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In today's real estate investment field, homestays, as a form of income-generating property, are increasingly attracting the attention of investors. Today, let's delve into the two main models of homestay operation - operation delegation and self-operation, as well as their respective advantages and disadvantages.
Essential Operations of Running a Guesthouse (Minpaku)
Before delving into operational models, let's first understand some essential tasks in managing a homestay.
Booking Reception: Accommodation booking websites like Airbnb and Booking.com are the most commonly used tools for accepting homestay bookings. By creating a property listing page on the site, you can attract potential customers. At the same time, use the website's "messaging feature" to handle questions from potential guests and users, and provide check-in guidance.
Check-in: To ensure a smooth check-in for guests, a system needs to be established, such as handing the key directly to the guest on-site or informing them of the smart lock's code to allow them entry into the room.
Response during the stay: During a guest's stay, handle their inquiries and complaints. Also, in emergency situations, someone needs to be able to arrive on-site promptly.
After checking out: Includes cleaning the room, replacing or washing linens, disposing of trash, replenishing supplies, etc., to ensure the room is comfortable for the next guest.
Reputation management: Guests and Airbnb hosts can write reviews about each other. Reputation management is very important when using booking websites, as reputation scores can influence booking rates.
Operations Agency Model
For those who find it difficult to handle all the operational tasks themselves, entrusting all matters related to running a bed and breakfast to an operational agency is an option. This model is similar to property leasing, where most of the work can be outsourced.
Advantages: The biggest advantage is that it saves effort, as you don't need to spend a lot of time and energy managing various operational tasks.
Disadvantages: Firstly, there is a need to pay agency fees, generally between 15% to 25% of sales to the agency. Additionally, from the perspective of reservation website algorithms, it is difficult for agencies to finely adjust the price of individual properties as they manage multiple properties. This may affect occupancy rates and sales revenue. Therefore, even though agency fees are paid, the income may still not be as high as self-management.
Notable Minpaku (Vacation Rental) Management Companies in Japan
Mister Suite（ミスタースイート）: Mister Suite is a well-known full-service minpaku management company operating mainly in Tokyo and Osaka. They offer a hassle-free, all-in-one management package including price optimization, guest communication, cleaning coordination, OTA (Airbnb, Booking.com, etc.) account handling, and performance reporting. Their pricing typically starts at 20% of the rental income, with customized plans available based on the property owner’s needs.
Rakuna（ラクナ）: Rakuna specializes in legal compliance and revenue optimization for minpaku operations, particularly experienced in handling licensing for simplified lodgings and special district minpaku. They provide comprehensive support from permit acquisition to daily operations. Their fees usually start from 25% of the rental income, covering OTA fees and guest support services.
Akiya Keikaku（空家計画）: Akiya Keikaku focuses on revitalizing vacant homes into minpaku or short-term rental properties. Their typical clients are individual owners or small-scale landlords with unused residential properties. Services include permit acquisition, renovation consulting, and full-service management. The cost structure begins with an initial setup fee of around ¥198,000, followed by 20–30% of rental income.
Minpaku Monogatari（民泊物語）: Minpaku Monogatari takes a consulting-based approach, ideal for beginner investors seeking to understand the operational process, legal requirements, and profitability of minpaku. Their services include registration assistance for the private lodging business, fire safety planning, and equipment consultation. Fees are charged as fixed rates, starting at approximately ¥110,000 for registration support, with additional consulting or operation support priced separately.
Autonomous operation mode
Managing a vacation rental independently doesn't mean doing all the work yourself. In fact, some tasks like cleaning and message handling can be outsourced, and there are also paid systems that can help with price adjustments.
Advantages: Compared to the agency operation model, independent operation offers a larger profit margin because there is no need to pay high agency fees. Moreover, one can manage the homestay more flexibly, respond more quickly to various risks, and maximize profits.
Disadvantage: Independent operation obviously requires more time and effort. Just like in real estate leasing, some people choose to pay a management fee to have a management company take care of things, while others choose to manage themselves. Independent operation demands more personal investment.
Conclusion
In summary, both property management and independent operation have their advantages and disadvantages. For those who wish to enter the homestay operation field, it is important to choose a model that suits their circumstances, such as time, energy, and investment budget. If you lack sufficient time and experience, property management could be a good choice; whereas, if you aim for higher profits and have the capacity and energy, independent operation might be more suitable for you. Regardless of the model chosen, it is crucial to have a comprehensive understanding and plan for homestay operation to succeed in the homestay market.
