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Manila Property Rental Management: A Detailed Comparison Between the Philippines and Japan Real Estates

Date: May 15, 2024

The management of rental properties significantly varies across different countries, shaped by unique cultural backgrounds, economic conditions, and regulatory environments. This blog explores the notable differences in rental management practices between the Philippines and Japan, offering insights into how these differences affect landlords, tenants, and the real estate market at large.

Rental Management Characteristics in the Philippines

Rental management in the Philippines often reflects a blend of informal arrangements and personal management by landlords, which presents both opportunities and challenges:

- Personalized Property Management: In many cases, landlords in the Philippines rely on their household staff, commonly referred to as maids, to manage the rental properties. These staff members handle a wide array of duties that include cleaning, repairs, and even showing properties to prospective tenants.

- High Rate of Furnished Units: Approximately 80% of rental properties in the Philippines are furnished, which can significantly ease the transition for new tenants, particularly expatriates. However, this convenience often comes with the downside of frequent maintenance issues. Furnishings and appliances in these rentals tend to have higher rates of breakdowns.

- Prevalent Maintenance Challenges: Both new and older properties frequently encounter maintenance issues. Common problems include frequent water leaks and severe issues such as sewage backups from toilets. The need for regular maintenance is a critical aspect of property management in the region.

- Cultural Nuances in Tenant Relations: The landlord-tenant relationships tend to be more personal and less formalized, which can sometimes lead to less structured management practices but also foster a more community-oriented environment.

Structured Management in Japan

Japan offers a stark contrast, with a highly structured approach to property management. This structured system is supported by specialized companies and is characterized by meticulous attention to detail:

- Professional Property Management Firms: In Japan, it is common for property management to be handled by professional firms. These companies are dedicated to maintaining high standards of tenant management and property upkeep.

- Comprehensive Tenant Services: Japanese property managers are involved in every aspect of tenant management, from recruiting and setting rent prices based on meticulous market research to handling all aspects of rental agreements, including renewals.

- Efficient Financial Handling: Management firms in Japan not only collect rent but also actively manage financial obligations such as chasing down delinquent payments. They handle statutory payments like fixed property taxes and common area expenses, ensuring compliance and punctuality.

- Full Suite of Maintenance and Administrative Services: Beyond the typical maintenance tasks, Japanese managers often handle additional responsibilities such as attending immigration procedures, coordinating extensive repair works, and ensuring properties are impeccably clean and well-maintained.

Trends and Market Dynamics

Both countries' rental markets have been influenced by global economic trends, changes in tourism, and shifts in the number of business travelers:

- Market Performance Over the Years:

  - Pre-Pandemic (2012-2019): Annual growth rates increased from 4.27% in 2012 to a peak of 8.26% in 2019.

  - Pandemic Impact (2020-2021): A sharp decline to 1.48% in 2020 and a minimal 0.16% in 2021.

  - Recovery Phase (2022-2023): Growth recovered to 2.03% in 2022, accelerating to 5.45% in 2023.

Understanding the divergent approaches to rental management in the Philippines and Japan is essential for stakeholders in the real estate industry. While the Philippines offers a more personalized and less formalized approach, Japan is noted for its rigorous and highly professional management style. This comparative analysis not only highlights the distinct real estate environments but also serves as a guide for investors, expatriates, and businesses navigating these diverse markets.



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