Tokyo What are the surprising rules behind the sale and purchase that generated a huge profit of 240 million yen by managing repair reserve funds for a Musashi-Kosugi condominium？
The surprising rules of “buying and selling” that made a huge profit of 240 million yen by managing the repair reserve fund of a “tower mansion” in Musashi-Kosugi | aera dot. 2024/08/16/ 07:00 Table of Contents Page 1 – 240 million yen profit in 15 years – “Increase by managing” the repair reserve fund – Only active management Page 2 – “Fixed-term deposits are a waste” – From the perspective of an asset management professional – “Only high-rated corporate bonds have zero interest rates on government bonds” Page 3 – How to balance the two risks – The upper limit per transaction is “about 100 million yen” – Rules for buying and selling are clearly stated in the regulations – There are no asset management professionals on the board of directors The shortage of “repair reserve funds,” the source of funds for repair work on apartment complexes, is becoming serious. According to the Ministry of Land, Infrastructure, Transport and Tourism, the percentage of apartment buildings with insufficient reserve funds has roughly doubled in the five years up to fiscal 2018. On the other hand, there are condominiums that have actively managed their reserve funds and generated large profits. [Actual photo] Huge profits from managing repair reserve funds, here is Musashiko’s tower mansion *** 240 million yen profit in 15 years “We made about 240 million yen profit from 15 years of asset management.” These are the words of Shimura Jin, the representative director and vice president of the management association for the tower mansion “Park City Musashikosugi Mid Sky Tower” in Kawasaki City, Kanagawa Prefecture. This profit is the combined total of profits from the management of physical assets, such as renting out the on-site parking lot, and from the management of financial assets using repair reserve funds. In recent years, it is not uncommon for apartment complexes to rent out their parking spaces to outside tenants. However, the current situation is that “it cannot be said that management associations are actively managing their funds” (Daiwa LifeNext Mansion Future Value Research Institute). Under these circumstances, the management association corporation is currently managing just over 2 billion yen in corporate bonds. Why were they able to “increase” so much? “Invest and increase” repair reserve funds Apartment buildings undergo planned repairs (long-term repairs) every certain number of years. The repair reserve fund is set aside for that purpose. However, in these aging apartment buildings, the residents are also aging. Even if residents try to increase contributions in preparation for large-scale renovations, it is often difficult to do so due to reasons such as “it would interfere with their daily lives.” As a result, the option of “increasing through investment” is gaining attention. For the management association, the reserve fund is a fixed monthly income, but actual expenses for renovations and the like only occur every few years to every dozen years or so. That means there will be periods when there will be a lot of money. According to the “2023 Comprehensive Survey of Condominiums” conducted by the Ministry of Land, Infrastructure, Transport and Tourism, 1,522 management associations nationwide that have a repair reserve fund system were asked to select multiple options for where they would like to invest the reserve fund, with the following results: There were 1,169 bank ordinary deposits (76.8%), 534 time deposits (35.1%), 390 non-interest-bearing settlement deposits (25.6%), 290 “Mansion Sumairu Bonds” from the Japan Housing Finance Agency (19.1%), 22 installment-type condominium insurance (1.4%), and 2 government bonds (0.1%). When managing assets for management associations, the primary focus is on managing the assets in a way that avoids loss of principal. However, the Mansion Future Value Research Institute states, “In this era of low interest rates, low-risk financial products alone will not increase your funds. “It is clear that this will not help resolve issues such as the shortage of repair reserve funds.” Next page: “Fixed term deposits are a waste.”
>>1 You don’t just buy an apartment and then it’s over. You have to save up for maintenance and maintenance fees, like rent. And property taxes. A detached house is better.
Musashi-Kosugi Urayasu Nagareyama What they have in common is that there are a lot of self-conscious, deluded, wealthy people who try to gain superiority by calling the older residents “rough, vulgar, and poor.”
It seems like there would be conflict when deciding on a policy, but I guess being able to compromise on that is what being a professional is all about.
With a large apartment complex, the amount of money collected is incredible, so eventually someone will run off with it. One solution might be to not carry cash.
I guess it was possible because the condominium was well-organized and the people who gathered had personal management experience. It would be impossible if the board of directors had people who were trying to use the reserve fund to satisfy their own personal desires.
>Ultimately, the conclusion was reached that “only highly rated corporate bonds” had a very low chance of losing principal and offered high interest rates. I just hope that we don’t end up in a situation where a major earthquake causes poop to flow and corporate bonds to become worthless.
These are the words of Shimura Jin, the representative director and vice-chairman of the management association for Park City Musashi-Kosugi Mid Sky Tower, a tower apartment building in Kawasaki City, Kanagawa Prefecture. It’s amazing that the management association for a high-rise apartment building is a corporation.
Your pensions are being managed without your consent. During the historic crash the other day, your pensions were nearly wiped out, but they were quickly corrected. The yen will not appreciate any more.
It’s scary to think about what high-rise apartments will be like in 50 years’ time. Just when you retire and can no longer work, the lifespan of your home will be over and you’ll no longer have a place to live.
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