For minpaku owners who are planning to rent their apartment for monthly stay, there are a few differences which they need to understand. In the previous article, we wrote about the importance on hybrid inventory management to maximise the rental income between Minpaku and monthly apartment rental. In this article, we will share some differences between daily and monthly so that owner know how to operate a monthly rental.
The importance of “A Fixed Term Rental Agreement” (Teishaku)
For monthly rental, owner will need their guest to sign a fixed term rental agreement (Teishaku). A fixed term rental agreement is required for stays for 30 days or more. The fixed term rental agreement, will have an end date so that the guest will leave the apartment. The fixed term rental agreement can be signed between guest and owner and does not require an intermediary agent.
For properties listed on MetroResidences, owner signs a Pass-through fixed term lease agreement so that MetroResidence can legally sublease the apartment to the guest. In short, the owner leases to MetroResidences and MetroResidences leases to the guest. This system allow MetroResidences cuts down the time needed to process the paper work.
How can owner carry out “Extension or Terminate Agreement” for each guests?
One of the issue with monthly rental is the guest’s right to extension or terminate the contract. Most monthly apartments and serviced apartments company allow guests to terminate or extend their agreement with 15 to 30 day notice.
When owner is doing a hybrid minpaku-monthly, they prefer to know when guest is checking out so that future dates can be booked. For example, if a monthly guest is checking-out 30 March, the owner would block 1-30 April for minpaku bookings. However, since the guest has a 15-30 day notice, this means the owner is unable to release the future date for reservation.
In such instance, owner needs clearly state the extension or termination article in their fix term agreement. In MetroResidences, as 30% of our guest extend their contract due to work commit, we allow guest to extend if they notify us 30 days prior from check out date. Should there be new booking for future dates, MetroResidences will ask existing guest to confirm their termination date before confirming future bookings.
The rules of Monthly Payments and Deposit
Unlike minpaku booking where rental is paid in full, if guest book 6 months, the rental is paid monthly at the start of the month. It is uncommon for owner to ask guest to pay the entire 6 month rental in full. However, if guest stay under 2 months, it is common for owner to request for full payment.
For deposit, typically owner collects a 1 month deposit. This deposit is to reassure that guest does not delay on next month rental and to offset for any damages to the apartment. In MetroResidences, below is the rental payment and deposit system we practice.
| Stay Duration | Rental Payment | Deposit |
| <2 months | Pay Rental in full | 50% of 1 month rent |
| =>2 month | Paid Monthly | 1 month rent |
2 keys to increase reservation, “Apartment Location and Size”
For monthly apartment and serviced apartment stay, Metro and JR access of the apartment is the most important. For most booking, they are looking for easy connection to their workplace so it may mean that apartment that is near offices or industrial area are highly popular. In fact industrial areas sometime have little hotel hence making it very popular for companies to book monthly stays.
In term of apartment size, the most popular are 1K, 1R and 1LDK. 2LDK are also highly popular with foreign expats when they are relocating their family to Japan.
Is “Monthly Rental” clean? comfortable?
Cleaning standards for monthly rental and serviced apartment is very different from minpaku. Guest expects to check-in an apartment that is very clean and do not contain belonging of previous guest or owner.
In minpaku apartment, guest find disposable chopstick, salt, sugar and cooking oil left by the previous guest. Cleaner’s of minpaku apartment will leave such reusable items in the apartment. Such cleaning standard is uncommon for monthly apartment and serviced apartment hence cleaner throws everything away so that next guest will check-in into an apartment that is brand new.
Also, for monthly rental there should be some cleaning equipment such as vacuum cleaner and quick wipe inside the apartment so that the guest can do self-cleaning
Toiletries, Linens and Towel
As guest is staying long term, it is not necessary for owner to provide soap and shampoo for the entire duration of the stay. Providing small bottle of soap and shampoo that can last for 3-4 days so guest can go buy from drugstore. As for linens, it would be nice to provide the guest 2 set of linens and towels since they are washing it themselves.
At the end…
As you can see, there are several differences between “Minpaku” and “Monthly” in term of how to operate. It seems be a bit challenging for Minpaku owners, if you feel confused or want to get advice, please feel contact us MetroResidences! If you own high-quality mansion or apartment in inner urban areas of Tokyo, let us suggest the suitable options for monthly bookings, besides, don’t worry to set up or purchase new appliances, they totally incrude our services. Contact us here; MetroResidences
