A condotel, also called a condo hotel or hotel condominium (ホテルコンドミニアム), is a hotel room sold to an individual owner. In Japan the owner buys the room outright as a registered unit under the sectional-ownership system (区分所有), the same legal form as an ordinary apartment. When the owner is not staying, the hotel rents the room to guests and pays the owner rent.
How a condotel works in Japan
Tokyu Resort describes four parties: the owner; the developer or seller; the hotel operator, which leases the room, pays the owner and handles cleaning and repairs; and an asset management company that the owner also contracts with to check the operator's rent calculations.
At purchase you sign a hotel lease agreement (ホテル賃貸借契約) with the operator and an asset management services agreement (資産管理業務委託契約). If you buy a resale unit, you take over the ownership and both agreements from the seller. Many buildings do not let owners cancel the hotel lease, so the room is always part of the hotel.
Condotel, timeshare and resort membership
A resort membership such as XIV (エクシブ) or Baycourt Club is a co-ownership share of a building plus a right to stay a set number of nights a year. You book through the club, you cannot rent your nights out, and you pay a yearly fee. A timeshare is similar: you buy the right to use a property for a period each year, not a specific room.
A condotel is a single registered unit. It costs far more to enter than a membership, but it can earn rent from hotel guests and it is valued like real estate. That is the main reason buyers compare it with an apartment rather than with a club.
What it costs to own
Owners pay a management fee and a repair reserve like any condominium owner, plus fees specific to hotel operation and asset management, and fixed asset tax. Okinawa listings often show a hotel operation management fee of about ¥5,000 to ¥13,000 a month on top of the usual fees. Our running-costs guide breaks the lines down one by one.
Where condotels are in Japan
Supply is concentrated in Okinawa, with growing numbers in Niseko, Rusutsu, Hakuba, Karuizawa, Hakone and Kyoto, according to Tokyu Resort. Hotel Condo Market tracks the units currently listed for resale in these areas, building by building, with the source page for every asking price.
Can foreigners buy a condotel in Japan?
Japan places no general restriction on foreign individuals owning real estate, including hotel condo units. Buyers usually need a way to send funds, a signature certificate in place of a registered seal, and a judicial scrivener (司法書士) for registration. Rent paid to non-residents is taxed differently; see our guide on how rental income is paid and taxed.
Before you buy
Treat any promised yield with care. Ask the seller for the last two to three years of actual payback statements, read the hotel lease for its term and cancellation rules, and stay at the hotel as an ordinary guest first. Income only settles once a hotel has a few years of operating history.