{"id":8903,"date":"2019-02-24T19:55:08","date_gmt":"2019-02-25T00:55:08","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/tateru-bringing-digital-innovation-to-japanese-real-estate\/"},"modified":"2019-02-24T19:57:01","modified_gmt":"2019-02-25T00:57:01","slug":"tateru-bringing-digital-innovation-to-japanese-real-estate","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/tateru-bringing-digital-innovation-to-japanese-real-estate\/","title":{"rendered":"TATERU: Bringing Digital Innovation to Japanese Real Estate"},"content":{"rendered":"

Real estate in Japan is a highly competitive industry. The country is similar in size to California [1] but with a population more three times as large. However, due to Japan’s mountainous geography, the population uses only 27% of the total land area [2]. The Japanese real estate industry is operated primarily through a multitude of local offices and can be characterized as highly fragmented. Single-property landlords own a significant portion of the more than 18 million rental residential properties in Japan [3]. These landlords are frequently retirees or heirs who subcontract property management to local real-estate companies.<\/p>\n

TATERU [4], founded in 2006, was born as a property management company with a digital focus. The founders wanted to use web-based SEO instead of physical offices as their primary tool for attracting customers. Their operating model, however, was very traditional, with the company holding land in inventory until selling it along with development and property management contracts to the new landlord. The financial crisis of 2008, which produced a drop in demand for real estate and which exacerbated the impact of debt on balance sheets, almost drove the company to bankruptcy.<\/p>\n

As a response to the crisis, TATERU shifted its strategy in two significant and innovative ways. First, the company\u00a0migrated to an “asset-free” property management system, where the landlord became responsible for purchasing the land for development directly from the previous owner, and TATERU only responsible for developing the property and providing ongoing property management services, significantly reducing the debt burden. After implementing this shift, the company became debt-free in 2011.<\/p>\n

At the same time, TATERU started to develop its web platform, TATERU Apartment, which allowed for the implementation of a “one-stage” solution for landlords. The platform is innovative in a variety of ways:<\/div>\n
    \n
  1. The platform provides prospective landlords with information on available land offerings\u00a0throughout the entire country, which are gathered from over 50,000 real estate agencies.<\/li>\n
  2. The platform provides the landlord with recommendations for sources of financing.<\/li>\n
  3. The platform\u00a0provides recommended pre-approved floor plans and blueprints for standardized designer apartment buildings in the newly-acquired land. The platform uses marketing and survey data to suggest designs which will maximize occupancy rates.<\/li>\n
  4. The platform notifies the landlord when an online application is received and approved. The company screens tenants and guarantees rents to the landlord.<\/li>\n
  5. Finally, since the process can be complicated for a first-timer, the app provides consultations via chat without the need for an office\u00a0visit or the scheduling of an appointment.<\/li>\n<\/ol>\n

    TATERU thus participates in the full life cycle of the property: land acquisition, development, property management, and tenant acquisition and management. By creating a system where a new landlord is able to own properties in any place of the country, and where a mobile app can be used to conduct all interactions between landlord and property manager, the company has created differentiated advantages over traditional real estate companies; this is proven by the company’s occupancy rate (97.9%), which is much higher than the average for rental properties (~86%) [3].<\/p>\n

    With the advent of the Internet-of-Things (IoT), TATERU is now leveraging the platform as a tool for controls in individual properties. The company offers “kits,” which allow landlords or tenants to use the app to control features such as the apartment temperature, TV, lighting, locks, -and security, and which can be linked to an Amazon Echo. The company has now used its app to develop over 13,000 properties in Japan, and with a younger user base than its competitors (78% of its landlords are under 50), is looking to continue to use technology to keep\u00a0growing into the future.<\/p>\n

    References<\/p>\n

    [1] “Japan is around the same size as California,” https:\/\/www.mylifeelsewhere.com\/country-size-comparison\/japan\/california-usa<\/p>\n

    [2] “Geography of Japan,” https:\/\/en.wikipedia.org\/wiki\/Geography_of_Japan<\/p>\n

    [3] Japanese Statistical Yearbook,\u00a0http:\/\/www.stat.go.jp\/english\/data\/nenkan\/68nenkan\/zenbun\/en68\/index_h5.html#490<\/p>\n

    [4] All information for TATERU obtained from both its original Japanese website,\u00a0https:\/\/www.tateru.co\/, as well as its English version\u00a0https:\/\/www.tateru.co\/en\/<\/p>\n","protected":false},"excerpt":{"rendered":"

    TATERU uses a web-based application to allow landlords to source, acquire, and develop apartment buildings all over Japan, and to integrate IoT capabilities into their operations.<\/p>\n","protected":false},"author":9870,"featured_media":8912,"comment_status":"open","ping_status":"closed","template":"","categories":[304,16],"class_list":["post-8903","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-iot","category-real-estate","hck-taxonomy-organization-tateru","hck-taxonomy-industry-real-estate","hck-taxonomy-country-japan"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/dig-it-blog-post-assignment-i-innovative-platforms\/","yoast_head":"\nTATERU: Bringing Digital Innovation to Japanese Real Estate - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/tateru-bringing-digital-innovation-to-japanese-real-estate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"TATERU: Bringing Digital Innovation to Japanese Real Estate - 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