Key details about property management fees in japan

1. Standard Property Management Fees:

 7%: For basic property management services such as rent collection, tenant communication, and basic maintenance coordination. This is common for standard residential properties.

8% to 10%: For more comprehensive services that include marketing, tenant sourcing, dealing with legal issues, repairs, inspections, and possibly tax filings. These fees are more common for larger properties or properties that require more frequent management.

2. Additional Fees:

In addition to the basic property management fee, there may be additional costs for extra services provided by the property manager. These can include:

• Tenant placement or leasing fee: Typically 1 to 2 months' rent for securing a new tenant. This fee covers advertising, showing the property, and vetting tenants.
• Maintenance and repair fees: If the property requires repairs or maintenance, you may be charged separately for these services. The fee could vary depending on the nature and extent of the repairs.
• Cleaning fees: Some property managers charge additional fees for cleaning services, especially after tenants move in or out.
• Handling of utilities: If the property manager is responsible for paying utilities (water, gas, electricity) on behalf of the tenant, they may charge an administrative fee for this service.
• Legal fees: For legal issues, such as eviction proceedings or tenant disputes, property managers might charge an additional fee for their services or if they need to hire legal experts.

3. Different Types of Management Services:

• Full-Service Management: A comprehensive management package (typically 8-10%) will include tenant recruitment, marketing, maintenance coordination, dealing with disputes, rent collection, and potentially accounting services (such as filing taxes or providing reports).
• Basic Management: For a fee of 7%, property managers might only handle basic services like rent collection, tenant communication, and basic property maintenance coordinations.

4. Special Considerations for Non-Resident Foreign Investors:

• Language Barrier: Non-residents may face language barriers, so property management companies that offer English-language services or support are often preferred. These services might come at a slightly higher cost, but they ensure smooth communication.
• Remote Management: Non-resident foreign investors may need extra services (e.g., more detailed reporting, regular property inspections, or handling financial matters like tax filings). Such additional services could lead to higher fees, especially for premium services tailored to non-resident investors.
• Tax Reporting and Compliance: If you have a property in Japan and need to comply with local tax laws (e.g., filing income tax returns on rental income), the property management company might assist, but additional charges could apply for accounting services or tax filings.

5. Fee Negotiability:

• For larger or high-value properties, property management companies may be open to negotiating the management fee percentage. Some property managers may also offer a tiered fee structure based on the property's value or the level of service required.
• If you're investing in multiple properties in Japan, we can  offer discounts for handling a portfolio of properties.

Summary of Key Points:

• Average Property Management Fees: Typically 7% of the monthly rent.
• Additional Costs: Tenant placement (1-2 months' rent), maintenance and repair costs, legal fees, and cleaning fees.
• Full-Service Management: Fees at the higher end of the range (8-10%) for comprehensive services.
• Basic Management: (7%) 
• Special Services for Non-Residents: Non-residents may incur additional fees for services like tax reporting, translation services, and more frequent property inspections.

If you're a non-resident foreign investor in Japan, it’s crucial to discuss the specific services you require with your property management company to ensure the fee structure aligns with your needs and the type of service provided.

Ichiro Higuchi