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“Rent” is probably the word that comes to mind when someone brings up the topic of leasing an apartment.
However, in Japan, there are various forms of initial expenses and rules other than your“rent”, and these expenses are often puzzling for people who aren’t used to this Japanese custom.
In this article, we will introduce the typical methods of renting a home, and what to do if you’re a foreigner in Japan.
What expenses are there other than rent?
| Item | Estimated cost | Description | |
| Kanto area | Finder’s fee | 0~2 months worth of rent | A one-off payment to the landlord. The fee has is suggestive of an honorarium, so even after the end of the contract, you typically will not receive this money back. The fee varies based on customary practice and is not grounded in the law. The exact amount also varies between different regions. |
| Security deposit | 1~2 months worth of rent | A deposit that is paid to the landlord. It exists to cover rent payments during times when you aren’t able to pay. It is general practice for the remaining balance of the deposit to be returned at the end of the contract. According to The Ministry of Land, Infrastructure, Transport and Tourism’s “Guidelines for Restoration to the Original Condition”, the tenant is not obliged to cover the expenses to restore the property to its original condition if there are no damages or stains. | |
| Kansai Area | Deposit | 4~7 months worth of rent | An expense that is incurred when you contract for a property in the Kansai Area. It is similar to the “security deposit” paid in the Kanto Area, so there are often cases where it also covers the renovation fee. |
| Restoration fee | 2~4 months worth of rent | An expense that you can definitely get back when you end the contract (it is not something you pay as an initial expense) | |
| Advanced payment of rent | 1 months worth of rent | When you pay rent for the second month of your contract at the time of contracting. | |
| Per-diem rent | The per-diem cost of your monthly rent | The per-diem (daily rent) is calculated from your monthly rent | |
| Intermediary commission | 1 months worth of rent + consumption tax | A commission paid to the real estate agency that operates the intermediary | |
| Fire insurance | 15,000¬20,000 JPY | It is an obligation for properties to be insured by fire insurance. In general, it is valid for 2 years. | |
| Costs for lock replacement | 10,000¬20,000 JPY | Depending on the property, there may be a fee for renewing the lock when you move in |
It is interesting to note that there are differences between the Kanto and Kansai region. What is known as a “security deposit” and a “finder’s fee” is equivalent to a “deposit” and a “restoration fee”, respectively.
Please be aware that this terminology tends to vary from region to region.
What’s a finder’s fee?
What foreigners often find strange when it comes to expenses related to rent is the “finder’s fee”. Whilst the existence of this fee varies around different regions of Japan, there are hardly any other countries in the world which have it. Since you’re already paying a security deposit of some sort, it may be hard to wrap your head around why people pay an additional sum of money as an “honorarium” to the landlord. The custom of Japan’s finder’s fee was developed the pre-war days as “regulations”. It is said that the landlord took the finder’s fee in advance because it was becoming difficult for them to raise the price of rent.
What’s a contract-renewal fee?
This is something that is also hard to understand, like the finder’s fee. It is a general rule that applies especially to properties in the Tokyo area and Kyoto. Foreigners may be wondering, “why does it cost money to extend the contract when it’s beneficial to the landlord?” Overseas, it is common for 1 months worth of rent to be waived when renewing the contract.
Recently, more and more landlords are choosing to drop this rule that is unique to Japan. However, as a consequence, they may raise the rent slightly instead. As a tenant, make sure you contract after making sure of the conditions and expenses related to your rent.
Overseas, it is common for the deposit to be refunded in full
In actual fact, there is a rule unique to Japan when it comes to the deposit. Damages and cleaning at the time of moving out is “the responsibility of the tenant”, but there is also a process where the landlord deducts a portion in the form of a “restoration fee”. There are countries where the deposit is paid to neither the real estate agency or the landlord, but a third-party. Whilst this is an extremely good system, it has yet to become common practice in Japan.
In Japan, after moving out of a property, the property management company will deduct the fee paid to the contracted cleaning company and restoration fee from your deposit, and the remaining balance will be returned. There are also cases where the deposit is not enough to cover these said fees, and you are requested to cover the rest.
Initial expenses incurred when moving house
Calculated for a person living alone with a monthly rent of 70,000 JPY (the per-diem rent is calculated under the assumption that you move in on the 15th day of the month)
| Security deposit | 140,000 JPY (2 months worth of rent) |
| Finder’s fee | 140,000 JPY (2 months worth of rent) |
| Advanced payment of rent | 70,000 JPY |
| Per-diem rent | 35,000 JPY |
| Intermediary commission | 75,600 JPY |
| Fire insurance | 15,000 JPY |
| Costs for lock replacement | 10,000 JPY |
| House-moving expenses | 30,000 JPY |
Total 510,5600 JPY
Tenant-screening is tough for foreigners
It is said that it was easy for people attending a Japanese university or educational institution to pass the tenant-screening for a student dormitory or homestay.
This is the same for people who attend schools to learn Japanese with the hopes to work in Japan, or people who have learnt Japanese in their home country and have studied Japanese society and history etc. prior to coming to Japan.
What is important is being able to come to a mutual understanding with the real estate agency.
There may be fears that you won’t be able to communicate to solve problems if you get into some sort of accident, trouble, or other scenario when you need to reach out.
【You have the ability to pay】
Work-related questions are key.
If you are already working, it’s best to ask your company to write you a certificate of employment, because there are cases where it will be required by the real estate agency.
Furthermore, those who have received an unofficial offer from a company will need to request a job offer certificate.
The real estate agency will be testing to see if you are able to pay your monthly rent, so you should prepare some documents proving your ability to do so.
【Residence qualification】
You are required to show proof that you are qualified to enter and reside in Japan.
You probably have this from when you had to obtain permission to pass immigration to enter into any given administrative division of Japan.
In order to prove that you aren’t staying in Japan illegally, you may want to prepare your Certificate of Eligibility for Resident Status.
【Residence Card】
The permitted length of stay in Japan varies from person to person.
For example, there are short-term exchange students and long-term permanent residents.
Foreigners who will stay in Japan for a medium-long term are issued a Residence Card. Depending on the real estate agency, you may be required to produce this card.
【A Joint Guarantor】
A joint guarantor is required whenever a property is to be leased.
When you are leasing a room, you will be able to pass the tenant-screening easier with a Japanese person as your joint guarantor.
However, if you don’t have a Japanese person to be your joint guarantor, you may like to consider utilising the services provided by foreigner-catered guarantee companies.
It is important for you to know the Japanese rules that exist when you are looking to rent a property in Japan.
For example, you must follow the rules of garbage collection and be mindful of keeping quiet at night.
You may feel slightly uneasy in an environment that you haven’t gotten used to yet, but do your best to follow the rules after you’ve passed the tenant-screening!
Choose a homestay or share house for your first stay in Japan
If you are going to rent a property in Japan, you will definitely incur initial costs and can’t avoid the problems of finding a joint-guarantor or dealing with deposits and finder’s fees.
Therefore, we suggest that you go for a homestay or share house if it’s your first time staying in Japan.
The monthly rent is cheap for both cases, and you don’t have to pay a deposit or finder’s fee.
Homestays aren’t that common in Japan, but in recent years , more and more families are opening up their homes.
In a homestay, not only do you get the benefit of cheap rent, but you will also be able to learn about Japanese culture and experience what it’s like to have a family in Japan.
If you are looking for a property in Japan, there are many other options other than renting, so make sure you pick something that best suits how you want to live!
If you’re looking for a share house in Japan, we recommend that you also have a read of the following article.
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