1.0WealthParkhttps://wealth-park.com/enProperty Management in Japan | Differences between Master Lease and Sublease You Should Know - WealthParkrich600338<blockquote class="wp-embedded-content" data-secret="vIcqz5eC6R"><a href="https://wealth-park.com/en/wealthpark-blog/20220830masterlease/">Property Management in Japan | Differences between Master Lease and Sublease You Should Know</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://wealth-park.com/en/wealthpark-blog/20220830masterlease/embed/#?secret=vIcqz5eC6R" width="600" height="338" title="“Property Management in Japan | Differences between Master Lease and Sublease You Should Know” — WealthPark" data-secret="vIcqz5eC6R" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script type="text/javascript">
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https://wealth-park.com/wp-content/uploads/2022/08/Master-lease.jpg1200675In Japan, there are several arrangements for managing investors’ real estate. The most common one is for investors to pay a property management fee (benchmark is 5% of rent) and appoint a property management company to primarily handle leasing, tenant management, and property maintenance. Alternatively, investors may rent the property to the management company, which then sublets it to the tenants (commonly referred to as a sublease), whereas a Master Lease is the leasing agreement between the investor and the management company. 2 Types of Master Lease: Rent-Guarantee and Rent-Linked The common understanding of sublease is a rent guarantee mechanic where the property manager pays the landlord a fixed-rent regardless of whether the property is vacant or if there is rent delinquency. The property manager, acting as the subletter does not charge the management fee nor leasing fee but pays approximately 80-90% of the actual rent to the investor while the remainder is recognized as compensation for the rent guarantee. The key money and renewal fees paid by the actual occupant will also become the property manager’s income. There is...