What does a management company do? Role and daily operations of a property management company

Many property owners may wonder, "What does a management company usually do?" Many property owners may wonder, "What does a management company usually do? It is natural to feel that it is difficult to see the specifics of what they do, even though they are entrusted with the property. In reality, however, property management companies perform a wide variety of tasks to facilitate rental management on behalf of owners on a daily basis. In this article, we will explain the basic role of a property management company, the specific details of daily and monthly operations, and the importance of repair arrangements and risk handling in an easy-to-understand manner. To make it easy for even beginners to understand, we will explain in detail, avoiding jargon as much as possible. Let's take a look at the actual work of a management company.

Basic Role of a Property Management Company

The basic role of a property management company is to manage and operate rental properties on behalf of their owners. Specifically, the company undertakes many tasks all together, from recruiting tenants if there are vacancies, to contracting procedures, dealing with tenants, building maintenance, reporting to the owner, and managing income and expenditures. The management company acts as a bridge between the owner and tenants, and can be said to be a partner in supporting smooth rental management.

In fulfilling this role, it is particularly important to build a relationship of trust. A relationship of trust between the owner, tenants, and management company is the foundation for stable rental management. Proven management companies have earned this trust through honest communication and transparency of information, which in turn leads to increased long-term asset value. INA, for example, is one example of a company committed to transparent management through the use of technology. By thoroughly disclosing information, such as sharing cleaning photos and inspection reports with owners via an online system, INA makes "invisible management" visible, thereby enhancing a sense of security and trust. In this way, the management company is not merely a business agent, but also a good companion in protecting and nurturing the owner's valuable assets.

Daily operations: Payment confirmation, response to inquiries, on-site patrols

The main daily tasks (daily operations) performed by the management company include the following

• Payment confirmation (rent control): Checks the status of rent and common-area maintenance fees received from tenants. Checks to see if the rent is paid correctly by the set due date each month, and if there is any delinquency, promptly responds to the tenant with a demand. It is not uncommon for rent payments to be delayed due to forgotten payments or insufficient balances, in which case the management company will contact the tenant on the owner's behalf to encourage early payment. Through this kind of payment management, owners can ensure a stable income.

• Handling of inquiries and complaints: As a contact point for tenants and neighbors, we handle a variety of inquiries and complaints on a daily basis. Typical examples include "noisy neighbors," "equipment malfunction," and "I need advice on how to dispose of garbage. In some cases, the management company has a 24-hour emergency contact number and will respond quickly to sudden equipment or noise problems. Delayed response can lead to tenant dissatisfaction and eviction from the property, but careful and quick response keeps tenants feeling secure and helps to maintain the property's reputation.

• On-site patrols and inspections: We regularly patrol managed properties to check the condition of buildings and common areas. We check to make sure that garbage disposal areas, hallways, and entrances are kept clean, that there are no problems with lighting or equipment, and that there are no abnormalities. These daily patrols and inspections are important to detect small defects at an early stage and deal with them before they become major problems. We also maintain safety by properly carrying out statutory inspections of fire and security equipment attached to the building. For example, if a light bulb in a common area is found to be out, we promptly make arrangements to replace it, and the accumulation of detailed responses leads to a comfortable life for residents.

These daily tasks may seem unglamorous at first glance, but they are indispensable for maintaining a good environment in rental housing. Because the management company works carefully behind the scenes, tenants can live comfortably and owners can feel secure in entrusting their properties to us.

Monthly operations: rent remittance, preparation of owner reports, and income/expense management

In addition to day-to-day management tasks, there are also tasks that are performed on a regular monthly basis (monthly operations). The main management company tasks that occur each month include the following

• Rent remittance: The management company, as a collection agency, pools the rent received from tenants and remits it to the owner's account at a time specified in the contract (e.g., on the X date of each month). This eliminates the need for the owner to collect rent from each tenant, and ensures that income is received. In the past, most management companies generally remitted rent to the owner the month after collecting it from tenants. Recently, however, there have been attempts to eliminate the time lag in remittance. For example, INA has introduced a system in which rent is transferred directly from the tenant (or rent guarantee company) to the owner's account, so that the owner can receive rent income as soon as possible. This system reduces owner anxiety about whether rent will be received properly and leads to a sense of trust.

• Preparation of owner's report (monthly report): Another important task is to prepare and send a report for owners summarizing monthly income and expenditures. The report will clearly state the rent received and collected for each room, expenses such as management fees and repair costs incurred during the month, whether there are any vacancies or delinquencies, and the contract renewal schedule for the following month and beyond. A reliable management company will prepare these monthly reports so that the owner can keep track of the property's management status at hand. The transparency of the breakdown of income and expenses will eliminate the anxiety of not knowing what is going on because the property is left in the hands of the management company.

• Income and expenditure management and asset management support: In addition to managing monthly income and expenses, the management company also provides advice on income and expenditure planning throughout the year. For example, they may advise on financial planning, such as how much should be set aside each month for future large-scale repairs, or how to secure funds for payments of fixed asset taxes, etc. In some cases, the management company may also play a consulting role in maintaining and improving asset value by, for example, proposing rent revisions as necessary based on local rent rates and market trends. Management companies do not simply handle accounting work on behalf of their clients; they also provide support in terms of income and expenditures as a partner in ensuring the long-term success of their owners' real estate investments.

With a management company that performs monthly operations properly, the owner can rest assured that he or she will receive a set monthly report and can keep track of the property's status. Even those who are not good at managing numbers will be able to maintain sound rental management with professional support.

Importance of repair arrangements and risk management

Real estate management involves unexpected problems and long-term challenges. Repair arrangements and risk management are especially important points when hiring a property management company.

First, let's look at repair arrangements. Buildings and facilities gradually become defective as they deteriorate over time and through daily use. For example, when a water heater or air conditioner malfunctions, a water leak occurs, or a building wall cracks, the management company acts as a contact point and arranges for an appropriate contractor. The management company handles the entire process on behalf of the owner, including confirming the details of the repair, obtaining an estimate, reporting to and receiving approval from the owner, adjusting the work date, and checking the work after completion, saving the owner the trouble of having to deal with the problem himself/herself. In particular, equipment problems directly affect the lives of tenants, so speedy repair responses are required. The management company has a network of partner companies and is ready to respond quickly in case of emergency. In addition, when small defects are discovered during daily patrols, they are repaired or replaced as soon as possible to prevent the problem from spreading. Furthermore, from a long-term perspective, regular inspections of properties and planned maintenance (planning and execution of long-term repair plans) are also important tasks for management companies. Periodic building health inspections are conducted and, if necessary, the timing of large-scale repair work (e.g., exterior wall painting and rooftop waterproofing) is planned. By not neglecting such repair work, the asset value of the building can be maintained and improved, and complaints from tenants can be reduced.

Next is risk management. There are a variety of risk factors involved in rental management, and a management company can be a reassuring presence in times of "emergency. One example is responding to disasters and accidents. In the event of building damage caused by a typhoon, flooding due to heavy rain, fire, earthquake, or other unforeseen circumstances, the management company will receive an emergency call and move quickly. The company will promptly take necessary actions such as checking the damage, arranging for first aid, ensuring the safety of tenants, contacting insurance companies, and supporting notification to government authorities, and will report the situation to the owner. Some reliable management companies have call centers that are available 24 hours a day, 7 days a week, 365 days a year, and can be reached with a single phone call, even during the night or on holidays. INA also operates a 24-hour call center exclusively for tenants. This prompt response (i.e., high level of responsiveness) leads to a sense of security for tenants, and is a great source of reassurance for owners when entrusting their properties to us.

Another important role of a management company is to respond to the risk of vacancy. A prolonged vacancy directly affects the owner's income, so the management company will do its utmost to secure the next tenant as soon as possible when a vacancy occurs. Specifically, the company will review the rent setting, strengthen advertising, and encourage brokers to close the contract as soon as possible. Depending on the real estate market, it may take some time to find new tenants, but you can rest assured that the management company will provide you with regular reports on the status of the vacancy and, if necessary, suggest changes to the conditions of the property. In addition, the aforementioned enhanced tenant support will also be a measure against vacancy risk in the long run. If you can reduce the vacancy rate by increasing tenant satisfaction on a daily basis, you can reduce the frequency of vacancies themselves. In this way, the management company deals with vacancy risk from the two aspects of "the ability to recruit tenants" and "the ingenuity to make tenants live in the property for a long time.

Finally, it is important to mention other risks such as legal changes and contract disputes. There are many situations in rental management that require expertise, such as responding to changes in laws and ordinances related to lease contracts (reviewing contracts, arranging for corrective work, etc.), supporting legal procedures when tenants fail to pay rent when they are not under contract with a rent guarantee company, dealing with neighborhood problems, and coordinating settlement of deposit disputes when tenants move out. There are no small number of situations that require expertise in rental management. A good management company will support the owner in these situations by utilizing its experience and knowledge to deal with the situation appropriately. In the event that legal action is required, the company will work with lawyers and other professionals to resolve the situation, and will be there for you from a professional standpoint to deal with risks that would be difficult for the owner to handle on their own.

In summary, a management company is a reliable partner.

As we have seen, property management companies work behind the scenes of property management, performing detailed day-to-day operations, managing regular income and expenditures, and handling risks with a comprehensive view to the future. By outsourcing these tasks to professionals, owners are freed from complicated operations and can focus on securing a stable income with peace of mind. Entrusting these tasks to a management company with a proven track record and trustworthiness is an important key to a successful real estate investment.

There are many management companies, including INA, that are known for their reliability and responsiveness. They are sure to realize rental management that you will be glad you entrusted them with, thanks to their accurate business operations backed by a wealth of experience and their meticulous service to both owners and tenants. If you are not sure which management company to choose, please find one that you can trust as a partner by paying attention to their business content, track record, and courteous response. They will be a reassuring ally in protecting and nurturing the owner's valuable real estate and will surely be of assistance.