Investing in Yokohama: Tokyo's Affordable Bayside

Why Yokohama Appeals to Foreign Investors

Yokohama is no provincial town: it is the southern heart of the world's largest metropolis. A port, industrial and residential city, it lives in Tokyo's immediate orbit while keeping an economy of its own. For an investor, that changes everything: Yokohama's rental demand is anchored to Tokyo's job market, yet its purchase prices remain those of a large second-tier city. Four pillars sum up the opportunity.

1. Japan's second city, inside Tokyo's job market

With about 3.77 million residents, Yokohama is Japan's most populous municipality after Tokyo's 23 wards — larger, on its own, than Osaka. Hundreds of thousands of workers live here and commute to Tokyo: the city is the country's biggest reservoir of commuters. This massive, stable rental demand is the real engine of the investment.

2. An entry ticket 30-50% below Tokyo

A used condominium (chuko manshon, 中古mansion (copropriété), older apartment in co-ownership) of 70 sqm trades on average around ¥45-55M (~€300,000-365,000) citywide, against often ¥70-90M in Tokyo's 23 wards. Price per square metre is frequently 30 to 50% lower than in the capital's central wards. For the same budget, you buy larger, newer, or better located.

3. Higher yields than Tokyo

The direct consequence: gross yields usually run between 4% and 6% in the residential wards, 1 to 2 points above central Tokyo, which has slipped toward 3%. The prestigious waterfront of Minato Mirai (みなとみらい, modern business district) is the exception, with yields near 3%. See our comparison of rental yields by city.

4. A redevelopment cycle and new rail lines

Two dynamics support long-term value: the ongoing Minato Mirai 21 urban project (office towers, residences, tourism) and, above all, the opening of direct rail links to central Tokyo (see next section). These connections have brought once-isolated districts closer to the capital's economic core.

The trade-off to know: because Yokohama depends on Tokyo's cycle, its population has slipped slightly since its 2021 peak, and some outer districts are ageing. You invest here for the price-to-yield pairing and the strength of commuter demand, not for a speculative surge. Before any purchase, read our complete guide to buying in Japan and our analysis of Japanese property prices in 2026.

Yokohama in Tokyo's Orbit: The New Direct-Line Bet

Proximity to Tokyo is Yokohama's number-one asset — and that asset has grown stronger. For an investor, travel time to Tokyo's main job hubs (Shibuya, Shinjuku, Marunouchi) is the first driver of rent and vacancy.

A dense rail web to the capital

Yokohama connects to Tokyo through a bundle of lines: Tokaido and Keihin-Tohoku (JR), the Yokosuka, and above all the Toyoko line of Tokyu (東急東横線) running to Shibuya, extended underground into the Minatomirai line (みなとみらい線) serving the waterfront. From Yokohama station, Shibuya is about thirty minutes away.

The lines that changed the game (2019 and 2023)

Two recent openings revalued whole districts of western Yokohama, historically poorly linked to Tokyo:

• 2019 — Sotetsu-JR through service: the Sotetsu (相鉄) railway gained direct service to Shinjuku, opening access to central Tokyo from western Yokohama without a transfer.
• 2023 — Sotetsu-Tokyu link and Shin-Yokohama station: a new line now connects the Sotetsu network to Shibuya, Meguro and beyond, via the Shin-Yokohama (新横浜) Shinkansen station. Districts once seen as "second-tier" are now one connection from Tokyo's major hubs.

Investor read: a new direct service mechanically raises rents and cuts vacancy along the corridor. Targeting a property 5-10 minutes' walk from a newly connected station means buying a growing stream of demand. Shin-Yokohama station, a Shinkansen hub now linked to Shibuya, is the textbook example. Take advantage while the weak yen favours the euro buyer.

Where to Invest in Yokohama, District by District

Yokohama comprises 18 wards (ku, -ku), from the touristic waterfront to the family residential hills. Here are the most relevant zones for an investor.

Nishi-ku: Yokohama, Minato Mirai, Sakuragicho

The western ward (Nishi, 西-ku) concentrates Yokohama station, the Minato Mirai business district and Sakuragicho. Prestige, liquidity and high occupancy, but the city's priciest tickets and lower yields (~3%). Target: studio or 1LDK (one room plus living-dining-kitchen) for professionals, wealth-preservation hold.

Naka-ku: Kannai, Motomachi, Chinatown

The central ward (Naka, 中-ku) is home to Kannai (関内, historic business quarter), Motomachi (元町, upscale shopping) and the Chukagai (中華街, Japan's largest Chinatown). The city's most touristic zone: this is where short-term letting is conceivable, under strict conditions (see below).

Kanagawa-ku: the access-to-price sweet spot

Just north of Yokohama station, Kanagawa-ku (神奈川-ku) offers an excellent compromise: one stop from the centre, yet markedly cheaper. Prime hunting ground for cash flow, popular with young professionals.

Kohoku: Shin-Yokohama and the family new town

Kohoku-ku (港Kita-ku) combines the Shin-Yokohama Shinkansen station and the Kohoku New Town (Center Kita/Minami): families, retail, schools. Stable rents, low vacancy, ideal for a long hold and smooth remote property management.

Aoba-ku: the upscale suburb on the Den-en-toshi line

To the northwest, Aoba-ku (青葉-ku), on the Den-en-toshi line to Shibuya, is one of the most affluent residential areas: family homes, executives, low turnover. High rental security, modest appreciation.

Tsurumi and Kanazawa: industry and seaside

Tsurumi-ku (鶴見-ku), between Yokohama and Kawasaki, houses a large working-class and international population: attractive yields, demand backed by industrial jobs. Kanazawa-ku (金沢-ku), to the south on the Seaside Line, blends logistics, a university and the seafront — low tickets, enhanced due diligence on local jobs. Browse our hand-picked listings in The Gems.

Yokohama Districts Compared at a Glance

An overview to steer your search by objective (cash flow, safety or revaluation). Indicative 2026 ranges for resale property, to be confirmed deal by deal.

District	Ward	Profile	Studio / 1LDK ticket	Typical use
Minato Mirai / Yokohama	Nishi-ku	Business, prestige, waterfront	¥28-45M (€185-300k)	Executives, wealth
Kannai / Motomachi / Chinatown	Naka-ku	Tourism, retail	¥20-35M (€135-235k)	Cautious STR, execs
Kanagawa-ku	Kanagawa-ku	Access/price, young pros	¥17-26M (€115-175k)	Cash flow
Shin-Yokohama / Kohoku	Kohoku-ku	Shinkansen, families	¥18-28M (€120-185k)	Long hold
Aoba-ku	Aoba-ku	Upscale suburb, families	¥16-25M (€105-165k)	Rental security
Tsurumi / Kanazawa	Tsurumi / Kanazawa	Industry, seaside	Building from ¥30M	Income building

Reminder: in Yokohama, direct travel time to a major Tokyo hub (Shibuya, Shinjuku) and a station within a 10-minute walk weigh more on vacancy than the prestige of the district.

Prices, Yields and Tax: Yokohama vs Tokyo and Osaka

Yokohama's best argument shows up in a comparison table. For the same budget, the city offers more square metres and a higher yield than Tokyo while staying in the same job market; in exchange, historical appreciation and international prestige are more modest.

Criterion	Yokohama	Osaka	Tokyo (23 wards)
Used 70 sqm condo (average)	~¥45-55M (€300-365k)	~¥40-50M (€270-330k)	~¥70-90M (€470-600k)
Gross resale yield (order of magnitude)	4-6%	4-5%	3-4%
Central studio rent	~¥75,000 (~€500)	~¥70,000 (~€465)	~¥100,000 (~€665)
Liquidity / international market	High	High	Very high
Tourist pressure (STR)	Moderate (Chinatown, waterfront)	Strong	Strong

Purchase costs: a non-negotiable point

In Japan, budget for total acquisition costs at or below 6% of the price (registration duties, acquisition tax, agency fees, the shiho shoshi judicial scrivener). Then the annual property tax (koteishisanzei, kotei shisan-zei) runs around 1.4% of the assessed cadastral value, often well below the price paid.

Financing: cash for most foreigners

A crucial point: Japanese mortgages are in practice reserved for salaried residents of Japan. A non-resident investor almost always buys in cash. Yokohama's ticket, lower than Tokyo's, makes an all-cash purchase more attainable. Compare with investing in Tokyo and investing in Osaka to weigh your options by capital.

Case Study: A 1LDK Near Yokohama Station, With the Numbers

Nothing beats a worked example. Take a used 30 sqm 1LDK in Kanagawa-ku, one stop from Yokohama station, bought for ¥25M (~€167,000) — a realistic profile for this market.

At purchase

• Price: ¥25,000,000 (~€167,000)
• Acquisition costs (~6%): ~¥1,500,000 (~€10,000)
• Total entry budget: ~¥26.5M (~€177,000)

In operation (per year)

• Rent: ¥98,000/month, i.e. ¥1,176,000/year (~€7,840)
• Building charges + repair fund (kanrihi + shuzen tsumitatekin): ~¥240,000/year
• Property tax (koteishisanzei): ~¥150,000/year
• Property management (~5% of rent): ~¥59,000/year

Result

Gross yield: 1,176,000 / 25,000,000 = 4.7%. After charges, tax and management (~¥449,000), net income before tax comes to ~¥727,000/year, i.e. a net yield of roughly 2.9% on price — above what an equivalent property offers in central Tokyo. Japanese tax on rental income then applies (see rental taxation for non-residents). Model your own scenario with our yield simulator.

Expert read: in Yokohama, real net yield hinges mainly on two variables — vacancy (pick a property near a station well connected to Tokyo) and building charges, sometimes high in waterfront towers. A slightly older but well-located unit on a direct corridor to Shibuya often beats a "brand-new, prestigious" one on cash flow.

Airbnb and Short-Term Rentals in Yokohama

Yokohama has neither Kyoto's nor Osaka's tourist flow, but it draws visitors around the Chukagai (中華街, Chinatown), Minato Mirai and the waterfront. Short-term letting is therefore possible, but regulated.

The rules to follow

Minpaku (minpaku, short-term home-sharing), governed by the private-lodging law (jutaku shukuhaku jigyo-ho, jūtaku shukuhaku jigyō法), is capped at 180 nights a year nationwide. Before any plan, two checks are essential: the co-ownership rules (many ban it) and the municipal ordinance of the City of Yokohama, which can restrict zones and periods. Details in our article on the minpaku licence and the 180-night cap.

Where STR makes sense

Potential concentrates in Naka-ku — Chinatown, Motomachi, Yamashita — and near Minato Mirai, where leisure and business demand overlap. Elsewhere, classic long-term letting to commuters remains more profitable and simpler. Expert tip: never build your returns on an Airbnb scenario at the 180-night cap; treat STR as a bonus, with a fallback plan in long-term rental.

Common Mistakes to Avoid and Expert Tips

Yokohama's market is solid, but a few traps come up again and again with foreign buyers.

Mistakes not to make

• Ignoring travel time to Tokyo. In Yokohama, a property's value is measured first by its direct link to Shibuya, Shinjuku or Marunouchi. A poorly connected district, however pretty, stacks vacancy and weak resale.
• Overpaying for Minato Mirai prestige. The waterfront is splendid, but its yields (~3%) are close to Tokyo's. For cash flow, look rather at Kanagawa-ku, Kohoku or Tsurumi.
• Betting on tourism as in Kyoto. Yokohama is moderately touristic. Short-term letting is a bonus, not a base: minpaku capped at 180 nights, co-ownership rules and municipal ordinance to check.
• Underestimating charges. In recent waterfront towers, kanrihi (kanri-hi, management fees) and shuzen tsumitatekin (shūzen tsumitatekin, repair reserve fund) can seriously dent the yield. Always ask for the history and the fund balance.
• Ignoring seismic standards. Favour a property compliant with the 1981 earthquake standard (shin-taishin, shin-taishin). See our articles on the 1981 seismic standard and natural risks and Japanese real estate.
• Thinking a purchase grants a visa. Buying property in Japan grants no residence right. It is an investment, not an immigration status.

The tip that changes everything

Buy like a commuter: target a station directly linked to a major Tokyo hub (ideally on a newly connected corridor, around Shin-Yokohama or the Sotetsu network), check charges and the repair fund line by line, and put future liquidity ahead of hype. For a first remote purchase, a well-located condominium remains the simplest vehicle. Our team can run this due diligence for you: discover our personalised support all the way to the keys, and browse our supported projects.

In Short: Yokohama, the Affordable Tokyo

Yokohama has neither Tokyo's global prestige nor Osaka's tourist buzz — and that is precisely where the opportunity lies. For a foreign investor buying cash, Japan's second city offers a rare price-to-yield pairing: studios and 1LDK units accessible from ¥16-25M, gross yields of 4-6%, and rental demand backed by the world's largest job market — Tokyo's, thirty minutes away by train.

The winning strategy is simple: aim for cash flow, pick a station directly linked to central Tokyo (ideally on a newly connected corridor), check charges and seismic compliance, and treat short-term letting as a bonus. This is a market of patience and yield, backed by the strength of the metropolis — exactly what an investor building a durable Japanese portfolio is after.

Ready to act? Explore The Gems hand-picked by our team, test your assumptions with the yield simulator, and if you want a trusted partner on the ground, discover our end-to-end support.

Frequently asked questions

Is it profitable to invest in Yokohama in 2026?

Yes, for a cash-flow profile. Gross resale yields sit between 4% and 6% in the residential wards, 1 to 2 points above central Tokyo, thanks to prices 30-50% lower and very stable commuter rental demand. The Minato Mirai waterfront is the exception, with yields near 3%.

How much does an apartment cost in Yokohama?

A used 70 sqm condominium averages around ¥45-55M (~€300,000-365,000) citywide, and a central studio or 1LDK starts at ¥16-28M (~€105,000-185,000). That is 30 to 50% cheaper than Tokyo's central wards for the same floor area.

Can a foreigner buy property in Yokohama?

Yes, with no nationality restriction or residency requirement: freehold ownership of land and building is open to foreigners. However, buying grants no visa, and local mortgages are reserved for salaried residents of Japan — so most non-residents buy in cash.

Which district should I choose to invest in Yokohama?

For liquidity and prestige, Nishi-ku (Minato Mirai, Yokohama station); for cash flow, Kanagawa-ku and Tsurumi; for a stable family hold, Kohoku (Shin-Yokohama) and Aoba-ku. A direct link to a major Tokyo hub matters more than district prestige.

Is Yokohama a good alternative to Tokyo for investment?

Yes: Yokohama is within Tokyo's job market, about thirty minutes from Shibuya, but with prices 30-50% lower and higher yields. The new direct lines opened in 2019 and 2023 have brought several districts even closer to central Tokyo, supporting rents and values.

Can you run an Airbnb in Yokohama?

It is possible around Chinatown, Motomachi and Minato Mirai, but more limited than in Osaka or Kyoto. Short-term letting (minpaku) is capped at 180 nights a year nationwide; you must check the co-ownership rules and Yokohama's municipal ordinance before starting.

What are the purchase costs and taxes in Yokohama?

Expect total acquisition costs at or below 6% of the price (registration, acquisition tax, agency, shiho shoshi), then an annual property tax of about 1.4% of the assessed cadastral value, usually well below the price paid.