Japan landlords turn more cautious as loan rates rise says Rakumachi

Higher borrowing costs are beginning to change the behavior of Japan’s residential property investors, with landlords reporting weaker cash flow, greater caution toward new acquisitions and more consideration of rent increases.

In an October 6 survey by property-investment platform Rakumachi, 77.8% of 239 respondents using investment-property loans said their borrowing rate had risen during the previous year.

Among 286 property owners, 36.7% said they had already increased rents and another 26.9% were considering or planning an increase.

Higher rates are cutting into landlord cash flow

Among borrowers who reported the largest increase on one of their loans, the average rise was 0.625 percentage points, based on 123 responses.

Of 149 respondents who provided information on their monthly repayments, 130 said their payment had increased. For that group, the median increase was ¥15,000 a month.

Among borrowers whose monthly repayments increased, the median increase was ¥15,000. Rakumachi also said 13.3% of respondents to the repayment question reported increases of ¥50,000 or more per month.

AI generated image of a property investor going over their portfolio.  All rights reserved.

For landlords, higher debt service comes on top of property taxes, repairs, insurance, management expenses, vacancy and other operating costs. Unless rental income rises or other expenses fall, the increase reduces the cash flow remaining to the owner.

Rakumachi also received comments from investors who said higher interest costs had reduced cash flow, narrowed the gap between property yields and borrowing rates, or slowed the pace at which their loan principal was declining.

More landlords are considering higher rents

Among the 286 property owners surveyed about rents, 36.7% said they had already raised them. Another 26.9% said an increase was under consideration or planned, while 33.2% said they wouldn’t or couldn’t raise rents.

Higher borrowing costs were one reason respondents cited, but not the only one. Rakumachi also reported references to higher surrounding market rents, property taxes, repair expenses and utilities.

That distinction is significant. Rising financing costs increase a landlord’s expenses, but they don’t determine the rent a tenant will accept. Whether an owner can secure a higher rent still depends on the local market, competing properties, vacancy conditions and the tenancy itself.

The survey therefore provides evidence of greater pressure to seek higher rents, not evidence that financing costs are producing rent increases across Japan.

Investors are becoming more cautious about new purchases

Higher rates are also affecting acquisition decisions.

Asked whether their attitude toward buying property had changed given recent conditions, 44.0% of the 339 respondents said they had become more cautious. Another 47.5% said their stance hadn’t changed.

Respondents who had become more cautious pointed to the combination of higher property prices, rising construction costs and higher interest rates, which had reduced the number of properties they considered financially viable.

A window into changing landlord behavior

Rakumachi conducted the online survey from August 20 to September 8 among registered users of its property-investment platform and received 339 valid responses. Different questions were answered by different subsets of that group.

It isn’t a census of Japanese landlords or a statistically representative picture of the entire rental-property market. Rakumachi users are active property investors, and people choosing to respond to an online survey may differ from the wider landlord population.

But the results provide some direct insight into how some leveraged owners are experiencing Japan’s changing financing environment.

Further Reading:

Rakumachi - October 6, 2026 landlord interest-rate survey release (Japanese only)