The Hidden Costs of Renting an Apartment in Japan

When moving to Japan, many foreigners are shocked by the numerous fees and upfront costs associated with renting an apartment. In addition to the monthly rent, tenants are often required to pay several one-time fees that can add up to a significant sum.

Here’s a breakdown of what you can expect when renting an apartment in Japan.

Real-World Examples

To illustrate how these fees can add up, let’s look at a real example. In 2023, a foreigner looking to rent a 1LDK apartment in the Tamagawa area, on the border between Yokohama and Kawasaki, found a relatively new property with a monthly rent of ¥151,000 plus an ¥8,000 management fee. The upfront costs were as follows:

• First month’s rent and management fee: ¥159,000
• Deposit: ¥151,000
• Key money: ¥151,000
• Agency fee: ¥151,000
• Key exchange fee: ¥20,000
• Guarantor fee (half-month): ¥75,500
• Maintenance fee: ¥45,000
• Fire insurance: ¥15,000

The total upfront cost came to ¥767,500, or more than five times the monthly rent. Of this, only the ¥151,000 deposit was refundable.

Another example comes from a tenant who moved into a 3LDK apartment in Shizuoka in 2022. The total upfront cost was ¥350,000, plus a ¥90,000 early termination fee if the tenant left before the end of the two-year lease.

Key Money (礼金, Reikin)

Key money, or “reikin” in Japanese, is a non-refundable fee paid to the landlord as a token of gratitude for allowing you to rent the property. This fee is typically equivalent to one or two months’ rent and is paid before moving in. While this practice has been declining in recent years, especially in Tokyo where nearly 40% of rental properties are now reikin-free, it is still common in many parts of Japan.

Deposit (敷金, Shikikin)

The deposit, or “shikikin,” is a refundable fee that serves as a security deposit. It is usually equal to one or two months’ rent and is returned to the tenant at the end of the lease, provided there is no damage to the property beyond normal wear and tear.

Agency Fee (仲介手数料, Chūkai Tesūryō)

If you use a real estate agency to find your apartment, you will need to pay an agency fee. This fee is typically equivalent to one month’s rent plus tax and covers the cost of the agent’s services in finding and securing the apartment for you.

Guarantor Fee (保証人, Hoshōnin)

Many landlords in Japan require tenants to have a guarantor, who is responsible for paying the rent if the tenant defaults. If you don’t have a Japanese guarantor, you may need to use a guarantor company, which will charge a fee typically ranging from 30% to 100% of one month’s rent.

Maintenance Fee (メンテナンス費用, Mentenansu Hiyō)

Some apartments charge a maintenance fee to cover the cost of maintaining common areas, such as the lobby, elevators, and outdoor spaces. This fee can vary widely but is often around ¥10,000 to ¥20,000 per month.

Insurance (火災保険, Kasai Hoken)

Renters in Japan are required to have fire insurance, which covers damage to the property in case of fire, explosion, or other specified risks. The cost of this insurance varies depending on the size of the apartment and the level of coverage but typically ranges from ¥10,000 to ¥20,000 for a two-year policy.

Lock Exchange Fee (鍵交換費用, Kagi Kōkan Hiyō)

When moving into a new apartment, you may be required to pay a lock exchange fee to cover the cost of replacing the locks. This fee can range from ¥10,000 to ¥30,000.

Renewal Fee (更新料, Kōshinryō)

If you choose to renew your lease after the initial term (usually two years), you may be required to pay a renewal fee. This fee is typically equivalent to one month’s rent and is paid to the landlord.

Strategies for Reducing Costs

While the upfront costs of renting in Japan can be daunting, there are strategies for reducing these expenses:

1. Look for properties that don’t charge key money or have lower deposits and agency fees. This is more common in urban areas like Tokyo.
2. Negotiate with the landlord or agent to waive or reduce certain fees. This is more likely to be successful if you have a stable income and can demonstrate that you will be a reliable tenant.
3. Consider using a monthly rental guarantee service instead of paying a large upfront guarantor fee. These services typically charge a smaller monthly fee (around ¥3,000 to ¥5,000) instead of a large one-time payment.
4. Look for properties managed by UR (Urban Renaissance Agency), a semi-governmental agency that offers apartments with lower upfront costs and no key money.

Renting an apartment in Japan involves a number of upfront fees that can be a shock to foreigners accustomed to simpler rental systems.

However, by understanding these fees and employing strategies to reduce them, it is possible to find an affordable apartment and manage the costs of renting in Japan. While the system may seem complex and expensive at first, it is a reality of life in Japan that most tenants learn to navigate with time and experience.