What is real estate management? The work of a management company and providing honest value

Real estate management is the business of managing and operating rental properties on behalf of property owners. For example, we act as agents for owners of properties such as condominiums, apartments, office buildings, single-family homes, and commercial facilities, handling daily management tasks and tenant relations. The goal is to maintain and enhance the value of the property, which is a valuable asset for the owner, while providing tenants with a safe and comfortable living environment.

In this article, we will provide a detailed explanation of the specific tasks performed by real estate management companies, broken down into categories such as building management, tenant relations, contract management, maintenance and repairs, and financial reporting. Rather than simply listing the duties, we will also focus on the importance of a sincere attitude toward work and the value created by human resources, and consider what true value can be provided in the real estate management industry. Daisuke Inazawa, CEO of INA&Associates Inc., will share his insights based on his actual experiences and philosophy.

What is real estate management?

First, let's review the basics of real estate management. The primary role of a real estate management company is to manage and operate properties on behalf of property owners. When property owners are busy with their main business or own multiple properties, managing each property individually can be challenging. Therefore, it is common to outsource these tasks to a specialized management company.

Management companies act as intermediaries between property owners and tenants, supporting smooth rental operations while maintaining the value of the property. Specifically, they handle a wide range of tasks, including tenant recruitment, contract procedures, support during tenancy, maintenance of buildings and facilities, and monthly financial management. Creating a living environment that satisfies both property owners and tenants is the most important mission of a real estate management company. Naturally, property owners strongly desire to maximize the revenue from their properties. To meet this expectation, management companies are also expected to make efforts to reduce vacancies and manage costs appropriately to enhance profitability.

Main Responsibilities of a Real Estate Management Company

Below are the primary tasks that real estate management companies perform on a daily basis. These tasks can be broadly categorized into two main areas: rental management and building management. Let's take a closer look at each.

• Building Management: This involves maintaining the building itself and common areas. This includes addressing minor issues on a daily basis and developing long-term renovation plans to extend the life of the building and preserve its asset value. For example, cleaning common hallways and entrances, inspecting equipment such as elevators and water pumps, developing repair plans for deteriorated areas, and proposing future rebuilding or large-scale renovations. Through such building management, the physical value of the property can be preserved and enhanced over the long term.
• Tenant Support: This involves responding to inquiries, requests, and complaints from tenants. We quickly address issues that may arise on a daily basis, such as noise complaints and equipment malfunctions, to maintain an environment where tenants can live with peace of mind. We respond promptly to late-night equipment malfunctions and noise issues, assess the situation, and take appropriate action. We also mediate disputes between tenants. We will ensure that residents are fully aware of rules and manners as necessary to prevent recurrence of problems. By striving to provide honest and prompt service, we aim to enhance resident satisfaction.
• Contract Management: This involves managing administrative procedures related to lease agreements. When entering into a lease agreement with a new resident, we conduct screening procedures, prepare and explain contract documents, and manage the contract in accordance with its terms after it is signed. Rent collection, coordination with guarantee companies, management of contract renewal dates, and notification of renewal procedures are also included in contract management. In the event of rent delinquency, we promptly follow up with tenants and initiate collection procedures through guarantee companies. When a tenant moves out, we handle termination procedures and security deposit settlements (reimbursement of restoration costs).
• Tenant Recruitment (Vacancy Management): When a vacancy arises, promptly recruiting the next tenant is an important task. We create advertisements that accurately convey the property's appeal and discuss appropriate rent settings with the property owner. We also conduct extensive tenant recruitment through real estate brokerage companies and property listing websites, handle inquiries from prospective tenants, accept rental applications, and conduct and support tenant screening processes. By minimizing vacancy periods, we contribute to the stability of the owner's rental business.
• Repair Services: This involves addressing issues related to building or room facilities. When notified of any issues by tenants, we confirm the situation and arrange for professional repair services as needed. We report the repair details and costs to the owner, obtain approval, and proceed with the work. We also obtain quotes from multiple contractors, compare them, and take care to ensure repairs are carried out at reasonable costs. We respond promptly to emergencies such as water leaks or power outages to prevent further damage. After repairs are completed, we explain the situation to tenants and communicate preventive measures to ensure their peace of mind. Through such appropriate maintenance and repair services, we help maintain property value and ensure tenant satisfaction.
• Financial Reports: This service involves regularly reporting the financial status of the property to the owner. We compile monthly rental income, management fees, repair costs, and other expenses into a financial report and submit it to the owner. We may also provide advice on operational matters or discuss future rental management strategies as needed. Additionally, we will transfer the amount remaining after deducting fees and expenses from the rent collected on behalf of the owner. By providing clear financial reports, property owners can accurately understand the operational status of their properties. By sharing numbers and working together with property owners, we can address challenges and contribute to better rental property management.

The above is an overview of the main job responsibilities. While there may be minor differences depending on the type of property or the property owner's preferences, the role of a real estate management company is to provide comprehensive support from tenant recruitment, contract signing, daily operations, building management, to financial management.

The importance of approaching work with integrity

When performing real estate management work, approaching work with integrity is of utmost importance. We believe that the relationship between a management company and property owners should be viewed as a long-term partnership rather than a mere business contract. Since property owners entrust us with their valuable assets, building trust is essential. This trust cannot be built overnight but is cultivated through daily efforts.

A property owner who switched to our company previously told us, “The previous management company was slow to report and dishonest, so I was hesitant to entrust them with the property.” This experience reinforced the importance of prompt communication and honest responses.

Through my experience running INA&Associates, I have come to deeply understand that transparent information sharing, honest communication, and responsible actions are essential for building trust. For example, we keep property owners informed in real-time about the condition of the property, tenant status, and financial information, and promptly report and consult on any issues that arise without hiding anything. We also respond swiftly and sincerely to any requests or questions from property owners, striving to demonstrate a mindset that ensures they feel confident in entrusting us with their property management.

The same level of integrity applies to our interactions with tenants. If we can earn the trust of tenants through our management services, this will ultimately lead to lower turnover rates and improved property reputation, which in turn benefits property owners in the long term (stable operations). By sincerely addressing each and every challenge that arises on-site every day, we build a solid foundation for real estate management through the accumulation of these efforts. This leads to the establishment of strong trust relationships with our customers (property owners and tenants).

The value created by human resources

I strongly believe that the greatest source of value in the real estate management industry is “people.” At our company, we do not view our employees and partner staff as “human resources,” but rather as “human capital.” This is because we see people not as mere labor, but as irreplaceable assets to the company. We believe that providing an environment where those who work diligently on-site are fairly evaluated and can fully utilize their abilities leads to the provision of high-quality services.

In fact, our real estate management operations are staffed by a diverse group of talented individuals with a wide range of skills and experience. For example, staff with architectural or construction management qualifications and experience can leverage their specialized knowledge to provide appropriate maintenance and construction proposals. Staff fluent in English or other foreign languages can facilitate smooth communication with foreign residents. By leveraging the strengths of each individual, we are able to provide higher quality services and solutions to both property owners and tenants.

My strong belief in the importance of human resources was one of the reasons I founded INA&Associates Inc. in 2020. The real estate management industry has long been characterized by a multi-tiered subcontracting structure, which has made it difficult for those who work hard on the front lines to be rewarded. To address this, we introduced a unique business model aimed at creating a system where hardworking individuals are fairly evaluated and rewarded. For example, while traditional management fees typically amounted to 3–5% of rent, we have implemented a transparent flat-rate system of 1,100 yen per month per unit (including tax) through operational efficiency improvements and IT utilization. By fairly evaluating the value of people and services as a company and providing appropriate compensation and working environments, we enable on-site personnel to work with greater motivation and pride.

While technology continues to advance, it is ultimately people who solve problems through creativity and ingenuity. That is why management that fosters the vitality of our human resources is so important. We believe this will lead to a significant improvement in the value we provide to our customers.

Cultivating and utilizing human resources is directly linked to the growth of the management company itself. The growth of each and every employee is the growth of the company. We believe that a company where staff feel a sense of fulfillment and pride in their work, and where they can work with a smile and vitality, will inevitably be able to provide excellent service to our customers. Since human resources are our greatest asset, it is important to maximize their potential through investments in education and training, the creation of a comfortable working environment, and the establishment of a system that fairly evaluates performance. By doing so, we can continue to provide stable, high-quality services to property owners and tenants through the accumulated strength of our staff and organization.

Summary

Real estate management is not only a job that deals with “things” such as properties, but also a job that builds trust between people. The specific tasks of a management company include building maintenance, tenant relations, contract management, repair responses, and financial reporting, among others. However, at the core of all these tasks is providing peace of mind and satisfaction to both property owners and tenants.

In order to carry out these tasks, it is essential to build relationships based on trust through a sincere attitude, and the strength of the people working on site is the source of value creation. As a manager, I realize every day that it is only through sincere and transparent work and a corporate culture that values people that we can provide significant value to both owners and tenants.

INA&Associates Inc. is committed to real estate management with these principles in mind. For property owners who are wondering what real estate management entails, we hope this article will help you understand the nature of our work and assist you in selecting a partner. We take pride in our work of safeguarding and nurturing valuable assets, and we will continue to provide value with integrity to contribute to your real estate management. As a partner who earns your trust, we will continue to strive for excellence and contribute to maximizing asset value and ensuring stable operations.