Hokkaido’s Kuttyan: Niseko’s Next Vacation Rental Boom

Hokkaido, especially the Niseko area, is gaining attention as a prime spot for vacation rental investment from both domestic and international investors.

But have you considered the potential of Kutchan town, located near the famous ski slopes?

While Niseko is globally renowned for its ski resorts, many might be surprised to learn that Kutchan town, situated close to Niseko, offers a unique opportunity for vacation rental investment.

Especially for individual investors or those just starting their journey into the world of real estate.

Note: The following calculations are based on an exchange rate of 150 yen per US dollar.

The Current State of Niseko’s Famous Ski Resorts

When one hears “Niseko”, the image of the Niseko Annupuri ski resort probably comes to mind.

This ski haven attracts countless tourists from all over the world during winter, thanks to its exceptional snow quality.

However, investing here comes with its challenges.

1. High Land Prices

Firstly, the land prices around the ski resorts have skyrocketed due to their transformation into resort areas.

In comparison, Kutchan town offers much more affordable rates, making it a more accessible option for individual investors.

According to the “2022 Land Value Publication” by the Ministry of Land, Infrastructure, Transport and Tourism, land prices near the Kutchan station in Hokkaido Kuttyan are as follows: just 620m from the station, they stand at about $840/sq.m. A little further at 850m, it drops to roughly $372/sq.m. And at 1.3km? A more affordable $197/sq.m.

This suggests that the urban areas of Kutchan town in Hokkaido Kuttyan might be a comparatively easier entry point for those keen on Niseko vacation rental investment.

However, here’s the twist: Even though the Gran Hirafu ski resort area, known as Niseko Hirafu, is 6.5km away from the station, its land prices skyrocket to an impressive $1,007/sq.m.

Typically, one might expect lands closer to the convenience of train stations to command higher prices, with values dropping as you move further away. But in Kutchan, this logic doesn’t always apply.

Given the premium land prices, the initial costs for a Niseko vacation rental investment, especially in the Niseko Hirafu area, might be a steep challenge for individual investors.

2. Challenging Profit Margins

Given the high land prices in Niseko, generating a profit from vacation rental investment can be tough.

The initial costs are substantial, and the returns might not justify the investment, especially for individual investors.

Suppose you invest $6.67 million in land in Hokkaido Kuttyan.

Even if you construct a property worth $133,000 there, it’ll take quite a while before your cumulative income from rents or stays surpasses your $6.8 million initial investment.

To maximize your Niseko vacation rental investment returns, a property that matches the high land cost is essential.

Without a multi-room facility or significantly higher rents per room, profiting in high-priced areas like Hirafu near ski resorts becomes challenging.

The Allure of Kutchan Town for Niseko Vacation Rental Investment

While the ski resort areas might be out of reach for many, Kutchan town presents a golden opportunity.

Its proximity to major ski resorts, combined with its affordability, makes it a hotspot for Niseko vacation rental investment.

1. Affordable Land Prices

Land prices in Kutchan town are significantly lower than those in the ski resort areas.

As mentioned earlier, land prices in the Kutchan city center are approximately one-fifth of those around the ski resorts in some locations.

This means lower initial investments and potentially higher returns for investors.

2. Excellent Accessibility

The JR Hakodate Main Line, passing through Kutchan station, connects major cities in Hokkaido, making it easily accessible.

The JR Hakodate Main Line, which passes through Kutchan Station, offers convenient access to Sapporo, one of Hokkaido’s major cities, via Otaru. You can reach Sapporo by train in approximately 2 hours.

Furthermore, you can easily reach the various ski resorts of Niseko Annupuri by using the buses departing from Kutchan Station.

In addition, as it is located in the city center, you can easily find daily necessities, making life more convenient compared to the ski resort areas.

It’s clear that in terms of pure comfort, the city center surpasses the areas around the ski resorts.

3. Potential Growth with the Hokkaido Shinkansen Extension

The planned extension of the Hokkaido Shinkansen, set to complete by the end of 2030, will make Kutchan one of its main stops.

This, combined with its existing resort resources, predicts a bright future for the town.

With the opening of the Shinkansen (bullet train) line, it is expected that there will be an increased demand for accommodation in the vicinity of Kutchan Station, leading to an upward trend in land and real estate prices.

Considering the current affordable land prices, now might be the perfect time for a Niseko vacation rental investment in Kutchan town.

Recommended Vacation Rental Strategy in Kutchan Town

For those interested in maximizing their Niseko vacation rental investment in Kutchan town, we have a strategy for you.

During summer, consider renting out properties as monthly apartments, and in winter, operate them as vacation rentals.

This approach ensures a steady stream of income throughout the year.

Niseko Vacation Rental Investment: The Secrets of High Returns Revealed!

Here’s why monthly apartments and vacation rentals might just be your golden ticket.

While long-term rentals in Hokkaido Kuttyan promise steady monthly incomes, they lack the flexibility to adjust rents based on the ever-changing value of the property.

Monthly apartments and vacation rentals in Niseko, on the other hand, allow dynamic pricing based on daily or monthly demands.

In areas like the rapidly appreciating Kutchan downtown, where land values are on the rise, locking into a fixed rental rate might not be optimal.

Niseko vacation rental investment offers the possibility of fetching higher returns in such prime areas.

Plus, with vacation rentals, enjoy the dual benefit of personal use during off-peak times and earning income when it’s rented out. Imagine owning a property in one of Japan’s top tourist destinations, Hokkaido, and making money when you’re not using it. Efficient, right?

Summer Strategy: Targeting the Construction Boom!

The Niseko area, part of Hokkaido Kuttyan, is still under active development.

However, the winter blankets the region in snow, halting construction efforts.

This compels construction activities to be concentrated in the summer months.

As a result, Niseko witnesses an influx of construction professionals every summer.

Tapping into this demand is the niseko vacation rental investment, particularly with monthly apartment rentals.

Far from the busy Hirafu ski areas but with all essential amenities, it’s a clear winner for longer stays.

Moreover, with the new Shinkansen station developments around Kutchan station, demand for monthly apartments will only soar.

Winter Wonderland: Catering to the Global Ski Enthusiasts!

Come winter, Niseko’s ski resorts become a global hotspot. But, a stay in a Hirafu hotel during peak season doesn’t come cheap.

Prices can touch a whopping $200 per night for an adult. For those who want the skiing experience without the hefty accommodation bill, here’s where Niseko vacation rental investment shines.

Offering great access to the ski resorts and potential stays under $67 per person, vacation rentals in Kutchan downtown are poised for growth.

Especially with increasing visitors at the Kutchan station.

Considering Vacation Rental Investment in Hokkaido? Kutchan Downtown is the Place to Be!

If you’re looking to dive into Niseko vacation rental investment, don’t overlook the potential of Kutchan town in Hokkaido.

With its excellent access to the highly demanded Niseko area, coupled with the development of the Kutchan station due to the new bullet train service, the urban area of Kutchan holds a myriad of opportunities.

With its promising future and current affordability, it’s an opportunity you won’t want to miss.

At our company, we offer flexible operations that can adapt according to the season!

If you’re interested in vacation rental management or seeking consultation on vacation rental investment, please don’t hesitate to contact us!