Property management Company in Tokyo

Kyoto Properties
Proposal

Proposal
Overview

We would like to enter into a management contract with FANSS INTERNATIONAL for the following properties:

Guesthouse Shijyo
Takatsuji Apartments
Château Victoria Apartments
Guesthouse Nishijin
All other properties in Kyoto available for management or which we could develop together

PBKK desires and Fanns International agrees in principle, that PBKK shall manage Fanns International Kyoto properties for a period of 5 years from the purchase date, whereupon the capital gains tax upon sale becomes significantly less. PBKK believes it can deliver a higher level of support and performance to Fanss International compared to the current management company.

The parties hereby indicate their understanding, that a significant change in market financial conditions may require a different course of action to be discussed and agreed to by the parties. Therefore, the term of the management contracts shall be deemed to be flexible.

PBKK has entered into many master lease agreements in the past with owners and companies. At the time of entering into these agreements, PBKK either had full financial information regarding the buildings past historical financial performance or was managing the building at that time and the management agreements were converted to master lease agreements.

Financial information is defined to include a year of previous rent rolls indicating tenants’ contract terms, rent paid, occupancy/vacancy rates, operating expense information, such as utilities, maintenance costs, and any other monthly fixed or variable expenses. Blueprints of the buildings were also provided.

In this case, most of this historical information is missing and a creative approach is necessary to make master lease proposals for each property. PBKK will need to organically collect this data on it’s own. Therefore, PBKK proposes a flexible 6 month management period for each property, which will thereafter convert to a master lease upon discussions and agreement by Fanss International. This will give PBKK time to analyse the financial performance of each property and share this information with Fanss International. PBKK believes this information will be valuable for Fanns International as well for their current investments and potential future investments.

PBKK desires that Fanss International inform PBKK of the desired return on investment for each property, as PBKK is not aware of the purchase costs, terms of the loans.

MANAGEMENT SERVICES TO BE PERFORMED

PBKK would be responsible for the following management tasks:

Maintaining Rent Rolls and monthly financial information for the properties.
Advertising the rooms.
Taking new photographs of the rooms.
Reforming, furnishing, design and setup for the rooms.
Open Houses and showing the rooms.
Arranging people moving in and departing.

Interior and exterior cleaning and normal minor daily maintenance.

Key Elements

PBKK will rebrand and create new websites (www.modernlivingkyoto.com (?), advertising and social media campaigns for Shijiyo and Nishijin Guesthouses and the furnished apartments. By comparison, most guesthouses and monthly furnished apartments in Kyoto have their own websites:
- http://www.piecehostel.com/jp/
- https://backpackersjapan.co.jp/kyotohostel/hostel/
- http://kyoto.khaosan-tokyo.com/ja-jp
PBKK will assist Fanss International to slowly convert Takatsuji and Château Victoria to furnished apartments for couples as tenants leave. This will significantly improve the financial performance of the building and sales value.
PBKK will manage each property for approximately six months before converting to Master Leases:
- Guesthouse Shijiyo: 20% Management Fees
- Guesthouse Nishijin: 20% Management Fees
- Takatsuji Apartments: 10% Management Fees (will include free website)
- Château Victoria: 10% Management Fees (will include free website)
After converting all properties to master leases, PBKK and Fanss International will review the Master Lease Agreements for each property quarterly and adjust the payment schedules according to the parties agreement after each review concludes.

Cost Allocation

- Items provided by PBKK with no additional charge:

Creation of a branded website for Kyoto furnished apartments provided by PBKK (approximately a ¥1,000,000 value (a custom WordPress theme will cost around ¥300,000 – ¥600,000 (for design and development), and a custom WordPress website is around ¥600,000 – ¥1,500,000 (for design and development, with custom plugins)
Domain name registrations
Setup for Smart Rent Rolls for all properties, API configuration, server and database
Create an Advertising Campaign
Basic Advertising expenses (certain additional costs may require discussion with Fanss International, though doubtful)
Room design and setup for furnished rooms.

- Items which Fanss International is requested to pay for the expenses:

Onsite reception staff for the Guesthouses (This staff can perform management work for the apartment buildings in the future, to be paid for by PBKK).
Renovation and maintenance (labor and materials)
Furnishing expenses (for setting up furnished apartments)
Photography
Cleaning expenses, for Guesthouses, paid for by Fanss International, for Apartments (same system as Regalia Minami-Azabu, mostly paid for by short term guests, charged in full to long term tenants), common areas and general cleaning, paid for by Fanss International
Insurance
Utilities and Sewer
Taxes
Smart Internet installation (all future tenants will be charged a small monthly fee thereby creating additional return on investment for Fanss International)
Creation of guesthouse websites, cost estimates to be provided later as approved by Fanss International (need full property descriptions and photos)
Monthly website hosting expenses (approximately ¥2,500)
Unforeseen miscellaneous expenses
Use of the available office space temporarily until PBKK can find a permanent office location
Permission to rent an apartment, paid for by PBKK

Suggested Property Improvements

Free bicycles for use by Guesthouse residents.
Subsidized Internet and TV services for a reduced monthly fee to be included in the tenants contract, producing extra revenue for Fanss International (Smart Internet System coupled with a local TV provider, for Takatsuji Building and Château Victoria Building).
Creation of a Websites for Guesthouses Shijyo, Guesthouse Nishijin, and all future Guesthouses under management.
Cosmetic renovation and beautification as necessary. For example, the stairway of the Takatsuji building, will produce higher occupancies, increases in rental income and the sales value of the buildings (Pictures in appendix A).
As tenants depart, furnishing vacant apartments as single or double occupancy (couples) rooms, will produce higher occupancies, increases in rental income and the sales value of the buildings.
Explore options for green energy improvements, such as solar energy and water, which often come with tax incentives. This will decrease operating expenses and increase the sales value of the buildings.