What are the fee standards for property management companies? What services do they provide?

Okay, no problem. When investing in Japanese real estate, hiring a management company is pretty much standard practice, especially for landlords like us who don't live in Japan. Let me break down what I know in plain language.

---

What are the management company's fee structures?

Talking about fees, it's actually not complicated. It mainly boils down to two big categories: "Monthly Fees" and "One-time Fees". Think of it like hiring a "major-domo" for your property: you pay them a monthly salary, and then give them a project bonus for special tasks.

1. Core Fee: Management Fee (Monthly Fee)

This is the main, ongoing cost.

• Fee Structure: Typically 5% of the monthly rent (+ consumption tax).
• Example: If your property rents for ¥100,000 per month, the monthly fee to the management company would be: ¥100,000 × 5% = ¥5,000 (plus consumption tax on top).
• Explanation: This 5% is basically the "standard rate" in the industry; most reputable companies charge this. If you come across a company quoting 3% or lower, be cautious. Ask if their services are reduced, or if they make up the cost elsewhere.

2. Other Potential Fees (One-time Fees)

These fees aren't monthly; they only occur under specific circumstances.

• Advertising Fee / Brokerage Fee When Finding a Tenant (募集手数料 or 広告料)

  • Fee Structure: Usually 1 month's rent (+ consumption tax).
  • When Paid: When your property is vacant, and the management company successfully finds a new tenant and signs a contract. This fee covers their effort in finding a tenant, including advertising on rental platforms (like SUUMO, HOMES), showing the property, and screening tenant applications.

• Renewal Fee (更新手数料)

  • Fee Structure: Generally 0.5 months' rent (+ consumption tax).
  • When Paid: Japanese rental contracts are typically signed for 2 years. When the contract expires after 2 years and the tenant chooses to renew, the management company handles the renewal paperwork and charges this fee.

• Settlement and Restoration Upon Move-out (退去時精算・原状回復)

  • This isn't a direct fee to you, but it's important: When a tenant moves out, the management company inspects the property. Based on damage and the tenant's responsibility, they calculate the costs needed for repairs and cleaning. This amount is deducted from the tenant's security deposit (敷金), with any balance settled. They coordinate this entire process, saving you the hassle of dealing directly with the tenant and contractors.

To summarize, here's a clearer view in a table:

---

What services do they provide?

What exactly do you get for these fees? Simply put, they handle virtually all the chores a landlord would need to worry about. You can be a relaxed, "hands-off" landlord.

1. Tenant Acquisition Stage (Finding a Good Tenant)

• Rent Pricing: Provide professional rent recommendations based on market conditions to set a competitive yet profitable price.
• Advertising: List your property on major Japanese rental platforms, creating attractive photos and descriptions to draw tenants.
• Showings & Inquiries: Arrange property viewings for potential tenants and answer their questions.
• Tenant Screening: This is crucial! They rigorously screen applicants' backgrounds, employment, and income, and require them to join a "guarantor company" (a company that guarantees the tenant). This minimizes the risk of problematic tenants.
• Contract Signing: Prepare all legal contract documents and sign the lease with the tenant on your behalf.

2. After Tenant Moves In (Daily Management for Your Peace of Mind)

• Rent Collection: Collect rent from the tenant punctually each month, deduct management fees and other expenses, and deposit the net amount into your Japanese bank account.
• Late Rent Collection: If the tenant pays late, they handle the follow-up. Don't underestimate this – chasing rent yourself can be a major headache.
• Tenant "Helpdesk": Tenants contact the management company directly for any issues – like "the AC is broken," "a pipe is leaking," or "noisy neighbors" – not you in the middle of the night. The management company coordinates repairs and handles complaints.
• Bill Payment: Pay mandatory monthly fees like building management fees and repair reserve funds on your behalf (these costs are deducted from the rent you receive).
• Income & Expense Reports: Provide a detailed monthly statement showing rent received, fees paid, and your net income. An annual report is also provided for tax filing convenience.

3. When Tenant Moves Out (Handling the Aftermath, Seamless Transition)

• Move-out Inspection: Inspect the property after the tenant leaves, take photos for documentation, and determine what is normal wear and tear versus tenant-caused damage.
• Settlement: Calculate cleaning and repair costs based on the inspection and settle the security deposit with the tenant.
• Cleaning & Repairs: Arrange professional cleaning and contractors to restore the property to rent-ready condition for the next tenant.

In short, a reliable management company acts like your "stand-in" and "major-domo" in Japan, handling all the hassles related to the property and tenants. For us overseas landlords, that 5% management fee is absolutely worth it. It helps you avoid significant risks and saves you countless hours and energy. Choosing the right property is important, but choosing a good management company is equally crucial!