Choosing the right management company is key to success in real estate investing. A reliable management company has the expertise to handle high-end properties for the wealthy, combined with a careful reporting system. For example, INA & Associates, Inc. specializes in the luxury real estate sector and aims to be "professionals you can trust" with a high degree of privacy protection and a dedicated team of professionals. In this article, we will explain how to confirm the management company's scope of work and track record, how IT and DX are being used, key points to check for fees and reporting systems when signing a contract, and the importance of building a relationship of trust with the management company.
Understanding the Scope of Management Company Services
Management companies provide a wide range of services. A typical scope of work includes the following
-
Contract-related services: Recruiting tenants, guiding tenants through the property inspection process, concluding and renewing lease contracts, and handling cancellation procedures on behalf of tenants.
-
Tenant relations and troubleshooting: General tenant relations, including handling complaints and consultations with tenants, and attending to tenants when they vacate the property.
-
Rent management: We manage rent collection and remittance, reminders to delinquent tenants, etc.
-
Building and facilities management services: Cleaning of common areas, periodic inspections of elevators and fire equipment, maintenance of septic tanks, water quality inspections, and planning of maintenance for the entire building.
-
Other services: Some companies provide value-added services such as statutory inspections and periodic patrol reports on behalf of owners, income and expenditure reports to owners, and asset management proposals (for example, proposals for measures to improve occupancy rates and renovation plans).
The scope of management varies from company to company, and can take the form of "management only," "both brokerage and management," or "brokerage only. A company that also acts as an intermediary is suitable if you want to be entrusted with all aspects of rental management, while a company specializing in management is suitable if you want to concentrate on building management. In either case, it is important to confirm in advance whether the services you wish to request are covered and whether the level of management is appropriate.
How to determine track record and expertise
To select a reliable management company, carefully check its track record and expertise. The first thing to look at is the wealth of management experience. The greater the number of properties and units managed, the more practical know-how the company has accumulated. In fact, it is said that "the more properties a company has handled, the more know-how it should have accumulated. Check whether the company has experience with new or old properties, condominiums, apartments, buildings, and other properties similar to your own.
It is also effective to directly check the current status of managed properties. If there are properties in the neighborhood that the same management company is contracted to manage, talk to the owners and managers, and actually observe the cleanliness of common areas, the presence of weeds, and the operational status of lighting and equipment. You can judge the quality of management by whether the common areas are kept clean and well maintained.
Additionally, a good understanding of the area and property characteristics is also important. A management company that is familiar with the climate and characteristics of the residents in the area where the property is located will be able to respond appropriately to issues specific to the area. For example, freezing measures in cold regions and crime prevention measures in urban areas differ. It is also helpful to check the experience and qualifications (e.g., certified real estate agent) of the person in charge to see if he or she is flexible in making proposals based on the needs of the owner. Obtain this information through the company's website, at information sessions, or by requesting information materials when making inquiries, and compare multiple companies.
Importance of IT tools and DX utilization
In recent years, the property management industry has seen an acceleration of the digital transformation (DX) movement, and the degree to which IT tools are implemented is directly related to the transparency of a management company's operational efficiency and reporting system. For example, "owner apps" offered by IT companies allow monthly and annual income/expense reports that were previously sent by mail to be made available online and shared with owners. This not only reduces the cost of mailing reports, but also makes accounting management more comfortable by allowing both the management company and owner to search and check past income/expense data on the Web. In addition, the application has a variety of functions such as graph display of property occupancy status, chat function, advertisement distribution function, and electronic contract support, enabling real-time information sharing and communication.
The degree to which such IT platforms are utilized is a determining factor in the selection of a management company. On the owner's side, check whether communication with the management company can be completed from a smartphone or PC, and whether you can receive reports online. Companies with advanced systems, such as the availability of prompt repair reporting and approval workflows, and support for electronic tenant recruitment and contracting procedures (web previews and non-personal contracts), are more efficient and reliable. In general, a company that proactively adopts technology is superior in transparency and reliability to a management company that only deals with analog.
Confirm the reporting system and fee structure before signing a contract
Before signing a management contract, be sure to clarify the reporting structure and fee structure. First of all, the management fee is generally determined as a percentage of the total rent, and the market rate is said to be around 5% of the rent income. For example, if the monthly rent is 1 million yen, the management fee is about 50,000 yen. However, the percentage may vary depending on the scope of work and services included by the company. Before signing a contract, also check whether the fee includes common service fees and whether there is a guarantee for late payment or vacancy. In some cases, the rent is based on the "assumed full occupancy rent," so it is important to confirm the specific terms and conditions.
Building a relationship of trust with the management company
A trustworthy management company is one with which you can build a good long-term partnership. When selecting a company, pay attention to the personality of the person in charge, the speed of their response, and the flexibility of their proposals. Even if the work is stipulated in the contract, expressing gratitude to the person in charge for a quick decision to move in or for a smooth resolution of a problem will deepen mutual understanding. As mentioned in the article, the owner's trust in the management company as a "partner" and recognition of the work of the person in charge will lead to increased motivation for the management company.
On the other hand, moderate tension should also be maintained. A firm attitude is also necessary, such as considering termination of the contract if the quality of management deteriorates. Whether or not the company always keeps up a thorough reporting, communication, and consultation process, and whether or not it responds sincerely to questions and requests is an indicator of its level of trustworthiness. Furthermore, in order to determine whether the company can be trusted from a long-term perspective, it is a good idea to confirm in advance the contract term restrictions, cancellation conditions, and arrangements for renewal. Ultimately, it is important for the owner to be aware of the importance of "nurturing" the relationship with the management company, and to make efforts to create a mutually trustworthy system.
Conclusion
The above is a summary of the key points in selecting a management company. The company should have a clear understanding of the scope of management tasks and reporting style, compare multiple companies to confirm their track record and expertise, and pay attention to IT and DX support. Before signing a contract, confirm in detail the fee calculation method and reporting system, and do not hesitate to ask questions if you have any doubts about the terms and conditions. Above all, it is important to identify a "reliable partner" through good communication with the person in charge. INA&Associates Inc. achieves a high level of client satisfaction with its specialized team and thorough information management system developed through its services for ultra-wealthy clients. Based on the perspectives mentioned in this article, find a reliable management company and establish a system that allows you to entrust your real estate management with peace of mind.
