You might think: “To make and maximise a property listing isn’t my job. It’s my real estate agent’s job”. In Japan, recruitment of tenants is the job of real estate agents, property managers, etc., after all. They are responsible for creating the listings that go on popular websites such as “at home”, “Suumo,” and “LIFULL HOMES”. Then there’s REINS*. They put listings on there, which other real estate agents search when they receive inquiries. They also try to find renters through local networking and other means. However, real estate agents have lots of work to do, and sometimes place ads on portal sites that are not as appealing as they could be. Real estate agents will accept the instructions of the owner, though, when it comes to listing terms. Clients can tell them how to list the property, and then they can maximise property listings accordingly.
*(Real Estate Information NetWork Systems, or レインズ in Japanese, the national real estate database only accessible to licensed real estate brokers)
Make Your Apartment Attractive With Appropriate Pricing
How do owners choose how much to charge per month?
Recently, Suumo conducted a poll. In it, it asked landlords how they decided what price to charge for rent. 59.5% of respondents based it on the advice of the real estate agent. 24.5% looked around the neighbourhood, comparing it to other units in the same area, and based it on that. 9% plugged in values that they hoped for. 11.4% had some other way of deciding the price.
Keep psychology in mind.
Imagine that you’re in a hurry, and you go to 7-Eleven, Lawson, or a supermarket for a Bentō lunchbox. Notice how many lunchboxes are ¥298, ¥398, ¥498, etc. The reason for this is psychology. They sell better than if they were ¥300, ¥400, ¥500, etc., respectively. Well, the same thing goes for real estate. Use the lowest possible “rent price” to get picked up in the searches. E.g. instead of ¥40,000, try ¥39,000. Many tenants searching “at home”, “Suumo”, and “LIFULL HOME’S” will specify search criteria “less than ¥40,000” instead of “equal to or less than ¥40,000”. If they search for the former, your ¥40,000 property would not appear in the search results.
If you charge ¥39,000 instead of ¥40,000, that’s ¥24,000 less during a two-year lease, though. However, you can make up the rest using other fees/conditions. For example, if you charge key money equal to one month’s rent, that’s +¥39,000. You’ve made up the difference. For example:
1) ¥40,000 a month in rent × 24 months = ¥960,000 during a two-year lease
2) ¥38,334 a month in rent × 24 months + ¥38,334 in key money = ¥958,350 during a two-year lease
= Essentially the same return as above, but more psychologically appealing to a prospective tenant
You can offer free rent, for example for one month. Have plenty of clauses that claw back the rent money if the tenant leaves early. Usually, when a prospective renter is considering an apartment, he’s fantasising about his new life there. He’s unlikely to be thinking about “What if I have to leave early?”. We are all subject to short-term behavioural bias.
Free internet ranks highly in tenant surveys regarding the features they most appreciate in a rental property. Although this will be a cost, if it means that a vacant unit will become tenanted, then the cost itself is always smaller than the opportunity cost (the lost income) from owning a vacant unit.
Tips To Improve Your Investment Property Listings
Make sure your pictures are good; this will make or break whether or not your listing is successful. Pictures are an essential part of a complete listing, which is what you should be aiming for. According to one major apartment search website, complete listings receive three times as many tenant reservations as the average property listing. One reason for this is that many tenants move from far away, and are reserving sight-unseen. Here are some points to keep in mind:
- Have at least five images. The images should be clear.
- Each room should have at least one picture. Take a picture of the bathroom. Take a picture of the main room. If they exist, take pictures of the bedroom, the living room, the dining room, the kitchen, etc.
- Make sure the rooms are clean. They should also be tidy.
- Ensure that there is enough light. You may consider opening the windows. Natural light will often maximise the appeal of a given picture.
- It is best to take pictures from the corner of a room. It will give a better perspective. Prospective tenants can see the size and shape.
- There is no need to use a professional camera. These days, the average Android or iPhone camera is more than enough if you tidy up the photos afterwards.
Other “Hacks” To Maximise Property Listings
Know When To List
The Japanese fiscal year is April 1-March 31. The calendar at many workplaces follows the fiscal year, and so do school calendars. Therefore, many Japanese people move shortly before that. Mid-January to mid-March is the best time to list.
Have A Complete Listing
A complete listing will do much better on publicly-accessible websites. It will also do much better on REINS. A complete listing includes a detailed description. This description should include sub-descriptions of:
- Technical & construction information
- Special features & bonuses (e.g free internet)
- Transportation (i.e. buses, trains [e.g. JR or Keio])
- Proximity to various important points
Make sure to fill out all fields. On some websites, complete listings get higher search rankings than those that are incomplete.
In Yes/No fields, don’t have “Unknown.” This makes it seem like you’re hiding information, and makes you less trustworthy. You need to appear as trustworthy as possible.
Be Honest With Your Real Estate Company
Of course you should tell them the property’s strengths. What about its weaknesses, what are they? Perhaps they can find a way to “reverse” the weakness and turn it into a strength.
Have An Up-To-Date Calendar
Ensure that the move-in dates are correct. This way, you will get more relevant tenant requests. They will be about moving in at a time that the piece of real estate is actually available. It will also have higher visibility in the search results if the move-in dates are upcoming, or if they match the user’s search criteria.
Maximise Property Listings: Conclusion
Of course your real estate agent and/or property manager (PM) will make at least one, but probably multiple listings. Generally, with these, you will enjoy the 95% tenancy rates that characterise the 23 Special Wards of Tokyo. However, keep an eye on the listings. In other words, to maximise property listings, remember the above points, and don’t be afraid to remind your real estate agent.