When managing an apartment building or condominium, using a real estate management company is essential for reducing the owner's workload. However, some companies operate poorly or unethically, so careful selection is necessary.
In this article, we explain the specific responsibilities of a real estate management company, typical costs, and key points for choosing the right partner.
What services does a real estate management company provide?
Tenant recruitment
To avoid vacancy risk, it is important to work with a management company that has strong know-how and a solid track record. Choose a company with proven leasing capability.
Lease contract procedures
They handle administrative work such as preparing contracts and processing renewals, which can be a significant burden for owners who manage properties as a side business.
Rent collection and delinquency response
Not every tenant pays rent properly every month. A management company with specialized expertise will follow up and issue payment reminders appropriately. If enrollment in a rent guarantee company is required, the owner does not need to pursue payment directly.
Complaint and trouble handling
Responding to a wide range of issues, including noise, odors, water leaks, and pet-related problems, can be mentally demanding. For that reason, outsourcing these matters to a management company is a practical decision.
Move-out inspection and settlement
Disputes over security deposit refunds are common, and appropriate handling based on the "Guidelines for Troubles Related to Restoration to Original Condition" requires specialized knowledge.
Building maintenance and facility management
Management companies handle work that is essential to preserving asset value, including regular inspections of exterior walls and common areas, statutory inspections of fire protection equipment and septic tanks, and routine elevator inspections.
Long-term repair planning
For reinforced concrete buildings, a general guideline is various painting and equipment repairs after 5 to 10 years, exterior wall painting and waterproofing measures after 11 to 15 years, and comprehensive repairs after 21 to 25 years.
What are the three types of real estate management companies?
- Management-focused type：Specializes in tenant support and building management. Suitable when there are stable demand sources nearby
- Brokerage-focused type：Strong in tenant recruitment, property showings, and contract execution through solid sales capability
- Both management and brokerage：The most flexible and efficient option. Because one company handles everything, the owner's burden is minimized
What is the typical cost of hiring a management company?
- Management fee：A typical benchmark is 5% of monthly rent
- Brokerage fee：The upper limit is one month of rent plus consumption tax. In some cases, the cost is split between the tenant and landlord
What should you check when selecting a management company?
- Scope of services：Does the company handle both management and brokerage?
- Management fee：Is it reasonably aligned with the market standard, around 5% of rent?
- Leasing capability：Its know-how and track record in leasing operations
- Problem-solving capability：Is there a system for prompt response?
- Reporting structure：The frequency and content of monthly reports
Frequently Asked Questions (FAQ)
What is the difference between a management company and a brokerage company?
A management company handles property upkeep, operations, and tenant relations, while a brokerage company introduces properties and mediates lease contracts. A management company is not the same as a licensed real estate brokerage business.
What is the typical management fee?
Around 5% of monthly rent is common. Since fees may still apply even when a unit is vacant, it is important to confirm the balance between service scope and cost.
What statutory inspections does a management company handle?
A management company arranges and carries out tasks such as fire equipment inspections, simplified water supply inspections, septic tank maintenance inspections, and regular elevator inspections.
