Call me: +81-3-3536-5691
How to find a renter for your real estate in Japan

How to find a renter for your real estate in Japan

Investor hires a realtor to find a renter

If you have purchased real estate in Japan, you need to find a renter for your real estate in Japan.

When you purchase a real estate, there may be a renter. But your renter will leave your real estate someday.

And in Japan, most of landlord orders a realtor to find renters for their real estate.

And you need to pay fee for your realtor.

However, before you order a realtor, you need to know about the system of realtor’s fee relating finding a renter.

Otherwise, your realtor may try to deceive money from you, or your realtor does not have any motivation to find a renter for your real estate.

Example of a Real Estate Investor

Assumed a woman invests in real estate in Japan. She has ordered a real estate company in Japan to find a renter for her real estate.

Then, the real estate company finds a renter for her.

In that case, this real estate company receives money from her and a renter.

If the amount of rental fee is 60,000 yen, this real estate company will receive 120,000 yen in total.

However, this is very basic case and you should know other cases.

Assumed a woman invests in real estate in Japan.

Though there are 10 rooms in her apartment building, there is not a renter.

But, she prefers to purchase such kind of property.

Because she can purchases it at lower price. Former owner was suffering from vacant rooms and already lost his enthusiasm to manage his investment.

He just wanted to throw way his garbage.

Anyway, she has purchased her property at lower price.

If she can occupy all her rooms with renters, yield on investment is over 40 %.

So, she has contacted local real estate company to find renters.

Then, a person of local real estate company has promised to advertise her house, apartment on the website on the internet to find renters.

Several days later, 2 persons find her property on the internet and contact the real estate company, then look at it on the spot.

But unfortunately they has not decided to rent it.

Then, she may think that she should reduce the amount of rental fee.

But, she needs to take any action other than reducing the amount of rental fee.

Even in the case of newly built apartment or house, only 30 % of all visitors decide to rent it.

So, only 2 visitors are not enough to judge if the amount of your rental fee is too high or not.

The most important matter is that she should collect more visitors to her property.

When she tries to find renters to her property, she orders real estate company to find it.

But, has her realtor really advertised her property among many people ?

If her realtor has published her real estate on several websites, media, it is nice.
But, she needs to confirm if realtor has really published it on several websites.

And she needs to confirm the content of her advertisement.

( If her realtor is bad person, the realtor can deceive money from her. Assumed that she orders her realtor to find a renter without key money.

Then, her realtor publishes advertisement of her real estate with key money. And when her realtor finds a renter, he receives key money from the renter secretly. )

In the case she orders a realtor to find a renter, if a renter is found for her real estate, she will pay advertisement fee for the realtor for one month rental amount.

( If her property is located in area where there are too many investors looking for their renters, the amount of advertisement fee is more than one month.

And sometimes, many owners are looking for renters without demanding deposit and key money. In the case you are going to purchase an investment property in Fukuoka prefecture and if many of apartment there are looking for renters without deposit and key money, it may mean that there are too many vacant apartments there.  )

If she has not confirmed whether her realtor is actually advertising her real estate or not, it is risky.

Actually, realtor does not want to share information of her property among many people.
Because, if the realtor can find a renter by himself, he can receive money from both her and renter.

( Legally speaking, when a realtor receives fee from a renter, he cannot receive fee from her.
So, he may receive money from her as advertisement fee. This is a kind of evasion of the law.

But, she wants to find a renter ASAP. So, she will pay this money. In the case situation for finding a renter is bad, she will need to pay advertisement fee for more than one month’s rental fee. )

He will publish information about her apartment inside his shop.
And if he can not find renter for a while, he will share the information with other realtors.

So, in order to avoid such situation, she needs to confirm the situation.
She can ask her real estate company ” How do you advertise my real estate ? “

The number of household in Japan is increasing ➡

System of a realtor’s fee in finding a renter

Assumed she orders local real estate company ( This is owner side agent ) to find a renter ( Assumed that Amount of monthly rental fee is 60,000 yen. ).

She promises to pay the realtor money for one month rental fee as advertisement fee.

( Legally speaking, realtor can not receive fee from both renter and owner. So, he receive money from her as advertisement fee.)

If the realtor ( owner side agent ) finds a renter for her, realtor can receive fee from renter.

At the same time, the realtor can receive money from her.

So, he can receive 120,000 yen in total.

If the realtor shares information of her real estate with other realtors and other realtor ( renter side agent ) finds a renter, he ( owner side agent ) can not receive fee from renter, but only from her.

So, his fee is only 60,000 yen.

Anyway, even if other realtor ( renter side agent ) finds a renter, he ( owner side agent ) can receive 60,000 yen from her.

So, he ( owner side agent )  may have intention to share the information with other realtor and may publish on the major website.

( It will cost some money ).

When she asks real estate company to find a realtor, she signs mediation contract ( BAIKAI KEIYAKU = 媒介契約 ) and there are 4 kind of mediation contract ( BAIKAI KEIYAKU = 媒介契約 ).

1  Non-Exclusive Brokerage Service Agreement ( Ippan baikai keiyaku ) + advertisement fee

When she orders a realtor to find a renter for her real estate in Japan, she signs Non-Exclusive Brokerage Service Agreement and promises to pay money to advertise her real estate.

In the case of this contract, she can order more than one realtor to find a renter at the same time.

Assumed that she orders Yamada Realtor and Aki realtor to find a realtor. ( they are owner side agents. Motoduke gyosha = 元付業者 ) .

And when Yamada realtor finds a renter, she pays Yamada realtor money to advertise her property.

And her renter pays mediation fee for Yamada realtor.

So, Yamada realtor can receive 120,000 yen in total.

But, if other realtor named Tani realtor finds a renter, Yamada realtor can receive only 60,000 yen from her.

And Tani realtor can receive 60,000 yen from her renter.

In the case of this contract, even if Tani realtor finds a renter, Yamada realtor can still receive money from her.

So, Yamada realtor may have budget to advertise information of her property on the pay website and information of her real estate will be spread among many people.

2  Non-Exclusive Brokerage Service Agreement ( Ippan baikai keiyaku )

She can order more than one realtor to find a renter at the same time.

Assumed that she orders Yamada Realtor and Aki realtor to find a realtor. And when Yamada realtor finds a renter, she pays Yamada realtor money to advertise her property.

And Aki realtor can not receive any money.

So, Aki realtor does not have any budget to advertise her real estate on the pay website.

3  Exclusive Brokerage Service Agreement ( Sen nin  baikai keiyaku )

She can order only one realtor to find a renter.

4   Exclusive Brokerage Service Agreement ( Sen nin  baikai keiyaku ) + advertisement fee

She can order only one realtor ( owner side agent ) to find a renter. And when a renter is found, she pays owner side agent money.

In the case of this contract, her realtor can receive money from her even if other realtor find a renter.

So, her realtor may have budget to share the information of her property.

But, if the realtor is too arrogant, he may not share this information with other realtors.

Because, if he finds realtor by himself, he can receive 120,000 yen in total.

So, she needs to ask her realtor to share information of her property with other realtors.

So, in the case of 4th contract, information of your real estate will be advertised among many people soon.

Leave a Reply