What Property Owners Should Prepare Before Consulting a Vacation Rental Management Company

For real estate owners looking to start a minpaku (short-term rental) investment, consulting with a property management company is a shortcut to success. However, going into that consultation unprepared carries the risk of being offered a plan that doesn’t suit your needs or running into unexpected costs. If you plan to use a management company for your minpaku investment, it’s essential to organize your property information, financial projections, and legal requirements beforehand.

In this article, we’ll walk through what real estate owners should prepare before consulting with a property management company, using concrete figures and examples along the way. Having these preparations in place means you’ll receive accurate proposals right from your first consultation, dramatically speeding up the launch of your minpaku business.

For those wondering “What will they even ask me?” or “Where do I even start?”, we’ll guide you through practical steps in order.

Understand the Big Picture Before Consulting a Property Manager About Minpaku Investment

To make your meeting with a property management company productive, first get a handle on the overall landscape of the minpaku business. There are two main operating frameworks: registration under the “Private Lodging Business Act” (the minpaku law) and licensing under the “Hotel Business Act.” Each comes with different limits on annual operating days and facility requirements. Under the minpaku law, there’s a cap of 180 operating days per year, whereas obtaining a simple lodging license under the Hotel Business Act allows for 365 days of operation.

The depth of proposals a management company can offer differs significantly depending on whether the owner understands this big picture. For example, whether you’re aiming for monthly revenue of ¥200,000 with a property capped at 180 days a year, or targeting ¥400,000+ per month with 365-day operation, your investment payback plan will look completely different. Before handing everything over to a management company, it’s important to have at least a general direction in mind regarding which operating format you want to pursue.

Organize Your Property Information So You Can Convey It Accurately

Compile the Basic Specs of the Property

The first thing a management company will check is the property’s basic information. Compile a list including location, distance from the nearest station, floor plan, building age, floor area, and structure (RC, wood, etc.). For example, organizing details like “8-minute walk from the nearest station, 1LDK layout, 40㎡ floor area, 15 years old, RC structure” allows the management company to instantly simulate expected occupancy rates and appropriate nightly pricing.

In addition, preparing at least 10 photos of the property means you can also receive interior renovation suggestions and furniture layout advice during your first meeting. We recommend photographing the exterior, entrance, each room, plumbing/bathroom areas, the view, and the surrounding neighborhood.

Checking the Management Bylaws and Lease Agreement

For condominiums, it’s not uncommon for the management association’s bylaws to prohibit minpaku operations. Since the Ministry of Land, Infrastructure, Transport and Tourism revised its standard condominium management bylaws, many condominiums have explicitly clarified whether minpaku is permitted. Check in advance whether the bylaws contain a clause prohibiting “private lodging business” operations.

If you plan to run a minpaku via sublease on a rented property, you’ll need written permission for subleasing from the property owner (landlord). Without this in hand, consulting a management company will simply end with “please secure permission first.” Obtaining this document in advance lets you move straight into discussing a concrete operating plan.

Research Zoning and Legal Regulations in Advance

Understanding Operating Restrictions Based on Zoning

Under the minpaku law, municipalities can use local ordinances to restrict the areas and periods in which operations are permitted. For example, some municipalities prohibit weekday operation in exclusively residential zones, while others restrict operation within 200 meters of schools. Check the ordinances of the municipality where your property is located, and find out exactly how many days of operation are actually possible.

If you’re aiming to obtain a simple lodging license under the Hotel Business Act, zoning becomes even more critical. Licenses won’t be granted in exclusively industrial zones, and even in exclusively residential zones, decisions vary by municipality. You can check your property’s zoning designation for free through the municipality’s city planning information, and simply telling the management company “It’s a Category 1 Residential Zone” during your consultation will help the discussion move smoothly.

Fire Safety Equipment and Building Standards Act Compliance

Minpaku operations require obtaining a fire safety compliance certificate. In many cases, automatic fire alarm systems and emergency exit lights must be installed, and if they’re not already present, construction costs of roughly ¥150,000 to ¥500,000 may arise. Consulting with your local fire department in advance to check whether existing equipment meets requirements will allow you to calculate accurate initial costs when meeting with the management company.

Whether you have a certificate of building inspection completion under the Building Standards Act is another important point. Especially for older detached houses, this certificate may not exist, which can make obtaining a Hotel Business Act license difficult. If you don’t have it on hand, it’s a good idea to obtain a certificate of building registry details from the municipality’s building guidance division.

Calculate the Assumptions for Your Financial Projections Yourself

How to Calculate Expected Revenue

Research 5-10 minpaku properties in the same area and of similar size on Airbnb or Booking.com to get a sense of nightly rates and typical occupancy levels. For example, for a 1LDK property in an urban area, a nightly rate of ¥8,000-15,000 with a monthly occupancy rate of 60-75% is a reasonable benchmark. Calculating with a nightly rate of ¥10,000 × 70% occupancy × 30 days gives monthly revenue of approximately ¥210,000.

However, if operating under the minpaku law’s 180-day annual cap, the average works out to a maximum of about 15 operating days per month. In this case, even at the same ¥10,000 nightly rate, monthly revenue drops to roughly ¥150,000. Understanding this difference before consulting with a management company allows you to have a meaningful discussion about the crucial question of “should I go with the minpaku law, or should I obtain a simple lodging license?”

Running Cost Items and Estimated Amounts

Property management fees typically run 10%-30% of revenue (varying by company and scope of services entrusted). On revenue of ¥200,000, that translates to ¥30,000-60,000 deducted as the management fee. In addition, expect cleaning fees (¥3,000-8,000 per turnover), consumable supplies (¥5,000-15,000 per month), OTA fees (roughly 3% for Airbnb, around 15% for Booking.com), Wi-Fi and utility costs (¥15,000-25,000 per month), and fire and liability insurance (¥20,000-50,000 per year).

Listing out these costs in advance and calculating a rough estimate of monthly expenses lets you judge for yourself whether a quote from a management company is reasonable. When told “the fee is 20%,” you can’t judge whether that’s high or low without understanding the overall cost structure. For example, with monthly revenue of ¥210,000, a 20% management fee (¥42,000), monthly cleaning costs of ¥40,000, and other expenses of ¥30,000, your net take-home comes to about ¥98,000. Whether you turn a profit after deducting loan repayments and property tax from that figure is the deciding factor in your investment decision.

Create a List of Questions to Ask the Property Management Company

Questions About Service Scope and Fee Structure

The term “property management” can mean vastly different things depending on the company. Clarify whether they offer a full-support package—covering listing creation, price adjustment, guest communication, cleaning arrangements, and review management—or whether they only handle a partial set of tasks. Specifically, preparing questions like the following will help ensure nothing gets overlooked. These four are essential: “Is the fee revenue-based or a flat rate?” “Is there a minimum contract period?” “Are there cancellation penalties?” and “Is cleaning included in the fee, or billed separately?”

Some companies charge an initial setup fee of ¥100,000-300,000. If you don’t confirm in advance what this initial fee covers (photography, listing creation, interior coordination, etc.), you risk incurring additional charges later that throw off your financial plan.

Questions About Track Record and Operational Structure

Be sure to ask about the number of properties the company manages, its average occupancy rate, and which OTAs it can list on. A company able to give a specific answer like “We manage over 100 properties, with an average occupancy rate of 75%, and we list on Airbnb, Booking.com, and Expedia” has accumulated that much more track record and know-how.

It’s also important to ask whether guest support is available 24/7, how many languages are supported, and what the response process looks like for emergencies (equipment failures, noise complaints, etc.). Since minpaku operations routinely involve late-night check-ins and inquiries from international guests, an inadequate support structure directly leads to lower reviews. There’s data showing that once the average review rating drops below 4.5, occupancy rates can fall by 10-20%—the quality of the operational structure has a direct impact on revenue.

Clarify Your Investment Purpose and Goals

Short-Term Income or Long-Term Asset Building

The purpose of minpaku investment varies from person to person. What you request from a management company will differ depending on whether you want to quickly monetize a vacant property, or whether you’re aiming to increase asset value over a 5-10 year horizon. If short-term income is your priority, maximizing occupancy rate and nightly rate becomes the key focus; if long-term asset building is your goal, maintaining property quality and branding become more important.

Setting concrete numerical targets is also effective. Goals like “I want to achieve an annual yield of 8% or more,” “I want to secure at least ¥100,000 in monthly net income,” or “I want to recover my initial investment within 3 years” give the management company something quantifiable to work toward with a tailored strategy. There’s a world of difference between vaguely asking “Will this be profitable?” and asking specifically, “I want to recover my ¥2 million initial investment within 3 years—is that achievable with this property?” The quality of the answer you receive will be completely different.

Decide How Involved You Want to Be

Clarify in advance whether you want to hand everything over completely, or whether you want to stay involved in decisions like pricing and interior direction. Full-service outsourcing tends to come with higher fees—10%-30% (varying by company and scope of services)—but places virtually zero time burden on the owner. On the other hand, with partial outsourcing that keeps fees around 15%, you’ll need to handle some tasks yourself, such as guest communication or restocking supplies.

For owners who are busy with a full-time job elsewhere, full-service outsourcing is the realistic choice, while those who handle real estate as their main profession can benefit from partial outsourcing to keep costs down. By weighing this against your own lifestyle and deciding how much you want the management company to handle, you can choose the optimal plan.

For All Your Minpaku Management Needs, Contact Stay Buddy Inc.

Once you’ve completed the preparations covered above, the next step is consulting with a trustworthy property management company. Stay Buddy Inc. provides comprehensive, one-stop support for minpaku operations—from helping you obtain the necessary licenses and permits, to listing creation, day-to-day guest communication, cleaning arrangements, and price optimization to maximize revenue.

We offer free, personalized simulations tailored to your property’s characteristics and your investment goals as an owner, providing concrete numbers to answer questions like “Can minpaku work for this property?”, “Which licensing format is best?”, and “How much monthly net income can I expect?”

Whether you’re anxious about starting your first minpaku investment or you already own a property and are exploring how best to use it, please feel free to reach out to Stay Buddy Inc. We’re happy to support you starting from the preparation stage, so consultations from those who aren’t sure where to begin are also very welcome.