Many residential buildings in Japan, especially in bigger cities, are apartment buildings with dozens or even hundreds of units.
As opposed to free-standing single-family homes, they are managed by the building management association (or kanri kumiai in Japanese).
As most things in life, building management does not come for free; as a property owner you are obliged to pay the monthly fees, whether you bought the property as an investment or as a vacation house.
Of course the information about these costs is given to property buyers in advance, so you can make sure to add the running costs to the monthly loan repayment amount when you apply for a loan to finance your property purchase.
What are these running costs exactly?
The running costs included in the building management fee are for the common area fees (Japanese: kanrihi) and reserve fund for repairs (Japanese: shuuzen tsumitatekin). While the building management fee covers the daily costs for the maintenance of entrance, hallway, garbage disposal area, elevators etc., the latter covers necessary repairs which are likely to take place in the coming years.
Why do I have to pay these costs?
The management of apartment buildings, especially high-rise buildings with a spacious lobby and services like a reception for direct inquiries, parcel delivery etc., requires high financial resources, which are split up proportionally among all unit owners. Logically this means that for bigger units the monthly costs are higher than for smaller units in the same building.
When you sum up the running costs, you might get the impression that they are too high, depending on where and what kind of property you bought. Wouldn’t it be better to buy a property with very low building management fee to reduce your monthly costs?
Well, if the building management fee seems low compared to similar properties, there may be the chance that either the maintenance of the building will suffer or the managing company will have to increase the fee rather soon to cover their expenses.
If you have ever lived in an older, low-rise building without building management, you know about some of the things that can make a difference; for example, a 24-7 garbage disposal room or area. It is quite inconvenient to have restrictions on what day and time you can dispose of what kind of garbage. And when you go down to the street to dispose of your garbage at the nearby collection space as a foreigner, you may be distrustfully observed by neighbors, suspicious that the foreign guy probably doesn’t follow the rules!
Most modern apartment buildings have an inside garbage area, where you can dispose and separate your garbage 24-7.
Please also consider that the building management fees do not stay the same forever. Usually they rise a little after a few years to compensate for the rising maintenance costs for repairs etc.
How do I pay the building management fees?
This is a critical issue if you live outside of Japan and do not have a Japanese bank account.
While for Japanese it is easy to pay via deduction from bank account or wire transfer, building management associations cannot handle foreign bank accounts, so you will need assistance with the payment. As the payment of the building management fees are not your only concern (you have to pay several taxes for example), the easiest way is to appoint a property manager who takes care of all payments on your behalf. Naturally the property manager also wants to get paid, as almost nothing comes for free.
If you need help to manage your property, you can contact us with the below form anytime.
Our advice is free. 😊
Tokyu Housing Lease Corporation is one of Japan’s leading property management companies.
If you are interested in learning more about Tokyu Housing Lease’s PM services, please fill out the form below, and a representative will contact you shortly.
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