What is share house management?
Share house management is a method of real estate rental management in which one property is rented out to multiple people. First, let's take a look at the basic structure of share houses and the market.Basic structure of a share house
A share house is a property where multiple people live in one building. Residents have their own space to ensure privacy, but share the living room, bathroom, etc. with other residents.
Since the bathroom and other areas are shared, there is no need for these facilities in the individual spaces. As a result, the individual spaces can be kept compact.
Market and demand for share house management
Share houses come equipped with furniture and appliances, making living hassle-free and inexpensive. For this reason, they are popular with the following types of people:
- Students who have come to Tokyo from other regions and young people in their 20s and 30s who have just started working
- Foreigners who have come to Japan for tourism, study abroad, or employment
- Those who are working away from home and don't need to buy furniture and appliances
In addition, after COVID-19, there have been changes in working styles, such as remote work being encouraged. As a result, there is no longer a need to live in the city center close to where one works, and an increasing number of people are choosing to live in shared houses in the suburbs.
It is expected that the number of young people who need to save money, foreigners coming to Japan, and people who want to live lightly without being tied to a place to work will continue to increase in the future. For this reason, the future of share houses, which are easy to use, is bright.
The advantages and disadvantages of running a share house
We will explain the advantages and disadvantages of running a shared house.merit
There are three advantages to running a share house:
- Ability to utilize vacant properties
- Regular rental income is expected
- The fact that it can cater to a diverse target demographic means that rooms are less likely to be vacant
Disadvantages
There are three disadvantages to running a share house:
- Initial investment required
- Issues that need to be addressed between tenants
- The running costs of shared spaces are high
Operating a share house requires initial investment and running costs. In the beginning, you need to pay for the property purchase and renovation, and you also need to prepare furniture and appliances in advance. The more residents there are, the faster these items will deteriorate, so the running costs will increase.
In addition, when multiple people share facilities and spaces, differences in how they are used and living environments can lead to problems. In such cases, as a manager, you must deal with the situation promptly and courteously.
Steps to start managing a share house
We will introduce three steps to start managing a share house.How to choose a property and the importance of location
The most important thing about a share house is the location. Ideally, it's best to choose an area close to a station where young people gather.
Even if the private room is only about 4 tatami mats in size, there is demand if the rent is low. Providing more private rooms will increase profits. According to the Building Standards Act, a room without a window is considered a "storeroom," so private rooms must have a window.
Interior renovation and necessary equipment
If the interior design matches the target demographic of the share house, it will be easier to attract customers. Make sure to prepare the furniture and appliances necessary for daily life so that you can move in as soon as the renovation is complete.If you provide Wi-Fi, air conditioning, and other amenities that make your residents comfortable, they will be more likely to stay for a long time. Also, in the case of a shared house that is mixed-gender, it may be preferable to have separate toilets and washing machines.
Tenant recruitment method and screening criteria
To recruit tenants for your share house, it is a good idea to use portal sites, the share house management company's website, and social media.In order to avoid trouble between tenants, set detailed house rules and make sure they are understood before signing a contract. Also, if you set a fixed-term lease, you can have problematic tenants move out at the end of the term.
Tips for increasing profits through share house management
We will explain the key points for making a profit by running a shared house.Appropriate rent and pricing plans
It is a good idea to refer to the rent of nearby shared houses when deciding on your rent. If there are no shared houses nearby, you can refer to the average rent for general rental properties and decide on a price based on factors such as the size of the room.It is also important to consider whether there are discounts for long-term stays and whether internet and utility costs are included in the rent.
Dealing with problems and improving tenant satisfaction
If tenant satisfaction is low, the risk of tenants moving out increases, which affects your profits. Therefore, to avoid trouble between tenants, it is a good idea to set house rules and regularly check whether the rules are being followed.In addition, regular cleaning and maintenance of shared areas will provide a comfortable environment and increase tenant satisfaction.
Building a community for residents and events
People who choose share houses cite "the ability to interact with other people" as a reason, in addition to "hassle-free" and "cheap." Therefore, if the share house has a concept and brings together people with similar interests, or if events are held that encourage interaction, tenant satisfaction will increase and they will stay longer.What should you be careful of to avoid failure when running a shared house?
Share house management is prone to failure in the following cases:- Ignoring tenant troubles
- Neglecting Residents’ Needs
- Inadequate management system
Shared houses can be managed without a real estate license or management qualifications, but specialized knowledge and experience are required. Therefore, we recommend that you entrust the management to a management company with extensive experience in managing shared houses.
summary
Share houses are a good way to turn vacant houses into profitable properties. However, in order to make a share house profitable, specialized know-how is required, so it is not something you can just blindly make into a share house.Cross House, which has the largest number of share houses under management in Japan, has an overwhelming customer attraction rate and an occupancy rate of over 95%. We will create a revenue simulation for you free of charge, so please feel free to contact us.
