With new Minpaku (Vacation Rental) regulation starting in June 2018, a lot of owners who are running Minpaku, monthly apartments and serviced apartments are wondering how they can maximize their earning.
The new regulation requires booking platforms (such as Airbnb, Homeaway) to verify that the property has an approved Minpaku Permit Number. Booking platforms have to submit all booking data the regulators 2 times per year. The regulation also makes the owners responsible to submit their booking details once every 2 months to government.
Such strict tracking will ensure property owners do not go over the 180 days quota. While it is hard to enforce the quota, should owner get any complain from building management or neighbours, the regulators will have booking data to check if you exceed the quota. Hence it is important for owner to market their platform on minpaku platform and monthly rental platform to maximise rentals.
For owners that earns mostly from minpaku platforms, rental income maybe half due to 180 days regulations. For property management companies of serviced apartment or monthly mansion, this created an opportunity to make extra rental income. This new regulation requires owner to adopt a new way of managing apartment inventories.
One of the biggest issue is that it is hard to mix monthly and daily reservations. For example, if Guest A books 3 night booking from 15 – 18 February, should Guest B book 3 months for 1 January to 31 March on a Serviced Apartment platform, the owner is unable to accept it. At MetroResidences, we recommend owners to practice hybrid Minpaku-Monthly management to maximise rentals. For this article, we would like to divide the owners into 2 categories – 1) Building Owners/Property Management and 2) Individual Owners.
Building Owners/Property Management
These are owners who have >10 units in 1 building that are managing serviced apartment or monthly mansion. With multiple units, it is easy to allocate 10 apartments for minpaku bookings & 10 apartment for monthly apartment or serviced apartment bookings. The owner can adjust the room allocation of monthly and minpaku inventory easily to meet the demand during certain periods.
In order to mix and match daily and monthly apartment booking, the owner needs a strong property management software. The software must allow them to allocate apartment room to each booking so that to maximise occupancy and balance the 180 days minpaku quota linked to each unit.
Individual owner usually rent out their own homes for minpaku. Some owner are running a small business by subleasing several to tourist and usually manage under 10 properties. As they have limited units, we recommend owners to practice the following:
Owner to prioritise monthly apartment rental and fill the empty days with daily bookings from minpaku platforms. As monthly apartment rental are more stable and they stay longer (on average 3 months), it would be wise to a monthly booking. For example, if owner has 2 monthly booking, 1 January to 31 March and 1 May to 30 June, the owner can use minpaku platform for April. The Monthly First way of managing booking will maximum occupancy of the apartment. For some of MetroResidences properties managed Monthly First, we have achieved an average of 90% occupancy of which 80% are monthly apartment and 20% are minpaku.
Maximise Daily Booking
For owners interested to maximize daily booking, we recommend assign a conservative 6 months during peak tourist season. For the other 6 months, it can be rented out monthly.
This strategy owner will maximise minpaku rentals. However they may miss out the peak corporate season that starts 1 April. Also, as most companies allow their staff to return home during Christmas and New Year, hence there might be some gaps periods but it can be easily rented out as minpaku. We do not recommend owners to block 6 month that is non-consecutive for minpaku booking. This is because during those gaps months (example January), it is hard to find a monthly guest looking to stay during those exact dates. Also, monthly booking are typically looking to stay on average 1 to 3 months.
Owner who practice good hybrid management for Minpaku and monthly will be able to maximise their rentals. While it may not be as attractive as running 100% daily business, a mix of daily and monthly rental income is still better than long term rental.
MetroResidences assist owner of premium apartments to be rented out as a serviced apartment or monthly apartment to companies and individuals looking for corporate stays. All MetroResidences apartment are inspected to ensure high quality, good access to office and in a nice neighbourhood.
-Is my apartment suitable to be listed on MetroResidences?
-6 challenges of “mixing daily and monthly booking” how to overcome it.
– Good locations and building for minpaku and monthly in Tokyo
-How to set pricing for monthly rental