Internet access is now becoming a standard amenity in rental properties. Free internet is drawing attention as a vacancy reduction measure, but is it truly an effective investment for landlords? In this article, we explain the issue from the perspectives of cost effectiveness and risk management.
What are the benefits of providing free internet in an apartment building for landlords?
Providing free internet offers clear business advantages for property owners.
It can help improve occupancy rates
Younger generations, particularly people in their 20s and 30s, use the internet every day. In practice, properties that spare tenants the cost and effort of opening a new line are more likely to be chosen than properties without an installed service. This not only helps fill vacancies more quickly, but can also reduce cancellations and improve occupancy rates.
You can address vacancies without lowering rent
Lowering rent as a vacancy measure has a direct impact on revenue. By introducing free internet, you can improve competitiveness while maintaining your current rent level. Even after factoring in installation costs, there are cases where landlords may consider a rent premium of up to about 3,000 yen per month.
For a broader vacancy strategy, please also see What are leasing operations, and why do they determine the success or failure of rental management?.
What are the drawbacks of providing free internet in an apartment building for landlords?
While the benefits are meaningful, there are also risks that owners should understand in advance.
Initial costs and monthly fees continue even during vacancies
Implementation requires both initial construction costs and monthly line fees. Because monthly charges continue even during vacancy periods, they can put pressure on income at properties with higher vacancy risk. It is important to carefully estimate occupancy levels and installation costs.
The risk of dealing with connectivity problems
When multiple units share a single line, connection speeds decline as usage increases. If communication problems occur, they can lead to complaints directed at the management company or the landlord, so confirming the support structure is essential. As remote work becomes more common, expectations for connection quality continue to rise each year.
Depending on the building structure, major construction may be required
In older properties, larger-scale work may be necessary, such as drilling through walls or pulling in optical fiber. In some cases, construction costs rise beyond expectations or service activation takes several months.
What should you keep in mind when introducing internet service to an apartment building?
Evaluate cost effectiveness quantitatively
Before proceeding, calculate construction costs, monthly fees, and the expected improvement in occupancy, and clarify the investment payback period. If your tenant base does not use the internet very much, the investment may not deliver sufficient value.
Choose a provider with high connection speeds
Slow connection speeds lead to more complaints. Because remote work users are also increasing, choosing a provider that can deliver a high-quality line helps prevent problems before they arise.
Understand the characteristics of wireless and wired options before choosing
- Wireless (Wi-Fi): Fast to install without work inside each unit. However, signal strength may be weaker in some rooms
- Wired (wired LAN): Provides stable speed and quality. In existing buildings, however, work is required in each room
Check cancellation penalties and support coverage in advance
If the expected results are not achieved, early cancellation typically involves a penalty. Be sure to confirm cancellation terms and the availability of support before signing a contract.
Related reading
- Guide to resolving internet line problems in rental properties | How to assess VDSL failures and decide on speed improvements
- Rethinking conventional rental management: Three differentiation strategies to maximize returns
- How to choose a property management company for rental housing | Seven points owners should prioritize and the keys to success
Frequently Asked Questions (FAQ)
How much is the initial cost of introducing free internet?
It varies depending on the size and structure of the property, but in some cases wiring work and equipment installation can cost several hundred thousand yen to more than 1 million yen. Older properties tend to require higher costs.
What is the typical monthly line cost?
For multi-unit housing plans, a rough benchmark is several thousand yen to around 20,000 yen per month. The more units there are, the lower the cost per room becomes.
How should landlords respond if tenants complain about connection speeds?
Contact the support desk of the contracted provider and confirm the situation through the management company as well. Choosing a provider with strong support capabilities is the best preventive measure in advance.
Can rent be increased after introducing free internet?
After taking installation costs into account, there are cases where a rent premium of up to about 3,000 yen per month can be considered. However, it is important to make that decision only after comparing rents with competing properties in the area.
Is it possible to carry out the installation while existing tenants are still living in the building?
Yes, it is possible. However, for wired installation work that requires access to each room, scheduling with tenants is necessary. Wireless service does not require work inside every unit, so it can usually be introduced more smoothly even while the property is occupied.
