Seamless Property Management for Overseas Investors: A Guide to Owning in Japan

Navigating property ownership in a foreign country can be a challenge, especially when you’re managing a property remotely. Having a reliable and transparent property management partner is crucial to protecting your asset and maximizing your returns. Since the Japanese real estate landscape has unique practices, it’s crucial to understand the available support systems in order to get a successful investment.

How Do IREA and Axios Management Work Together?

International Real Estate Agency (IREA) and Axios Management partner to ensure a smooth transition from a property’s sale to its ongoing management. IREA specializes in helping clients buy and sell properties while Axios Management provides property management services. Their goal is to maintain the property’s quality, maximize your return and keep an eye on its future sale potential. While this partnership is designed to streamline the process for remote owners, you have the flexibility to engage with other licensed firms if you prefer.

What Kind of Support is Available for Remote Owners?

For owners living overseas, Axios Management offers a suite of services designed to provide peace of mind and proactive care for your property. These services include:

• Routine Checks: Periodic apartment checks ensure that everything is in order and includes checking for water leaks as well as airing out the space. They also handle practical tasks such as checking the mailbox.
• Emergency Protocols: In the event of an emergency, Axios Management is equipped with protocols to handle situations such as water leaks or power failures.
• Seamless Communication: For general communication and support, they use cloud-based software such as DocuSign, Salesforce and Google Docs. For quick communication, they recommend using WhatsApp.

This blend of traditional service and modern tools ensures you can stay connected and informed.

How Does Axios Management Handle Maintenance and Finances?

Axios Management has a proactive approach to property maintenance which handles a range of regular tasks and financial obligations to protect your asset, including:

• Regular Maintenance: Paying utilities, taxes, cleaning and building management fees.
• Long-Term Planning: For condominiums, they check Homeowners Association (HOA) meeting documents to stay ahead of issues. For an entire building, they create a capital expenditure (capex) schedule to plan for future renovations and preventive repairs.

When it comes to financial handling, transparency is a priority. For rental properties, expenses are typically deducted directly from the rental income. For a second home, you are usually asked to deposit funds to cover a year’s worth of expenses. The company uses Salesforce and other real estate management software to ensure all expenses and disbursements are transparently tracked.

How Are Tenant Turnover and Taxes Handled for Non-Residents?

Handling tenant turnover can be one of the most stressful parts of property ownership, but Axios Management takes on all the responsibility. From rent analysis and advertising to inspecting the room after a lease ends and settling deposit refunds, they manage all aspects of the process. They also manage lease documentation and collect deposits.

Taxes and regulatory compliance are another key area where their services are invaluable, especially for non-Japanese residents.

• Tax Coordination: They coordinate property-related taxes such as acquisition tax and fixed asset tax.
• Tax Agent Services: For non-Japanese resident owners, they can act as a tax agent, receiving all tax-related documents and bills on your behalf.
• Withholding Tax Solution: A notable regulation is the 20.42% withholding tax imposed when a corporate tenant leases a property from a non-Japanese resident. To simplify this, Axios Management offers a master lease arrangement where they sublet the apartment and pay the withholding tax themselves.
• Tax Structure Advice: They can also provide advice on optimal tax structures. For example, if your annual income exceeds 15 million yen, it may be more beneficial to set up a Japanese company to purchase the property, as the corporate tax rate is lower.

FAQ

1. How will I stay informed about my property?
Axios Management keeps you in the loop with a monthly report and provides updates on facility maintenance and repairs as they happen. They also share photos to help you review your property’s status.

2. What is a master lease arrangement?
A master lease is an arrangement where Axios Management sublets your apartment and pays the 20.42% withholding tax on your behalf, simplifying the process for both you and a corporate tenant.

3. What are the typical management fees?
Management fees for rental properties are 5% of the collected rent. For a second home management service, there is a yearly charge of 40,000 yen plus tax. Additional fees may apply for services such as acting as a tax agent.

Ready to Protect Your Investment?

Axios Management’s core concept is to take care of everything for the property owner, maximizing the return on your investment so you can focus on your main business. Their expertise and local presence allow them to handle challenges specific to Japan, from carefully selecting contractors to voting on your behalf at annual HOA meetings. This kind of support highlights the value of having a local partner who can act in your best interest.

Contact IREA today to learn more about their seamless property management services and get started on protecting your investment in Japan.