When planning apartment construction, the first question you face is "Which should I commission, a house maker or a construction company?" The wrong choice can significantly impact construction costs and profitability. This article explains the differences and characteristics of both, and how to choose a company suited for rental management from an investor/owner perspective.
What Is the Difference Between a House Maker and a Construction Company?
What Is a House Maker?
A house maker is a housing construction company with branches and showrooms nationwide. Because building materials are manufactured in their own factories, quality is uniform and construction periods are short. Post-construction maintenance and management support is often substantial, contributing to long-term rental management stability.
What Is a Construction Company?
A construction company is a general term for companies that construct buildings, handling everything from houses and apartments to high-rise buildings. For construction companies specializing in housing and apartment construction, there is no significant difference in technical and service quality compared to house makers.
How to Choose a Company Suited for Rental Property Construction
To maximize profitability in rental investment, it's important to comprehensively evaluate construction quality, construction period, and management support. Here we organize the characteristics of major house makers.
Daiwa House | No. 1 Track Record in Steel Frame and RC Construction
Daiwa House, which ranks at the top of the industry in rental brokerage numbers, managed units, and housing supply, specializes in steel frame and reinforced concrete construction. With the "Rental Management Consignment System," comprehensive consignment from construction to apartment management is possible, giving peace of mind to first-time rental managers.
Token Corporation | Up to 35-Year Sublease
With bases in all 47 prefectures, stable income can be secured through bulk rental up to 35 years (sublease). High earthquake resistance through high-strength frames and viscoelastic dampers is also highly evaluated.
Panasonic Homes | Urban Response and High Technical Capability
A rich product lineup for maximum use even in limited land, suited for urban rental management. High technical capability in proprietary exterior walls and soundproof floors, along with property concepts from a "women's perspective," contributes to resident acquisition.
Mitsui Home | Comprehensive Support Using Group Strengths
Utilizing the expertise of the Mitsui Fudosan Group, provides consistent support from construction to resident recruitment and operations. Systems supporting long-term stable management are in place, including a delayed rent guarantee system and preferential interest rate "Mitsui Home Loans."
Which Should You Choose, House Maker or Construction Company?
- First-time rental management / anxious about management → Major house maker (all-in-one management plans available)
- Want to reduce construction costs and increase profitability → Compare with construction companies specializing in rental housing
- Special land conditions (irregular shape, small area, etc.) → Construction companies with high design flexibility also candidates
- Want to minimize vacancy risk → House makers with resident brokerage services
You can reduce risk in rental management by utilizing second opinions from trusted specialists, not just relying on construction companies.
FAQ
Q. How much is the price difference between a house maker and a local builder?
Generally, house makers have stable factory-produced quality, but tsubo unit price can be 10-30% higher than local builders. However, comparing including the value of management and vacancy guarantee services is important.
Q. What are the risks of sublease contracts?
Sublease guarantees rental income regardless of vacancies, but there are risks of review and reduction of guaranteed rent. Always check the contract details carefully and run long-term financial simulations.
Q. Does the management company after construction have to be the same as the construction company?
Not required. You can commission construction to a house maker and consign management to a separate specialist management company. Compare costs and service quality to select the best combination.
Q. What is the most important factor in rental property construction?
Location, floor plan, and response to resident needs determine profitability. In addition to the construction company's proposals, market research in the surrounding rental market is also essential.
Q. Which is more advantageous in rental investment: wood frame or RC construction?
Wood frame has lower construction costs and easier yields, but shorter useful life. RC construction has higher construction costs but longer useful life and easier financing. The optimal structure differs depending on financial planning and exit strategy.
