Three years ago I collected four quotes for a bathroom renovation on one of my rental units, and the spread shocked me: 380,000 yen from an unlicensed handyman crew, and 890,000 yen from a fully licensed contractor for what looked like the same scope of work. I almost went with the cheap option. I did not, and that decision alone saved me roughly 1.2 million yen in avoided repair costs over the following two years.
After managing 9 properties myself for more than 15 years, I have learned that comparing quotes is not just about the bottom line. Here is exactly how I evaluate licensed versus unlicensed bids before I sign a single contract.
Why I check the license number before I even open the quote
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In Japan, any construction job worth 5 million yen or more legally requires a contractor holding a kensetsugyo kyoka (construction business license), but plenty of smaller jobs, like a 400,000 yen kitchen reface, fall under that threshold and attract unlicensed operators. My first move with any new contractor is to ask for their license number and cross check it on the prefectural registry. It takes about 10 minutes online. Roughly 1 in 4 unlicensed crews I have vetted over the years either had no verifiable business registration at all or borrowed a license number from a friend’s company, which is a legal problem waiting to land on my desk, not theirs. I also ask how long the company has held that license, because a registration issued 2 months ago tells me a lot less than one that has been active for 8 years without a suspension on record.
The line items I compare beyond the bottom number
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A cheap total price hides a lot of decisions. When I lay two quotes side by side, I look at four things specifically: the brand and grade of materials listed, whether demolition and disposal fees are itemized separately, the warranty period offered, and how many workers will be on site each day. On that bathroom job, the 380,000 yen quote used a no-name toilet and left disposal out entirely, which would have added another 60,000 yen once the old tub was hauled away. The licensed contractor’s 890,000 yen quote included a 10 year warranty on waterproofing work, which mattered a lot given how often water damage claims come up in older units.
My pre-signing checklist
Before I approve any renovation contract now, I run through the same short list every time:
- Confirm the license number matches the company name on the quote
- Ask for proof of liability insurance covering at least 10 million yen
- Request an itemized breakdown, not just a lump sum
- Get the payment schedule in writing (I never pay more than 30 percent upfront)
- Check for at least 2 references from jobs completed in the last 12 months
This checklist takes maybe 30 minutes per contractor, but it has stopped me from signing at least 3 contracts I would have regretted.
What happened the one time I gambled on an unlicensed crew anyway
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I have not always followed my own rules. Five years ago I hired an unlicensed pair to re-side a rental property for 620,000 yen, well below the 1.1 million yen licensed quote. The siding looked fine for about 8 months, then started separating at the seams after the first typhoon season. Fixing it properly cost 340,000 yen in repairs plus a tenant complaint I had to smooth over with a partial rent reduction. In the end that cheap job cost more than the licensed quote would have, and it cost me a tenant relationship too. Worse, when I called the same unlicensed pair back to make it right, they had already changed their phone number, and I never did track down who to bill for the redo. That is the risk that a license, and the paperwork trail behind it, is designed to prevent.
How much more a licensed contractor really costs
Across the renovation jobs I have tracked on my properties, licensed contractors run about 25 to 45 percent higher than unlicensed crews for comparable scope. That gap narrows for straightforward cosmetic work, like repainting a stairwell, where I am comfortable using a vetted unlicensed handyman I have worked with for years. It widens sharply for anything touching plumbing, electrical, or structural work, where a mistake can trigger a far larger bill later, or worse, a safety issue I would be liable for as the property owner. On a recent kitchen rewiring job across 2 units, the licensed quote came in at 540,000 yen against an unlicensed 410,000 yen bid, and I paid the difference without hesitation once I realized the unlicensed bid did not include a final inspection sign-off, something I need on file if I ever sell the building.
Where I still use unlicensed help
To be fair, not every job needs a license. I regularly hire an unlicensed handyman for small jobs under 100,000 yen, like fixing a fence panel or replacing a door handle, because I have watched his work over dozens of jobs and he carries his own insurance even without a formal construction license. The rule I apply is simple: the bigger the job and the higher the risk if it fails, the more the license and insurance paperwork matters, and the less I let price alone decide.
That is the approach I use across all 9 of my properties: compare quotes line by line, verify the license before the price, and never let a 200,000 yen discount talk me out of a warranty that actually protects me.
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15 years of landlord experience u00b7 3 apartment buildings u00b7 DIY renovations that saved millions of yen. Browse all articles at diytosan.com
