Ultimate Guide to Real Estate Management: Roles, Qualifications, and Trends

For those considering real estate investment or rental property management, understanding the real estate management industry is of utmost importance. Many property owners entrust their daily management operations to specialized management companies, whose responsibilities range from tenant relations to building maintenance.

In this article, INA&Associates Co., Ltd. will provide a detailed explanation of the basic concepts of real estate management, specific job responsibilities, required qualifications, and the latest industry trends. This information is designed to provide practical knowledge for those considering a career transition into the real estate management industry or property owners seeking to select a management company.

What is Real Estate Management?

Real estate management is a specialized service that involves managing and operating properties on behalf of property owners.It targets various types of real estate, including apartments, office buildings, commercial facilities, and single-family homes, with the goal of providing a living environment that satisfies both owners and tenants.

In today's real estate market, many owners engage in real estate investment while maintaining their primary business, making it common to outsource daily management tasks to specialized companies. This is especially true for owners with multiple properties or properties located in remote areas, where the presence of a management company is indispensable.

The primary objective of real estate management is to maintain and enhance the asset value of properties while ensuring stable rental income. This maximizes the investment returns for property owners while providing tenants with a comfortable living environment.

The Social Role of Real Estate Management

Real estate management goes beyond mere administrative tasks, playing a crucial role in stabilizing the housing market. Through proper management, the lifespan of buildings is extended, contributing to the improvement of the local living environment.Furthermore, it supports the healthy development of the rental market by preventing and quickly resolving disputes between tenants and owners.

In recent years, with the aging of society, there has been an increase in owners who are unfamiliar with property management after inheriting real estate, and the demand for professional management services is growing.

Main duties of real estate management

Real estate management can be broadly categorized into two categories: “rental management” and “building management.” We will explain each of these in detail.

Leasing Management Services

Leasing management encompasses all tasks related to tenants, acting as an intermediary between property owners and tenants to facilitate various adjustments.

1. Vacancy Management and Tenant Recruitment

Reducing vacancy periods is a critical task directly linked to property owners' revenue. Management companies analyze market trends and propose appropriate rent settings. They also take photos to highlight the property's appeal, create property documents, and list the property on real estate portals.

Effective recruitment activities require a clear understanding of the target demographic. We develop and execute recruitment strategies tailored to the property's characteristics, such as targeting singles, families, or seniors.

2. Tenant screening and contract procedures

Screening prospective tenants is extremely important from the perspective of preventing future problems. We assess the suitability of tenants from multiple perspectives, including verification of income certificates, confirmation of employment, and screening by a guarantor company.

During the contract process, we prepare and explain important documents, conclude lease agreements, and provide information on fire insurance, ensuring that all legal requirements are met.

3. Rent management and delinquency response

Monthly rent collection is the foundation of property management. We offer payment methods that consider the convenience of tenants, such as bank transfers and credit card payments.

In cases of delinquency, we implement a step-by-step collection process. Initially, we send reminders via phone or in writing, and if necessary, we collaborate with guarantor companies. In severe cases, we may take legal action.

4. Tenant Support and Complaint Handling

Prompt and appropriate responses to tenant inquiries and complaints contribute to improving tenant satisfaction and promoting long-term tenancy. Many management companies have a 24/7 response system in place to handle various issues such as equipment malfunctions, neighborhood disputes, and problems with common areas.

In particular, regarding neighborhood disputes, we act as a neutral mediator to propose solutions and strive for a peaceful resolution.

Building Management

Building management involves tasks related to the physical maintenance and upkeep of the property.

1. Daily and Regular Cleaning

Cleaning of common areas is an important factor that affects the first impression of the property. Regular cleaning is conducted in areas that residents use on a daily basis, such as the entrance, hallways, stairs, elevators, bicycle parking area, and garbage disposal area.

Cleaning services include daily cleaning (approximately once or twice a week) and regular cleaning (detailed cleaning approximately once a month), which are conducted at appropriate frequencies based on the property's size and characteristics.

2. Equipment Inspection and Maintenance

We conduct mandatory and voluntary inspections of various building facilities. For specialized equipment such as elevators, fire safety systems, electrical systems, plumbing systems, and HVAC systems, we regularly perform inspections by qualified professionals.

From a preventive maintenance perspective, we will replace parts or make adjustments before malfunctions occur to minimize the impact on residents caused by sudden breakdowns.

3. Planning and Implementation of Repair Work

We will carry out planned repair work to address the aging of the building. This includes large-scale repairs such as exterior painting, roof waterproofing, and replacement of water supply and drainage pipes, as well as small-scale repairs, all tailored to the condition of the property.

When carrying out repair work, we obtain estimates from multiple contractors and select the most cost-effective option. We also place great importance on minimizing disruption to residents during the construction period.

4. Development of Long-Term Maintenance Plans

We predict future maintenance needs for the building and develop long-term maintenance plans. Based on these plans, we set and review maintenance reserve funds to support the owner's financial planning.

An appropriate long-term maintenance plan enables the asset value of the building to be maintained over the long term.

Differences from Property Management (PM)

Property Management (PM), which has gained attention in recent years, is a management approach that provides more comprehensive services than traditional real estate management.

Differences from Traditional Management Services

Item Traditional Management Property Management

Role Mediator between owners and tenants Agent for owners

Scope of Services Routine management tasks Strategic asset management

Revenue responsibility Limited Responsibility for maximizing revenue

Proposal capability Reactive Proactive and strategic

Compensation structure Fixed fee-based Includes performance-based compensation

Property Management goes beyond mere management services, providing strategic proposals aimed at enhancing the profitability of properties. This requires advanced expertise in areas such as optimizing rent settings, renovation proposals, and improving tenant mix.

Specific details of PM operations

Property managers provide comprehensive services aimed at improving the owner's return on investment (ROI), including rent setting based on market analysis, differentiation strategies from competing properties, and proposals for capital investment to improve occupancy rates.

In addition, they prepare regular income and expense reports to visualize the property's revenue status and support the owner's decision-making.

Qualifications and legal requirements for real estate management

We will provide a detailed explanation of the qualifications that are required and recommended for operating a real estate management business.

Legally required registration and qualifications

Registration as a rental housing management company

Under the Rental Housing Management Act, which came into effect in June 2021, rental housing management companies with 200 or more managed units are required to register with the Minister of Land, Infrastructure, Transport and Tourism. This registration system aims to enhance industry transparency and consumer protection.

The registration requirements are as follows:

Requirement Details

Number of managed units Manage 200 or more rental properties

Business manager Assign a business manager to each business office

Registration validity period 5 years (renewable)

Requirements for business managers

Real estate management companies must assign a business manager to each business office. To qualify as a business manager, one of the following requirements must be met:

1. Certified Real Estate Property Manager
2. Holders of the Real Estate Broker license with at least two years of practical experience in rental housing management
3. Individuals with at least two years of practical experience in management operations and who have completed training programs designated by the Minister of Land, Infrastructure, Transport and Tourism

Qualifications Useful for Business Operations

We introduce qualifications recommended for effectively performing real estate management operations.

1. Real Estate Broker (Real Estate Agent)

Real Estate Broker is a national qualification recognized as an expert in real estate transactions. It involves legally exclusive duties such as preparing and explaining important matter disclosure documents and signing and stamping contracts.

In real estate management, the knowledge and qualifications of a Real Estate Broker are utilized in various situations, such as concluding lease agreements and explaining important matters.

2. Property Management Supervisor

The Property Management Supervisor is a national qualification established under the Act on the Proper Management of Condominiums. Exclusive duties include explaining important matters to condominium management associations and signing and stamping management委托 contracts.

This qualification is mandatory for managing condominiums and contributes to enhancing the credibility of management companies.

3. Certified Property Management Specialist for Rental Real Estate

Certified Rental Property Management Specialist is a national qualification that has gained importance with the implementation of the Rental Housing Management Act. It is recognized as a qualification for business managers of rental housing management companies and serves as proof of expertise in rental management operations.

4. Other Useful Qualifications

Qualification Name Application Scenarios Benefits of Obtaining the Qualification

Financial Planner Financial planning, tax consultation Comprehensive advice for property owners

Real Estate Appraiser Property valuation, rent assessment Specialized pricing capabilities

Architect Repair plans and renovations Structural understanding of buildings

Bookkeeping Certification Income and expense management, accounting processing Improved financial management accuracy

Benefits of obtaining qualifications

The specific benefits of obtaining qualifications are as follows:

1. Systematic acquisition of specialized knowledge: Efficiently learn the legal and practical knowledge necessary for your work
2. Improved customer trust: Demonstrate your expertise as a qualified professional
3. Career advancement opportunities: Gain an advantage in promotions and job changes
4. Improved work quality: You will be able to perform your work accurately and appropriately.
5. Reduced legal risk: You will improve your awareness and knowledge of legal compliance.

Current state and future prospects of the real estate management industry

The environment surrounding the real estate management industry is undergoing major changes in line with changes in social conditions.

Changes in the market environment

1. Impact of an aging society

The percentage of elderly people in Japan reached 28.8% in 2021 and is expected to continue to rise.As a result, there is an increasing number of owners who have inherited real estate but are unfamiliar with its management, leading to a growing demand for specialized management services.

2. Increase in rental housing stock

The total number of rental housing units nationwide has reached approximately 19 million (as of 2018), highlighting the growing importance of proper management. Especially for older properties, strategic management is essential to maintain and enhance asset value.

3. Diversification of tenant needs

Lifestyles are diversifying, and tenant needs are becoming more complex. It is necessary to establish a management system that can respond to various demands, such as pet-friendly properties, housing for the elderly, and accommodation for foreign tenants.

Utilization of technology

1. Progress in digitization

The introduction of technology such as smart locks utilizing IoT technology, remote monitoring systems, and AI-based tenant matching is improving operational efficiency.

2. Promotion of online services

Due to the impact of COVID-19, online viewings, electronic contracts, and remote support have rapidly become widespread. These technologies are expected to continue to be utilized in the future.

Future outlook for the industry

The real estate management industry is expected to continue growing due to the following factors:

1. Increase in management consignment rates: The current management consignment rate of approximately 60% is expected to rise further in the future.
2. Sophistication of services: Transition from simple management services to high value-added services
3. Importance of expertise: The importance of specialized knowledge is increasing due to stricter regulations.
4. Expansion of ESG investment: Demand for real estate management that emphasizes the environment, society, and governance is increasing.

Summary

The real estate management industry plays an important role in maintaining and enhancing the value of valuable assets entrusted to owners. By providing services based on specialized knowledge and experience in both rental management and building management, we maximize investment returns for owners and improve tenant satisfaction.

The industry is undergoing rapid changes, and it is necessary to respond to various factors such as stricter regulations, technological advances, and diversifying tenant needs. In such an environment, acquiring appropriate qualifications and continuing education to enhance expertise is the key to success.

INA&Associates Co., Ltd. provides optimal management services tailored to the needs of each property owner and aims to build long-term partnerships. Please feel free to contact us for any inquiries regarding real estate management.

As the next step, we recommend that you first consult with a reliable management company to discuss the best management plan for your property.

Frequently Asked Questions

Q1. What qualifications are required to start a real estate management business?

A1. There are no mandatory qualifications required to start a real estate management business, but registration as a rental housing management operator is required if managing 200 or more units.Additionally, we strongly recommend obtaining qualifications such as Real Estate Broker, Property Management Supervisor, or Leased Property Management Specialist to enhance the quality of your services.

Q2. What is the typical rate for property management fees?

A2. Generally, the standard rate is approximately 5% of the rent, but this may vary depending on the size of the property, its location, and the scope of services provided. For comprehensive property management services, the rate is often slightly higher.

Q3. Is it possible to change property management companies?

A3. Yes, it is possible. However, you must confirm the termination clauses in the management contract and follow the appropriate procedures. To prevent issues during the transition period, it is important to ensure sufficient information sharing between the new and old management companies.

Q4. Is property management possible for small-scale properties?

A4. Property management is possible even for a single-family residence. However, some management companies may have minimum property management unit requirements, so we recommend confirming this in advance.

Q5. What are the key points to consider when selecting a management company?

A5. We recommend prioritizing the following points: ① Track record and reliability, ② Service area and scope of services, ③ Transparency of fees, ④ Emergency response capabilities, ⑤ Expertise and responsiveness of staff. It is important to obtain proposals from multiple companies and compare them.