures such as increasing the security deposit and clarifying restoration obligations in the contract. Consideration for existing tenants (noise, odors) is also needed.
- Foreign Nationals: Using guarantee companies and management companies with multilingual support reduces burdens such as explanations during contract signing and guidance on garbage disposal rules.
- Seniors: Using monitoring services or the Ministry of Land, Infrastructure, Transport and Tourism’s published “Model Contract Clauses on Handling Leftover Items” can prepare for emergency situations.
- Recipients of Public Assistance: Some municipalities allow “proxy payment” where rent subsidies from the municipality’s housing assistance are paid directly to the owner. Confirm the policy and subsidy limits for each municipality and coordinate with a management company experienced in such cases.
- Corporate Contracts and Monthly Rentals: Changing tenant types by renting as corporate housing or furnished short-term rentals is also an option.
Improve Room Presentation and Facilities
If viewings occur but applications do not follow, the cause often lies in the room itself or how it is presented.
- Photos: Photos on portal sites are the first decision-making material. Taking new photos in bright daylight with wide-angle lenses—showing the interior, water areas, and views—can improve responses.
- Restore Quickly: Delays in cleaning and repairs after move-out mean the unit cannot be recruited or shown. Ideally, arrange contractors as soon as move-out notice is received.
- Facilities: Consider facilities often required in properties for singles, such as free internet, delivery lockers, security cameras, and monitor intercoms. Compare costs and how much these additions help maintain rent.
- Common Areas: Dirty entrances or garbage areas lower impressions even if the rooms are clean. Review cleaning frequency of shared spaces.
Reducing Move-Outs Is Also a Vacancy Countermeasure
As important as filling vacancies is encouraging current tenants to stay longer. Move-outs incur three costs: restoration fees, advertising fees (AD), and lost rent during vacancy.
- Respond promptly to equipment failures and complaints
- Keep common areas clean
- Conduct satisfaction surveys at lease renewal to catch dissatisfaction early
If rents are below market rate at renewal, you may be able to discuss rent increases. Since tenant consent is required, use local market data to negotiate politely.
Calculate the Impact on “Valuation” Before Lowering Rent
The price of income properties is roughly determined by “annual rent ÷ capitalization rate.” Therefore, lowering rent reduces not only rental income but also the property’s valuation when selling. Using a 100,000 yen monthly rent unit as an example, let’s compare AD and rent reduction.
| Measure | Owner’s Burden | Valuation Impact (Simple Calculation at 5% CAP Rate) |
|---|---|---|
| AD 1 Month | 100,000 yen (one-time) | None (rent does not change) |
| Lower Rent by 5,000 yen/month | 60,000 yen/year (continues while occupied) | Approx. 1.2 million yen decrease |
While small for one unit, reducing rent equally across 10 units results in a roughly 12 million yen difference in valuation by simple calculation. For properties you plan to sell, lowering rent should be the last resort, trying AD and condition reviews first. The relationship between rent and sale price is also explained in "Income Property Selling Process."
Summary
- Divide vacancy causes into “rent,” “recruitment reach,” and “room/conditions” before selecting countermeasures.
- Compare rent with market using matched conditions in terms of walking distance, size, and age, focusing on rent per ㎡.
- Before lowering rent, try AD, free rent, reviewing initial costs, and broadening tenant conditions.
- Reducing move-outs also decreases vacancy periods and costs.
- Lowering rent also affects valuation. Confirm impact by calculating with capitalization rates before deciding.
In TLL’s management agency service, we comprehensively handle review of recruitment conditions compared with surrounding recruitment and contracted rents, arrangement of restorations, and tenant support (our managed properties’ average occupancy rate is 98.2%; average time from move-out to next contract is about 27 days; internal aggregate for the last 12 months). For details, please see Asset Management and Operation Services.
About this article
- Author
- Xiao Li（Asset Management）Qualifications: Real Estate Transaction Specialist, Building Management Specialist
The operational lead for real estate sales and property management. At NTT Communications, he spent more than eight years managing DX projects for major enterprises, overseeing the full process from requirements definition through delivery and operations. At TLL, he handles the entire deal management cycle for income-producing properties, including sales strategy planning, investor sourcing, contract execution, settlement, and handover, providing well-matched opportunities and smooth transaction execution for domestic and international investors and operators.
View profile → - Publisher
- TLL合同会社宅地建物取引業 東京都知事(1)第108202号住宅宿泊管理業 国土交通大臣(01)第F03424号
Data in this article cite their source and as-of date. Market conditions and regulations change, so check the latest information and consult a professional before deciding. Translated from the Japanese original.
