It is no exaggeration to say that the success of rental management depends on the quality of the rental management company. This time, we will introduce the procedure for changing the rental management company when you have concerns about the rental management company, as well as the points to check when changing and things to keep in mind when choosing a management company.

In times like these, consider changing management companies.

Rental management is generally outsourced to a management company, but leaving it to a management company is a recipe for failure. You should regularly check whether the management is in good condition and prepare for changes as soon as you notice something is wrong. In particular, consider an increase in the vacancy rate or a deterioration in management conditions such as cleaning or equipment updates as a signal, and check the situation with the management company.

Vacancy rate has increased

The occupancy rate of rental properties usually remains around 90%, although it depends on the area and number of units. If the vacancy rate continues to deteriorate to over 20%, you should suspect that there is a problem with the rental recruitment method.
It would be good if some kind of countermeasures were taken to improve the situation, but if it continues to be left as is, I would consider changing the management company.

Management condition deteriorated

Even people who are not familiar with real estate management can detect deteriorating management conditions, such as dirty entrances and passageways, lights not being turned on in common areas, and broken glass in common areas left unattended.
There are several reasons why this situation has been left unaddressed, including a lack of staff at the management company and insufficient costs, so improvements should be made.

Negotiations were made to reduce sublease rent.

Sublease contracts offer long-term rental guarantees, but in many cases they only guarantee the lease itself, not the amount of rent. In the case of a property with noticeable vacancies, the rent will be negotiated after a certain period of time.
Please note that depending on the contents of the sublease contract, there may be clauses that are difficult to cancel, but if you are not satisfied with the rent reduction, one option is to consider changing the management company.

Procedures for changing rental management company

The procedure for changing the rental management company itself is not that difficult. All you have to do is apply for cancellation to your current management company and conclude a management outsourcing contract with the new management company. The new management company will handle the operations after the handover.
However, the owner must understand the current contract and warranty details. Whether the current situation will be inherited by the new management company depends on the contract.
The selection of a management company is also at the owner's own discretion. It can be said that preparation before actually starting the change procedure is the most important.

Check contract details

First, check the contents of your current rental management contract. There are various forms of rental management contracts.
First, there are two types of rental management contracts: "general management contracts" and "sublease contracts."
General management contracts generally include tenant-related affairs such as tenant recruitment, tenant correspondence, and rent billing and receipt services, as well as building management-related duties such as cleaning, repairs, and equipment replacement.
A sublease contract is a contract that includes a lump sum rental contract and a general management contract.
Recently, some contracts have become more complex, so be sure to check the details of your contract in advance.

Check warranty details

In addition to the management contract, various guarantee contracts may be concluded at the recommendation of the rental management company. These include rent guarantees and building repair guarantees. These warranties may expire due to a change in management company, so please check the warranty details.

Select a new management company

After confirming the contract details, we will decide which company to use as the new management company. Choose a management company that can improve its management by referring to the 3 points to consider when choosing a management company that will be introduced later.

Apply for cancellation to your current management company

The procedure for applying for cancellation is stated in the contract, but first, contact the current management company to find out how to proceed. Depending on the contract, you may need to submit a notice of cancellation several months in advance, or you may not be able to reach an agreement to cancel the sublease, so it is advisable to consult as early as possible.

Sign a contract with a new management company and take over operations

Once we have reached an amicable agreement on the management contract, we will conclude a management outsourcing contract with the new management company. We will confirm in as much detail as possible whether the contract details are the same or different from the current contract.
After the contract is signed, documents related to rental management (tenant contract documents, etc.) and keys will be handed over between the new and old management companies, and the business will be handed over. Regarding the ongoing troubles, it would be best to ask the person in charge of the old management company to explain the details.

Notify tenants of the change in management company

Due to the change in management company, the bank to which tenants' rent should be transferred or debited will change, so we will notify tenants of the change in management company. The new management company will take care of detailed notification content such as text and contact information.

3 points to choose a management company that won't fail

Changing management companies involves going through a complicated procedure, so you don't want to make any mistakes. Of course, it is important to compare and consider multiple management companies, but it is important to keep the points in mind when comparing and considering them. Choose a management company that suits your property, not just because it's a major company or because it's local, but also by its management track record and evaluations.

Choose a management company that suits your property

If you ask a major management company to handle a small apartment, they may not be able to provide you with detailed support, or conversely, if you hire a local rental management company to deal with a large apartment, they may not have the capacity in time. When consulting with a management company representative, it is important to ask questions about the types of properties they often manage and whether they have a track record of managing properties similar to the property in question.

Check if it is an AMO (accredited property management company)

AMO (Authorized Real Estate Management Company) is a title that certifies excellent real estate management companies, one of only 520 companies in the world and only 9 in Japan. It is highly regarded in the real estate industry as it is a title that can only be earned by companies that meet a variety of criteria, including real estate management experience, credibility, and the real estate management skills and skills of managers and employees.

Do you have a system that can respond immediately when needed?

It is important to be able to quickly rush to the scene when a problem occurs, and to have a communication system in place. If the management company is away from the property or does not have the necessary personnel, this can cause problems to escalate. If you have any specific problems with your current management company, it would be a good idea to ask about how to deal with them.

Long-term partnership with management company

A real estate management company is an essential business partner for rental management. It is desirable to continue the relationship until the end of the investment, but if you notice that the management is poor, you should consider changing the management company. In that case, it is necessary to fully understand the contract and warranty details before consulting with the new management company. The first step to success is for the owner to understand the business and manage the rental property themselves, rather than leaving everything to the management company.