It is clear to everyone that securing tenants is the most important factor that determines the success or failure of an investment in real estate investment.
Occupancy rate matters!Although I often hear about it, there is no way to introduce an immediate effect on how to increase the occupancy rate.
In fact, the success or failure of real estate investment is determined by various factors, so if you do only this, it's OK!There is no such thing asHowever, there are many things that are difficult to succeed without even doing this.This time, we will explain the basics of how real estate management professionals increase the occupancy rate of apartments.
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Why is your apartment's occupancy rate so low?
Think for yourself, do you really want to live in a place with bad access, bad appearance, bad sunshine, and bad public order in the surrounding area?Even if the property purchase price is cheap, if no one wants to live there, there is no point in getting it.
What is the occupancy rate of nearby apartments?How many people are using the nearest station?If the apartments in the same price range in the surrounding area seem to be fully occupied, there is no problem with the area and there is a problem with the property itself.
There is a reason for the low occupancy rate
Check the following first
- How many people use the nearest station?
- Are there too many surrounding properties for the number of station users?
- Are there sufficient facilities such as shopping streets, convenience stores, supermarkets, and schools in the surrounding area?
- Is the occupancy rate of surrounding apartments high?
- Is the rent market price higher than surrounding apartments, and is the rent appropriate compared to the condition of the property?
- Is there anything that is inferior to the surrounding apartments, such as being dirty, musty, or not getting enough sunlight?
- What is the disaster risk situation as seen on the hazard map?
Hazard map portal site
If there are more apartments than demand in the area, naturally there will be vacant rooms.In such a case, it is extremely difficult to fill the rooms due to lack of demand in the first place.Conversely, if there is a lot of demand in an area, it is possible to maintain full occupancy even if the property conditions are bad. .There are many apartments that are fully occupied, targeting singles who want to live in the area, even if they are small.
A strategy to understand costs and cut costs that can be cut
Above, I wrote "Even if the advertising fee paid to the brokerage company at the time of closing the contract is set to 0".In order to deepen your understanding, let's check once again about the costs for moving in (moving out).
Money that comes to the owner in the initial cost, money that does not come
◆Money that comes to the owner from the initial cost collected from the tenant
Advance rent, security deposit, key money
◆Money that does not come to the owner of the initial cost collected from the tenant (move-out)
Fire insurance fee, guarantee fee to the guarantee company, key exchange fee, brokerage fee to the brokerage company, room cleaning fee 1 yen 30,000DK or more 1 yen or more)
Money paid by the owner when the contract is concluded
Brokerage fee to the brokerage company Advertisement fee (arranged at the time of vacancy, usually one month's rent is the market price) Vacancy management fee to the management company (usually one month's rent is the market price)
becomes.The security deposit and key money is a large sum, so I definitely want to take it, but if you are looking for a nearby apartment with a low initial cost, it may be taken there.For that reason, if you feel that it will be difficult to acquire tenants, rather than letting the conditions remain unchanged and the vacant state of the room prolongs, it is successful in the long run to reduce the initial cost by reducing the security deposit and key money to 0 and encourage tenants to move in. can be a strategy.
What are the basics to increase the occupancy rate?
It's about figuring out the value of your property and getting an objective picture of whether it's attractive compared to the surrounding apartments.
Why am I not getting any inquiries?Why is it considered unattractive?There is always a reason for vacancies.
Accurately grasping the current situation is the basis for increasing the occupancy rate so that tenants will choose you when you compete with other apartments with similar conditions.
If your property is attractive, but less attractive than the surrounding apartments, what would it be?
For example, the property drawing shows the advertising fee (notation AD) to the brokerage company.Advertising costs are paid when a contract is concluded, but if the conditions are almost the same and the owned property is 100% AD and the competitor is 300%, the brokerage company will want to recommend the property with 300% AD to the tenant as much as possible.Advertising to the media may also be prioritized.Unless the area is very popular and the conditions are favorable, it will be rare to push a property with a low advertising fee over a property with a high advertisement.Also, if you have a good relationship with a real estate company on a regular basis, you can say, "Because it's Mr. 〇〇's property! You may be given priority as a customer.
In addition, the population of Japan is currently declining, and although the population of Tokyo is increasing, the population of Japan as a whole is declining.Therefore, the need for workers from overseas is increasing now.When you think of foreigners, you may have an image of them not being able to speak Japanese and lacking communication skills, having bad manners and causing trouble, and being prone to running away at night. Even workers may find it difficult to rent a property because they are foreigners.If we can take the initiative in recruiting foreigners living in Japan, we can expect an improvement in the occupancy rate.By judging whether or not you can move in based on how well you understand Japan, rather than just because you are a foreigner, you will be able to differentiate yourself and become an advantage in the future.
And in order to reduce the worries about vacancies as much as possible, it is most important to choose a property in an area and conditions that you do not have to worry about from the beginning.
Summary
The key to increasing occupancy rates is...
- Thoroughly check the reasons for the low occupancy rate
- Understand costs and cut costs that can be cut
- From the time of choosing the first property, choose a stable property that can make a steady and continuous profit
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
