How to Rent an Home in Japan

How to Rent an Home in Japan

In this article, I’d like to step through the process and show the options for rending a home in Japan. While it’s highly standardized, it can also be very frustrating without the right approach and expectations.

Options

To start with let’s look at the five main options available.

  • Apartments - Are a self-contained housing unit that occupies only part of a building. Generally, these have wooden frames and outer walls and one to three stories tall.
  • Houses - stand-alone homes, typically only found outside of large cities. I believe these are similar to renting Apartments; however, I have not had any direct experience with renting a home.
  • Mansions - Unlike the term in English, “mansions” in Japan are not only for the rich and famous. They are very much like Apartments however they have steel frames and brick outer walls. Overall, they are much stronger, have many more floors, and can have many niceties like gyms, rental party rooms and the like.
  • Share Houses - a large building with multiple bedrooms and shared common areas that the residents share such as bathrooms, living room, kitchen, etc. Initially, these started as an inexpensive housing option targeting foreigners they have become much more.
  • Urban Renaissance (UR) - is a semi-public housing complex that’s partially owned by the Japanese government. For the most part, they are similar to Mansions however without all of the extra niceties such as gyms, etc. but they do have some financial benefits which we will discuss below.

In recent years due to TV shows such as Terrace House, share houses have become much more popular with Japanese. Many now focus on building communities for people that don’t want to live alone. For example, some are women-only while others are a balanced mix of women and men. I’ve also seen share houses where everyone works in IT or where everyone love wine, etc.

Where to Start

Property owners usually rent via licensed real estate agents and use property management companies to handle the day-to-day. Agents work to find renters for the property owners in specific areas. They have offices located near train stations where you can work with the agent to search and visit properties in the surrounding areas.

The one exception to this is Share Houses. Usually, they are rented directly by the companies that own them without agents. They also handle day-to-day operations such as maintenance and cleaning.

Most websites, contracts, etc. are only in Japanese. It’s also difficult to find agents that speak English, but it’s becoming more common. Here’s a list of the most famous agents in Japan as well as some smaller ones that I’ve used in the past. For UR’s, these can be rented directly from the UR companies as well as from Real estate agents.

Real Estate Agents

Share Houses

Security Deposits - Shikikin

Similar in other countries security deposits are a fully refundable deposit. They are used to protect the owner from significant property damage outside that of regular daily use. In the case of pets, generally, add one to two months additional rent.

  • Apartments & Mansions: 1-2 months rent
  • UR’s: 2-3 months rent
  • Share Houses: 1/2 months rent

Key/ Gift Money - Reikin

Key or gift money is perhaps the most controversial fee that surprises many people. It roughly translates as “gratitude money” and is used to thank the property owner for renting to you.

Usually, apartments and mansions charge one to two months rent, Share houses and UR’s do not charge key money.

When I first moved to Japan, I was against paying key money. After a few years, I found that many of the mansions in popular areas charged it, so I finally gave in. To make it easier to accept, I merely started calculating it as part of the rent and ignored the “gift” part.

Guarantors

These are insurance-like companies that owners use to protect themselves from non-payment in the unlikely event that a renter loses their job or is otherwise unable to pay their rent. Guarantors pay the owner and then works with the renter for repayment. While not always required to be a company, some owners allow renters to have their friend or family member act as a guarantor. Usually, a half months rent.

Lock Change Fee

When renting apartments, mansions, and UR’s it is common to install new locks when you move in. It’s to ensure that the previous renter no longer has access or an extra key to the property and can cost between 20,000 to 50,000 JPY. Share Houses usually have a combination lock on the outside door that’s changed every few months; however, the door lock is not replaced.

Cleaning Fees

The lease will include any standard cleaning fees. These are common with Share Houses and are generally 15,000 to 20,000 JPY. For Apartments and Mansions, it depends on the renal property, but I would expect them to be less than a half months rent.

I have heard of some owners charging much higher cleaning fees or even trying to keep the full security deposit. It’s highly recommended to take photos when you move in and out. Also, if the owner does attempt to charge you more than what’s stated in the lease ask for an itemized invoice. In many cases, the extra fees will be dropped.

Leases

Real estate laws in Japan are strong for renters. Agreements are generally two years for apartments and mansions and one year for share houses. They focus on protecting renters from unexpected price increases during the contract.

They also stipulate the required notice period, usually, one to two months, if the renter wants to terminate the lease early as well as the renewal fee, usually one month rent, every two years. It’s typical for apartments and mansions to charge renewal fees however UR’s and share houses do not.

Lastly, contracts will also have specific sections stating if you can have pets or of if you can operate a business from your home.

Fees

While not an exhaustive list here’s a break down of the different fees and provide an estimated move in cost.

  • First Month’s Rent
  • Agent Fees
    • Apartment / Mansion: 1 month (some agents only charge 1/2 month)
    • Share House: N/A
    • UR: N/A
  • Security Deposit (refundable)
    • Apartment / Mansion: 1 - 2 months rent
    • Share House: 1/2 - 1 month rent
    • UR: 2 - 3 months rent
  • Key/Gift Money
    • Apartment / Mansion: 0 - 2 months rent
    • Share House: N/A
    • UR: N/A
  • Guarantor
    • Apartment / Mansion: 1/2 months rent
    • Share House: 1/2 months rent
    • UR: N/A
  • Fire Insurance
    • Apartment / Mansion: 20,000 - 40,000 JPY
    • Share House: 10,000 - 20,000 JPY
    • UR: N/A
  • Lock Change Fee
    • Apartment / Mansion: 20,000 to 50,000 JPY
    • Share House: N/A
    • UR: 20,000 to 50,000 JPY

Final Thoughts

When moving its also crucial to remember to setup utilities like gas, water, and electricity. You generally do not need to worry about these for share houses; however, it can sometimes take a couple of days to schedule the necessary services.

It can also be useful to submit a change of address request to the Japan Post. They will forward any mail to another address in Japan for up to six months for free.

Lastly, the timing of the year can have a lot of impact on your ability to both rent a new home as well as find moving companies, etc. Most new graduates move to Tokyo in March every year. It is also the same time of year when intercompany transfers happen. For the best rental details, I’d recommend moving between April and December.

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Charles
Charles Founder of Gaijin Money, highly interested in personal finance and investing.
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