Bulk Internet for condominiumsand apartmentshas been rapidly gaining popularity in recent years. This is a system whereby the entire building enters into a single contract and all tenants have access to Internet service. It is attracting attention as a way for property owners to add value to their properties and for tenants to save on communication costs and simplify procedures.
However, while there are various advantages to installingbulkInternet, there are also disadvantages to consider. This article details the advantages and disadvantages of bulk Internet from the perspective of both property owners and tenants. We will also explain in detail the key points for selecting a vendor and the introduction process for those who are considering the introduction of this system.
We will provide information that will be an appropriate decision-making tool forreal estate owners seeking to strengthen the competitiveness of their properties and improve tenant satisfaction, as well asfor those who are considering moving intoInternet-equipped properties.
What is Bulk Internet?
BulkInternet is a service in which the owner or management association of a condominium or apartment building contracts for an Internet connection for the entire building and provides it to all tenants. In this service, the Internet usage fee is included in the management fee and common service fee, so the tenants perceive the property as having "free Internet".
How Bulk Internet Works
The bulk Internet system is realized by installing fiber-optic or other lines into the building and wiring them to each room. Residents can access the Internet through information outlets and Wi-Fi routers installed in their rooms without having to go through individual contract procedures.
With the conventional individual contract system, each resident has to sign a contract with a provider of his/her choice and pay fees individually. On the other hand,with bulk Internet, theentire building is under one contract, enabling cost reductions through economies of scale.
Types of Bulk Internet
The main types of Bulk Internet are as follows
1.Fiber optic line type - Optical fiber is run to each room for high-speed communication.
2.VDSL type - existing telephone lines can be used inside the building, and can be installed at relatively low cost
3.Wi-Fi for all units: Wi-Fi coverage by installing wireless access points in the building
Basic Comparison of Individual and Bulk Contracts
| Item |
Individual contract method |
Lump-sum contract method |
| Contract Entity |
Individual resident |
Property owner/management association |
| Monthly Fee |
Paid directly by the resident |
Included in management and common service fees |
| Initial cost |
Tenant pays (construction costs, etc.) |
Owner pays (entire building) |
| Freedom of line selection |
High (free choice) |
Low (only designated lines) |
| Procedures at move-in |
Necessary (contract and installation) |
Unnecessary (available on the same day) |
| Procedures when moving out |
Necessary (cancellation procedures) |
Not required |
| Estimated charge (monthly) |
Approx. 4,000 yen to 6,000 yen |
Actual 1,000 yen to 2,000 yen |
Advantages for property owners
There are a wide range of benefits thata real estate ownercan gain by introducingbulk Internet for condominiums. From strengthening the competitiveness of properties to improving long-term profitability, it is worth considering from a variety of perspectives.
Adding value and differentiating your property
The Internet has become an essential infrastructure in modern life, and the added value of "free Internet" has become an important factor in property selection decisions. Especially for properties targeting young adults and single person households,the fact that the property is equippedwith internet accessis a major differentiating factor.
Free Internet" is also a major search criteria on real estate portal sites, increasing the likelihood of appearing at the top of searches. This will increase exposure of the property and lead to an increase in inquiries from prospective tenants.
Improved occupancy and occupancy rates
Properties withbulk Internettend to have higher occupancy rates than properties with similar conditions. Having an Internet environment in place has the effect of encouraging prospective tenants to make a decision. In addition, improved tenant satisfaction leads to long-term occupancy, which contributes to shorter vacancy periods and lower move-out rates.
Impact on Rent Setting
The added value of free Internet may enable slightly higher rents compared to the surrounding market. For tenants, the total cost is lower than individual contracts, so adding a portion of the cost to the rent is appealing enough.
Contribution to long-term profitability
Although initial investment is required, in the long run, stable profitability can be expected by strengthening the competitiveness of the property and improving the occupancy rate. Especially for older properties, it is an effective means of increasing property value at a lower cost than large-scale renovations.
Introduction Cost and Payback Simulation
| Item |
Small-scale property (10 units) |
Medium-scale property (30 units) |
Large-scale property (100 units) |
| Initial Installation Cost |
500,000 - 800,000 yen |
1,000,000 to 1,500,000 yen |
2 million yen to 3 million yen |
| Monthly operating cost |
30,000 yen to 50,000 yen |
80,000 yen to 120,000 yen |
200,000 yen to 300,000 yen |
| Monthly cost per unit |
3,000 yen to 5,000 yen |
2,700 yen to 4,000 yen |
2,000 - 3,000 yen |
| Possible amount of rent add-on (approximate) |
2,000 yen to 3,000 yen |
2,000 - 3,000 yen |
2,000 yen to 3,000 yen |
| Investment payback period |
Approx. 2 to 3 years |
Approx. 1.5 to 2 years |
Approx. 1 to 1.5 years |
The above is a general guideline and will vary greatly depending on the structure of the building and the condition of existing facilities.
Advantages for Residents
Bulk Internet in condominiumshas many advantages for tenants. In addition to the economic benefits, the increased convenience is also a major attraction.
Reduction in monthly communication costs
When contracting for individual Internet access, the monthly fee for an optical fiber connection generally costs 4,000 yen to 6,000 yen. With bulk Internet, on the other hand, this cost is included in the management fee and common service fee, so the actual burden is greatly reduced. In many cases, even taking into account the amount added to the management fee, the monthly fee saves about 1,000 yen to 3,000 yen more than usual.
Simplified move-in procedures
With individual contracts, you need to go through the contracting process with the provider and schedule the installation work when you move in.With whole-house Internet, these procedures are completely unnecessary, and you can start using the Internet on the day you move in. This is a big advantage in the complicated procedures involved in moving into a new house, as it eliminates this hassle.
Convenience of same-day use
By being able to use the Internet immediately after moving in, you can start your life at your new location immediately. This immediacy is especially important for those who use the Internet for work or for those who use video streaming services on a daily basis.
No need for cancellation procedures when moving
Since there is no need to cancel the Internet service when moving out, the burden of moving is reduced. There is also no risk of double payment due to forgotten cancellation.
Comparison of Monthly Cost between Individual and Bulk Contracts
| Cost Items |
Individual Contracts |
In case of lump-sum contract |
| Internet Monthly Fee |
4,000 yen to 6,000 yen |
0 yen (included in the management fee) |
| Management and common service fees added on top of the management fee |
0 yen |
1,000 yen to 2,000 yen |
| Initial cost (administrative fee, etc.) |
3,000 yen to 10,000 yen |
0 yen |
| Installation fee |
0 yen to 15,000 yen |
0 yen |
| Risk of cancellation fee |
Yes |
No |
| Actual monthly cost (total) |
4,000 yen to 6,000 yen |
1,000 yen to 2,000 yen |
| Annual savings |
-24,000 yen to 48,000 yen |
24,000 yen to 48,000 yen |
Disadvantages of Bulk Internet Installation
While there are many advantages tobulk Internet for condominiums, there are also disadvantages that should be considered from the standpoint of both property owners and tenants. These disadvantages should also be fully understood when considering the introduction of this system.
Demerits on the real estate owner's side
Burden of initial investment
Introducing bulk Internet requires an initial investment in wiring and equipment installation for the entire building. Depending on the size of the property, even a small condominium may cost more than ¥500,000, and a large condominium may cost several million yen. It takes a certain period of time to recover this initial investment.
Binding by long-term contract
Mostwhole-house Internetservices are based on long-term contracts of three to five years. During this period, it is difficult to change or cancel the contract, and penalties may be incurred. In the rapidly changing Internet environment, being tied to the same service for a long period of time can be a risk.
Operation and maintenance
Even after installation, there is a certain amount of operation and maintenance work required, such as responding to inquiries from tenants and coordinating with contractors in case of problems. In particular, complaints from tenants may be directed to the management company or owner in the event of line trouble.
Disadvantages for tenants
Limitations on line speed and quality
Bulk Internet, because the line is shared within the building, may experience slowdowns during times of high user traffic. This can be particularly frustrating for tenants who engage in large volume data transmission, such as watching videos or playing online games.
No choice of providers or lines.
Unlike individual contracts, you are not free to choose the type of provider or line. This can be a constraint for those who are particular about a particular service or need a specific line environment for work-related reasons.
Actual cost burden
Even if "free internet" is claimed, in many cases it is actually added to the management fee or rent. For tenants who rarely use the Internet, they are bearing unnecessary costs.
Disadvantages and Countermeasures
| Disadvantages |
Countermeasures |
| Burden of initial investment |
Get quotes from multiple vendors and compare
Consider using subsidies and grants |
| Binding due to long-term contracts |
Confirm contract details in detail and clarify mid-term cancellation conditions.
Include renewal clauses that can accommodate technological innovations. |
| Operation and maintenance |
Select a vendor with a strong support system.
Clarify the division of roles with the management company. |
| Limit line speed |
Ensure sufficient bandwidth for the number of residents
Regularly measure speed and increase as needed |
| Limit choice |
Select lines that are compatible with major services
Establish a system that allows individual contracts as an option |
| Substantial cost |
Clearly explain the amount added to administrative costs
Provide comparative data with actual market prices |
Bulk Internet Installation Process
When considering the introduction ofbulkInternet incondominiums, it is important to proceed systematically. Below is an explanation of the implementation flow and points to consider at each stage.
Considerations before Installation
When considering the introduction of Internet, first check the following points:
1.The size and structure of the property (number of units, number of floors, building structure)
2.Status of existing wiring facilities (telephone lines, TV co-viewing facilities, etc.)
3.Needs of the resident population (age range, Internet usage trends, etc.)
4.Available investment budget and payback plan
5.Facilities in the surrounding area (differentiation from competing properties)
Organizing this information will help you make a decision on the best service type and vendor selection.
Key points for vendor selection
The following are points to consider when selecting a vendorfor whole-houseInternet
1.Service area and track record - Does the company have a strong track record of installation in the target property area?
2.Line quality and speed - Effective speed and stability of the line provided.
3.Support system - Is the service available 24 hours a day?
4.Contract terms and conditions - contract term, cancellation terms, and transparency of the fee structure.
5.Future scalability - ability to respond to technological innovations, upgrade conditions
It is important to obtain quotes from multiple vendors and compare the above points comprehensively, not just price.
Installation Flow and Timeframe
The general flow of installation work is as follows:
1.On-site survey - Confirmation of building structure and existing facilities
2.Design and plan finalization - Determination of wiring route and equipment installation location
Notification to tenants - informing them of construction schedule and temporary restrictions on use
4.MDF room construction - Installation of lines into the building and installation of the main equipment
5.Common area wiring work - laying wiring to each floor
6.In-unit construction - installation of information outlets in each room
7.Operation check and adjustment - Connection test and speed confirmation in all houses
8.Briefing for residents - Explanation of usage and precautions
How to guide residents
After the introduction of the system, it is important to clearly provide the following information to residents
1.Service start date and scope of availability
2.Connection method and initial setup procedure
3.Where to inquire in case of trouble
4.Precautions for use (prohibited items, etc.)
Especially for properties with existing tenants, careful explanation is necessary to minimize confusion caused by the service switchover.
Steps to introduction and approximate timeframe
| Steps |
Contents |
Estimated Timeframe |
| Information gathering and review |
Comparative study of each company's services |
1 to 2 months |
| Vendor selection |
Obtain quotes, compare and consider, and decide on a vendor |
2 weeks to 1 month |
| Contract signing |
Confirmation of contract details, conclusion of contract |
1 to 2 weeks |
| Site survey |
Building survey, design plan preparation |
2 weeks to 1 month |
| Tenant notification |
Notification of construction schedule, briefing session |
2 weeks to 1 month prior to construction |
| Installation work |
MDF room construction, common area construction, individual unit construction |
1 week to 1 month |
| Operation check and adjustment |
Connection test, speed check |
1 to 2 weeks |
| Start of service |
Briefing for residents, start of service |
-1 to 2 weeks |
*Duration varies greatly depending on the size of the property and existing facilities.
Summary
Bulk Internet for condominiumsis a capital investment that benefits both property owners and tenants. The following is a summary of the main points explained in this article.
Main benefits for property owners
1.Differentiation of the property and enhancement of competitiveness - As the property is differentiated as a property with free Internet access, inquiries from prospective tenants can be expected to increase.
2.Improved occupancy and occupancy rates - The facility will be more attractive to tenants, leading to lower vacancy rates and longer tenancy.
3.Flexibility in rent setting - Rent can be set according to the added value, which is expected to increase profitability.
4.Prospects for investment payback - Although initial investment is required, in many cases it can be recovered in 1 to 3 years, contributing to long-term profitability.
Main benefits for tenants
1.Reduction of communication costs - Compared to individual contracts, annual savings of 20,000 to 50,000 yen can be expected.
2.Simplified procedures - No need to sign a contract when moving in or cancel when moving out.
3.Convenience of same-day use - Internet access is available on the same day you move in, making it easy to start up your life.
Points to keep in mind when introducing the service
1.Importance of vendor selection - It is necessary to make a comprehensive comparison, not only on price, but also on line quality and support system.
2.Confirmation of contract terms - Since long-term contracts are the basic policy, it is important to confirm contract terms and cancellation conditions in detail.
3.Explanation to tenants - Careful explanation of usage and restrictions at the time of installation and upon moving in can prevent problems.
Next Steps.
For property owners who are considering installingbulkInternet inall units, it is recommended that they first obtain quotes from multiple vendors and compare them. For properties with existing tenants, it is also effective to understand their needs through preliminary questionnaires.
Tenants should check the details of "free internet" when selecting a property. It is important to determine if the type of line, speed, and whether there are any restrictions on use, etc., are suitable for your lifestyle.
INA&Associates Inc.also provides consulting services forreal estate ownersto installbulkInternet incondominiums. Please feel free to contact us for the best plan to suit your property's characteristics and tenant demographics.
Frequently Asked Questions (FAQ)
Q1:How long is the contract period for bulk Internet?
A:Thetypical contract term is 3 to 5 years. It varies from vendor to vendor, but long-term contracts are the standard. When renewing a contract, we recommend that you check the latest technological trends and fee plans, and review them as necessary. It is important to check the contract cancellation terms in detail before signing, as there are often penalties for mid-contract cancellations.
Q2: Is it possible to retrofit the system to an existing property?
A: Yes, itis possible. Although the difficulty and cost of installation will vary depending on the existing building structure and wiring facilities, in most cases, retrofitting is possible. In particular, if the existing TV co-viewing equipment and telephone line equipment can be used, the installation can be done relatively smoothly. However, in older buildings, securing wiring space in the building may be an issue.
Q3: Is there any way to deal with slow connection speeds?
A:The following measures can be taken to deal with line speed problems:
1.Increase bandwidth - increase the bandwidth of the line you are subscribed to (additional costs may apply).
2.Upgrade equipment - update old equipment and wiring to the latest version.
3.Set usage rules - set restrictions on certain times of the day or certain usage methods.
4.Provide individual line options - offer residents who need high-speed communication the option of individual lines for an additional fee.
If speed problems are chronic, it is important to consult with the vendor and take appropriate measures.
Q4:Can a resident sign up for a separate Internet line?
A:Basically, it is possible. Even if bulk Internet is installed, there are no restrictions on tenants individually subscribing to different lines. However, depending on the building structure and management regulations, there may be restrictions on the construction of a new line opening. Also, it should be noted that the economic benefit to the resident is diminished because of the double cost.
Q5: What is the market price for installation costs?
A:Installation costs vary greatly depending on the size and structure of the property and the service selected:
-Small-scale properties (about 10 units): about 500,000 to 800,000 yen
Medium-scale property (approx. 30 units): 1,000,000 to 1,500,000 yen
Large-scale properties (100 units or more): 2 million yen to 3 million yen or more
In addition to this, there is a monthly operating cost. The more units there are, the lower the cost per unit tends to be. Costs also vary depending on the degree of utilization of existing facilities and the difficulty of construction. We recommend that you obtain quotes from multiple vendors and compare them.