27 Oct Upfront Costs of Renting in Japan and What You Can Negotiate
Last Modified on October 8th, 2020 at 04:29 pm
Category: Application Process, Housing, Moving Out, Renting in Japan
So you’ve found the perfect Tokyo rental and you’re ready to apply, only to find out your initial payment is four or even five times the price of the monthly rent! If you’re not prepared for the upfront cost of renting an apartment in Japan, expect to leave the real estate office either disappointed or somewhat light in the pockets. Avoid this pitfall by learning about the various fees involved, budgeting enough to cover them, and not being afraid to ask for a better deal.
First things first, here are the main fees that will make up the initial cost on your rental:
1. Advance Rent
You will be asked to pay one month’s rent in advance (前家賃 zenyachin). If your move-in date is not on the first day of the month, your advance rent fee will be from your move in date to the end of the month, plus the next month. For example, if your lease begins on the 26th of July, your advance rent fee will be the rent for July 26-31, as well as August’s rent.
Please also be aware of the management fee (管理費 kanri-hi) which is added to your monthly rent. We include it in all the calculations on this website, but not all agencies do so. This fee goes to the building management company for the upkeep of the building, building amenities, and common areas.
2. Security Deposit
The security deposit (敷金 shiki-kin) covers your for any damage to the property during the lease period. Also, if you fail to pay your rent or if there is a fee to terminate your contract, that money will be taken from your security deposit. In addition to repair costs for damages (excluding natural wear-and-tear) the cleaning fee may also be deducted. The remaining amount will be refunded to you upon vacating the apartment.
3. Key Money
Key money (礼金 reikin) is a payment made to the landlord as gratitude for accepting your application. This custom, which is now considered by many as obsolete, came about at the end of World War II when housing was in shortage. Although the number of landlords who disregard this fee has been increasing, it is still commonplace. Please note that this money is considered a “gift” to the landlord and is non-refundable.
4. Agency Fee
At Apts.jp, we charge a standard 1 month’s rent (plus tax) as an agency fee (仲介料 chūkai-ryō). This may be unfamiliar to people from countries that don’t have agency fees for rental properties, however, it is common in most real estate agencies in Japan.
As part of our service to you, we not only strive to find you an apartment that suits your lifestyle, but we work hard to negotiate on your behalf and make sure you get the best deal possible. Also, our service doesn’t stop after the keys are handed over. We’ll help you settle into your new home, set up utilities, and continue to take care of any problems you may have during the entire length of your lease.
Depending on the property, other fees may include:
If you have a reliable guarantor, you may not need to pay a guarantor fee. In the case that you are unable to arrange a guarantor, you can hire a guarantor company to be held accountable in the event that you are delinquent on your rent payments, and thus act as an insurance policy to the landlord. The guarantor fee is usually between 30%-100% of one month’s rent plus an annual fee (between 10,000-30,000 JPY).
You can read our article on 8 Things You Must Prepare for Your Apartment Application in Japan to learn more about guarantors and the requirements.
Fire Insurance Fee
Fire insurance covers damage to your belongings in the event of a fire and is a requirement in most rental agreements. If your desired apartment has a fire insurance fee, you can ask your agent for more information on the scope of coverage.
Document Processing Fee
The document processing fee is a charge from the property management company, who manage the property on behalf of the landlord, to handle your application.
The cleaning fee is usually charged at the end of your stay and paid out of your security deposit. However, some landlords ask for it to be paid as part of the initial deposit. To avoid excess fees for cleaning/damages we highly recommend taking photos to document the state of the apartment before you move in.
Lock Replacement Fee
Landlords charge a lock replacement fee to replace the lock on the front door of your apartment. This is for your security and non-refundable.
Residence Services Fee
Some properties offer a 24-hour hotline to handle apartment related incidents, (such as clogged toilets, leaking water pipes, etc). This is covered by the Residence Services Fee. Please make sure to ask your agent the full details of the service.
So… What can you negotiate?
Nearly anything can be negotiated but your success will depend upon a variety of factors. You may not be able to negotiate much if the rent and fees are already below market average. It’s also important to bear in mind that apartments applications are screened on a first-come-first-serve basis. You’ll have more luck with negotiations outside of “busy season” (spring and fall) when the property is receiving less interest.
The following fees may be negotiable depending on the property:
- Rent (But not the management fee)
- Security Deposit
- Key Money
- Advance Rent
- Guarantor Fee
- Contract Renewal Fee
- Cleaning Fee
However, fees are not the only things that can be negotiated when renting an apartment. You may be able to negotiate the move-in date, contract period, and more, so be sure to check with your agent before making a final decision.