Well friends, time is flying by! It’s hard to believe it’s already been one year since we opened the doors of Benton Guesthouse on Ōmishima island. We arrived in Japan 21 months ago, and purchased this house 18 months ago, which had been abandoned for 10 years. It’s been 12 months since we started welcoming guests from all over the world. I think this calls for a celebration, and a close look at the first year of numbers and data!
We decided at the beginning of this adventure to become an “open book” resource. After countless hours searching for information on the kinds of things we set out to achieve in Japan, it was clear there were very few success stories to read, and even fewer step-by-step guides. We started sharing our personal experience and almost immediately started getting overwhelmingly positive feedback. It’s pretty clear that this kind of information is needed and appreciated! So, while it takes a lot of time to create data-heavy content like this, I’m happy to do so.
If you prefer to listen to your content, we can read through the blog together with our YouTube video ⌄
For this one-year guesthouse financial update, I’ll be referring heavily to my previous long-form blog Japan Data: “Akiya to AirBnB” General Process & Total Expense to see how the year compares to our initial forecast. We’ll look at income, guest statistics, monthly expenses, additional renovation expenses, and put it all together for a revised timeframe to recoup our investment.
Want to look back to where we started? Before you dive in to my data from the first year of operation, if you’re not familiar with our story, you might want to start at the beginning. It’s still hard to believe that we managed to complete renovation and licensure in six short months, in order to stay on the Startup visa schedule, and achieve Business Manager visa extension approval. But we did it! We poured our heart and soul into transforming an ‘akiya’ from a state of abandonment for over a decade, into our cute little guesthouse.
Some Preliminary Thoughts »
What is Benton Homestead? We’re living in Japan with the Business Manager visa, which means that our residency is essentially tied to the success of our business: Benton Homestead, a Japanese ‘kabushikigaisha’ corporation. We initially received the Startup visa based on our business plan, which includes Benton Guesthouse, honeybees, and natural farming. Our business development has evolved to welcome additional related demands, including to a small extent, real estate consulting and YouTube. We’re also working towards opening our Retro Shop and Roadside Farm Stand, constructing a chicken paradise to welcome a feathered flock, and somehow finding a way to bring my portrait photography back into the mix. I say all that only to illustrate that Benton Guesthouse is very much an essential piece of our business, but it’s not our entire business.
Please let me make one thing clear: Just in case it’s not obvious, this post is educational, and therefore it’s not for the purposes of bragging. When we get into the numbers, you’ll see that I’m quite happy with the results of our first year. But! This guesthouse income (by itself) would not be enough to live comfortably, especially once you consider the other ongoing expenses necessary for living in and operating a business in Japan. We’re working really hard for a 3-year visa at our next renewal (as opposed to our two 1-year visa periods) and in order to achieve that, we need to demonstrate higher income in 2025. Much of that will come from honey sales, which is why our multi-faceted business plan is essential. So, while it’s pretty cool that we will have a full return on our complete guesthouse investment within a pretty short timeframe, that’s not to say that we don’t still need to be very careful with expenses, as we are often spending as much as we make each month on other aspects of our business, and we have to make the most of our small remaining budget. That’s all! Please, proceed.
When did Benton Guesthouse open? After meeting all the license requirements, the listing for Benton Guesthouse was published November 20, 2023. We were delighted to receive our first booking within 6 hours! And we hosted our first guests just 4 days later. I never dreamed our first year hosting in Japan would be so busy!
What sort of rental license does Benton Guesthouse have? We initially received the ‘minpaku’ rental license, then almost immediately decided to upgrade to the full ‘ryokan’ hotel license. So we have experience to compare and contrast both rental license processes.
How did guests find us? Most of our guests were travelers already accustomed to using the AirBnB platform, so they found our guesthouse from searching their listings. But we were pleasantly surprised that 20 of our bookings came from people who follow our YouTube, or follow our Instagram, and booked their trip specifically to come see our house! That’s wild! We take the time to greet each guest personally. But we made sure to set aside extra time to visit with the guests who were familiar with our story, and often met them for dinner. We’ve made many new friends from all over!
Where did guests travel from? The list of countries so far is: Germany, France, China, Switzerland, Denmark, Italy, Spain, The UK, Australia, New Zealand, Czech Republic, Poland, The Netherlands, Norway, Turkey, Singapore, Canada, Mexico, United States, and of course Japan.
80 Total Bookings
- 68 Inbound Travelers (or foreigners with Japanese residency)
- 12 Domestic Travelers (Japanese)
169 Total Guests
- 84 Cyclists
- 77 Driving
- 8 Bus/Ferry/Walking
Booking Group Size
- 2 Guests was our average
- 1 Guest was the smallest
- 6 guests was the largest (current maximum)
- 10 guests will be the maximum, after we add a second bathroom
Booking Trip Length
- 1-night was most common
- 3-night stays were the second-most common
- 2-night stays were the third-most common
- 4-night stays were the longest
Guesthouse Income » November 2023 to November 2024
Here are my numbers:
AIRBNB INCOME: $17,750 (¥2,665,000)
Please note, that for the purposes of this analysis, we will only be considering the AirBnB income. But we also have a teeny tiny amount of other guesthouse-related income [$140 (¥21,150)] which includes the current small Retro Shop inside the guesthouse, and Benton Homestead honey + Hani-san & Chikichan stickers, purchased by guests.
TOTAL INCOME FIRST YEAR OF OPERATION:
$17,750
Let’s look at each month over the course of the year:
Looking back at our financial goals, we set out to earn $2,000 (¥300,000) per month. That figure was determined by our base rate of $135 (¥20,000) per night, with a goal of 15 booked nights per month. If we had achieved that goal for 12 consecutive months, starting the day we opened, our income would have been $23,950 (¥3,600,000). So, our first year’s income of $17,750 (¥2,665,000) did not reach that amount, with a difference of $6,450.
- 4 months exceeded our goal
- 2 months came pretty close to meeting our goal
All in all, I think our projection was pretty accurate!
In this graphic, you can see that our best month was October, at $2,535 (¥380,411). We were quite surprised that our second-best month was August, the notoriously most humid month of the year, at $2,355 (¥354,487). As expected, our slowest month was February, the only month temperatures almost reach freezing, at $225 (¥34,144).
Our first four months (November to February) were all very slow, with only one or two bookings each. But, by the time March rolled around, we were off to the races! I believe there were three main contributing factors to our slower start:
- We opened at the very beginning of winter weather, which is a slow time for tourism in our area. There are still visitors and cyclists in November, December, and January, but the numbers drop off significantly.
- Of course, new rental listings with only a few reviews are generally slower to get bookings, because they haven’t yet built a certain level of trustworthiness.
- We chose the AirBnB platform, primarily because that’s what we used previously, and we were always happy with the service and functionality. However, AirBnB is still relatively new in Japan, so it’s not the most popular travel site with domestic travelers.
Guesthouse Expenses » November 2023 to November 2024
Here are my numbers, broken down into a few categories:
MONTHLY EXPENSES:
$1,650 – Total Monthly Utility Expenses ¥247,404. Average of $138 per month.
- Electric $620 (¥93,228)
- Internet $490 (¥73,656)
- Water $245 (¥37,224)
- Gas $155(¥23,160)
- Kerosene $135 (¥20,136)
ANNUAL EXPENSES:
$75 – Annual Property Tax.
RECURRING EXPENSES:
$150 – Refills for complimentary guest items (coffee, tea, kitchen essentials), toiletries, and cleaning supplies.
ONE-TIME EXPENSES:
$225 – One-Time Property Acquisition Tax. This tax bill comes due one year after the purchase of a property, so we paid this during the course of our first operational year.
ONE-TIME COST OF ‘RYOKAN’ HOTEL LICENSE UPGRADE:
After receiving our ‘minpaku’ rental license, last year, we immediately started working towards the more robust and less restrictive ‘ryokan’ hotel license. If we had gone straight for this license, it could have saved us a lot of time and energy.
$1550 – Judicial Scrivener for ‘Ryokan’ License Application
$750 – Architectural Assessment
$100 – Equipment Required for License Upgrade (Security Camera, Lockbox)
$2,400 – Total
ADDITIONAL GUESTHOUSE IMPROVEMENTS:
$1,500 – This mostly includes summer updates: two heating & air conditioning units installed; front door mosquito screen; cedar platforms for all bedding storage; and a portable air conditioner.
TOTAL EXPENSES FIRST YEAR OF OPERATION:
$6,000
All in all, I thought our monthly and recurring expenses would be a little higher. So I’m pleased with the average monthly utility cost. Our top priority is guest comfort, because happy guests lead to happy reviews, which leads to more guests. During the hot and cold months, I would encourage guests to use the heating and cooling to their level of comfort, but even so, it did not make the utility bills go through the roof. With the additional two new heating & air conditioning units we plan to install next year, monthly costs may even decrease a little bit, due to the higher efficiency of new units.
Data Summary » Crunching the Numbers
Now that we have our first year of data, how long do we estimate it will take to recoup our investment?
Short answer: about two three years.
Our initial investment was $38,000.
Last year, we spent an additional $6,000.
The current running total at the end of 2024 is $44,000.
In 2025, we can expect to spend about $2000 on monthly utilities, property tax, and recurring expenses.
In 2026, we can expect to spend an additional $2000 on the same.
That brings the anticipated Running Total at the end of 2026 to $48,000.
If we anticipate our annual earnings will stay exactly the same next year, at $17,750, then we would break even around 2 years and 9 months. But we expect income to increase, so let’s try to get a bit more accurate.
If we estimate that income will increase next year, due to our consistently high reviews, and adding additional booking platforms (VRBO and Booking), we could potentially anticipate increasing to $25,000 income. With that estimate, we would break even around 2 years and 3 months.
However… we have some additional renovations planned… Which of course will delay the “break even” date. We’ve been planning “Phase 2” renovations from the beginning, which means more expenses. To increase guest comfort, we’ll repair the bathtub for an added amenity, and a few cosmetic bathroom touch-ups. To increase bookings and increase guest capacity, we’ll also have two additional heating & air conditioning units installed, and renovate one small unused room into a second toilet room. Both of these things should increase income.
We don’t have an exact amount for “Phase 2” renovations yet. We’ve been working closely with our Business Consultant and the local City Office to prepare our application for a business subsidy, which helps cover the cost of new established business expansion projects. If we end up receiving this subsidy, that would be amazing, and would allow us to complete Benton Guesthouse improvements much quicker than anticipated, despite our limited budget. With or without the subsidy, we’re looking at somewhere in the ballpark of $5,000-$15,000 additional expenses.
That brings the anticipated Running Total at the end of 2026, with “Phase 2” Renovations, to $53,000-$63,000.
Based on our first year data, I believe the goal of earning an average of ¥300,000 a month can be achieved. That would be 15 booked nights at our average price of ¥20,000 per night. Some stays will have additional guests, increasing the nightly rate, which means fewer booked nights can still reach our goal. For example, if we had reservations for groups of 10 (¥60,000), we could meet our goal with only 5 booked nights each month!
So, it’s very possible that our initial investment of $38,000 will be returned by the end of year two. That would be amazing because my initial forecast was to break even within two years.
Our updated estimate to recoup initial investment + all upcoming expenses is: by the end of year three!
Some Additional Questions » Y’all Are Curious
How does this first year compare to our AirbnB in New Orleans, Louisiana?
Of course, comparing two very different rentals in two very different countries is difficult. But just for fun, we can look at how the first year of Benton Guesthouse compares to our previous AirBnB, which was also a large, private unit with no shared indoor spaces. Our home in New Orleans was a duplex situated on our little urban farm oasis, in the Lower Ninth Ward. The neighborhood was less than ideal in many ways, but it was just a 10-minute drive from the French Quarter. We were one of the only rentals in the city that allowed pets without a major deposit or extra cleaning fee, and of course, we offered a fully-fenced 1/4-acre backyard equipped with chickens, gardens, and all kinds of things for guests’ dogs to sniff. Because of this, we catered to guests traveling with pets, and almost every single booking brought at least one dog.
In this graphic, 2017 to 2021 shows our New Orleans rental income. You can see that bookings really took a couple years to build up momentum. And you can see that our first year of Benton Guesthouse, 2024, is nearly the same amount of income as our best (fifth) year in New Orleans.
Any cultural or demographic differences between running an AirBnB in Japan vs. New Orleans?
Yes, ma’am.
In New Orleans, almost all of our guests were American. I mentioned previously almost every booking brought dogs. Long-distance traveling in the US with public transportation is super rare, especially with pets, so almost every single booking arrived by car. Most guests were coming to New Orleans to have a good time, so they would leave early to explore the city, and come home late. Sometimes they would hire us to dog-sit, which was an added bonus. Almost all dogs were very well-behaved, and we only had a few instances of some nervous doggie damage, digging at the door frame. I wish we could host dogs here in Japan, but the tatami flooring throughout the house is too easily damaged.
One thing we don’t have to worry about in Japan, like we did in New Orleans, was the potential for people to rent our place for a party. We didn’t allow any extra guests besides the number on the reservation, but some people still tried to skirt around it, even though we literally lived on the other side of the wall! Any time a booking came in, and the guest was a resident of New Orleans, or Louisiana, that was a red flag. We got a few wild groups trying to start parties that we actually had to knock on the door and shut down like a couple of big party poopers. The residents of our neighborhood actually had a lot of parties in general, block parties, second line parades, birthday parties with bouncy houses and DJs, New Orleans is just a loud and boisterous place. But this was our home, and I didn’t want to deal with party aftermath.
Another thing we don’t have to worry about in Japan is theft. A fair number of our New Orleans guests were actually moving cross-country with large moving vans or trucks with trailers. This made me extra nervous, because our neighborhood had a lot of potential for crime. We had cameras installed around the property, including the driveway, but fortunately it never became an issue for guests. Here in the Japanese countryside, we don’t even lock our doors, and I’m not at all worried about filling the guesthouse with antiques. Even though guests come from all over the world, almost all of them have been very polite and respectful of our home, furnishings, and time.
What are your thoughts on AirBnB vs. other rental platforms?
I mentioned earlier that we chose AirBnB because it’s the platform we’re most familiar with. Here in Japan, and especially during the time of the Startup visa, it seemed like every single thing we did, every single day, we were learning something new. When it came to creating the listing, I wanted something I was already familiar with! But also, AirBnB has pretty great customer service, and I sense that the popularity will continue to increase in Japan.
We only just recently added Benton Guesthouse to two additional platforms: VRBO and Booking. The listings only went live a few weeks ago, and we only have one booking from each platform so far. I’m testing the waters and going through the learning curve to learn how both new platforms operate, how they handle guest communication, and all the details that are different from AirBnB. I will admit that I want to encourage guests to use AirBnB, for my own preference, so our rates are a little bit higher on the other platforms.
I was hesitant to add other platforms, mostly because of my own fear of getting a double-booking. But after talking with a few other people who host on multiple sites, they assured me that the calendar syncing is pretty reliable. However, I have already had one calendar syncing issue! Our very first reservation with VRBO was for a date that my AirBnB calendar was marked as “check-out only” because we would be in Tokyo. Apparently the calendar syncing only works for reservations and fully blocked dates, not partially blocked dates. Fortunately, the VRBO guest was not upset, and said they will try to stay at our guesthouse another time, because their friend recommended us so highly.
As a side note, I’ve been working to grow our reviews on Google Maps as well. We’ve gotten a handful of phone calls from Japanese travelers, who found our listing by searching the map, and believe it or not, they seem fairly accustomed to booking over the phone! Japan can be a little old school in that regard, which is cool.
How did you feel about the vacancy and turnover rate?
My general consensus is that I’m really happy with our first year numbers! The only aspect I’d like to improve is to encourage guests to stay for more than one night. Cleaning a guesthouse by myself is a lot of work, especially when bookings are back-to-back one-night stays. Some weeks we had 4 or 5 nights in a row of one-night turnarounds.
But maybe even more of a concern than my own workload is the guest enjoyment factor. I can’t tell you how many times guests would express a desire to stay even one more night to explore the islands! Cyclists who ride the Shimanami Kaido bridge network will depart from either Onomichi or Imabari, and are often chasing the sunset to reach Ōmishima in the middle of their journey. They check-in, walk to dinner, relax in the guesthouse, then get up in the morning and ride the second half the next day. A schedule like that might be a lot of fun, and there’s sure to be some beautiful sights, but it doesn’t leave any time to enjoy all the little delights the islands have to offer. Part of the charm is visiting the shrines, meandering the shop-lined streets, popping in to one of any number of family-run businesses, finding that perfect restaurant that only has three tables, picking up some local art, that sort of thing. So, next year, I hope to work more closely with some of the local tourism groups to encourage cyclists to take 2, 3, or 4 nights, to leisurely ride from one end of the Shimanami Kaido to the other.
Well, that ran a little long. But I really enjoy these detailed data blogs and videos. They’re nice for me because I’m not very good at speaking off the cuff, so this way I can write all my thoughts out ahead of time. Also, these are some of our most popular videos! Looking at our YouTube analytics, the two most data-heavy videos(‘Akiya’ to AirBnB Process and the Startup Visa to Business Manager Visa Process) are consistently watched by new viewers every week, even though they were published a year ago!
In conclusion, I hope this answered some of your questions, and was perhaps also mildly entertaining. Please feel free to continue the dialogue and questions in the video comments. I’m more than happy to answer, or if I don’t know the answer, refer you to someone who can help. I’ve said this over and over, but I’ll say it again: moving to Japan, living in Japan, purchasing property in Japan, operating a business in Japan… without working for a major Japanese employer or being married to a Japanese spouse… these things are complicated but not impossible.
Thanks for reading,
ダニとエバン ベントン
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