Renting an Apartment in Japan

Sep 05, 2011

Renting an Apartment in Japan

Many people come to Japan through a company. An English Teacher, for example, will usually get off the plane and be met by a representative of their new company, who will take them to their new apartment, which has been rented and furnished for the new employee’s use. Depending on the company, this may or may not be a good deal, but it is easy.

Expats will also usually have the benefit of a relocation company, like Relo Japan, that will take care of all the little details of the employee’s move, including finding them a house or apartment, car, and leasing or arranging the delivery for the client’s things from their home country. Generally, the company will pay for these services as well.

Getting an apartment on your own can be a daunting task if you have never done it before. It seems like just about everything is a little harder in Japan, and if you do not speak Japanese your options are fairly limited. One of the first differences between Japan and the west is that apartments and houses are rented through real estate agents, rather than landlords. This is why you rarely see “for rent” signs in front of apartments, and when you do the contact information is a local real estate branch office.

This can be convenient, because if you go to the office of an agent in the area you want to live you will find listings in the area ready and waiting for you. Not every agent lists every property, so it is best to shop around a bit.

If you can read Japanese, there are also some publications that list available properties.

Traditional Real Estate Agents

While traditional real estate agents have the bulk of the available properties in Japan, they are not really set up to be foreigner friendly. Many landlords are simply not willing to rent to foreigners in general, and especially to those who do not speak any Japanese. I remember getting my apartment, and I heard the agent say to my prospective landlords over and over again, “He is foreign, but he is from the United States and speaks Japanese. “ Usually, this was followed quickly by, “Oh, really? I understand, thank you for your time.” I actually felt bad for my agent, as the list of properties he was able to show me got smaller, and smaller, until we were left with about 5- from over 20. Getting a foreigner into an apartment can be a challenge. The agent will work on your behalf though; that is how they get paid!

Landlords often also require a guarantor to co-sign on a lease. Any Japanese national with a stable financial background and an official name stamp (hanko) will do, but you can also use a guarantor company, who is paid to take the risk of guaranteeing you. Guarantor companies are expensive, and, often the guarantor companies themselves will not accept a foreign client. Many Japanese agents now use guarantor companies more often than regular guarantors. If they use the same company all the time, they can work with one point of contact when there is a problem, instead of having to chase down the individual guarantor, which can be difficult.

When renting from a traditional real estate agent, you can expect to need a lot of upfront cash to get into an apartment. There are many different kinds of refundable and non-refundable fees that must be paid; often totaling somewhere between 1-6 months’ rent-seriously. The fees can vary greatly depending on the motivation of the landlord to lease the property, the location, age of building, etc. Looking at these fees is one of the ways many people decide on one location over another. It is sometimes possible to negotiate the fees down, but usually this is not the case. Fees are usually discussed in terms of months of rent.

Japan Real Estate and Housing Terms to Know

Rent (Yachin 家賃) 

Rent is usually paid monthly, in advance to the owner. In some cases there is a late fee if payment is overdue. (Fortunately, not in my building!)

Reservation Fee (Tetsukekin 手付金) 

The tetsukin is paid to reserve the apartment once you have decided on one, but before you have signed the contract. Once you have paid this, the apartment cannot be given to someone else out from under you, but you cannot change your mind without losing your deposit. This fee is paid when you apply for the apartment, and is usually given back to you once the contract is signed. Generally, this fee will be about 1 months’ rent.

Deposit (shikikin 敷金)

As the name implies, the shikikin covers possible future damage to the apartment during your tenancy. When you notify the landlord you will be moving out, they will perform an inspection, and you will receive back your deposit, minus the cost of any repairs that may be required. Some landlords have been known to inflate damage estimates, in order to keep more of you money. This deposit will generally be a few months’ rent.

Key money (reikin 礼金)

Key money seems to be the fee that everyone knows about. It is a non-refundable payment, essentially a gift to the landlord that can be anywhere between 0-6 months’ rent. This one really bothers some people, including me, but that is how it is done in Japan.

Real Estate Commission (chukai tesuryo仲介手数料)

The service fee is the real estate agents fee for brokering the deal for the apartment; it is of course, non-refundable. You can assume this fee will be at least 1 months’ rent, and it may be more.

Maintenance Fee (kyoekihi共益費) 

A monthly fee for general building maintenance, including grounds and up keep of the structure.

Other Things to know 

Apartments will generally come unfurnished; sometimes you will even need to provide the light fixtures in an apartment you rent. These are truly empty rooms. Furnished apartments are available, but these are the exception, rather than the rule, and they are much more expensive. My apartment, however, came with light fixtures, an air conditioner, and even an air cleaner, so be sure to ask what is included before you move in!

Apartments in Japan will generally not include utilities in the rent, although some do include fees for water usage. If pets are allowed, which is rare, you will find the fees to be very high, and paid on a monthly basis. Pet fees generally run between 5,000-10,000 yen per month, but they can be significantly more. Parking as well, may or may not be included, but usually it will be an extra fee. Parking fees will run somewhere between 5,000- 30,000 yen per month; depending on location.

Real Estate Companies for Foreign Customers

As it can be much more difficult to get foreign clients into homes and apartments, real estate companies like Japan Home Search have stepped in to specialize in those client’s needs. While such niche markets are large, there are not that many, and you will find these kinds of companies largely only in metropolitan areas like Tokyo, Osaka, and Nagoya.

The apartments and homes these companies offer are pre-screened to allow foreign tenants, and the fee structures are often different. As foreign people are often averse to fees, you will find fewer of them, but that the rents are a bit higher. For their ability to show clients’ only apartments they can actually move into, and to basically be able to go through the rental process from start to finish in English, and other ways they tailor their services to suit the foreign client’s needs, these kinds of companies are popular options among the foreign community.

Another option in Japan are “Gaijin Ghettos,” well OK, that is perhaps not a fair name, but that is what I call them. These are basically buildings that cater to foreign clients; offering furnished or un-furnished apartments, shared housing options, short term leases, and many other services that are tailored towards the foreign community.

These kinds of apartments are popular among the English Teaching crowd, or business people who are here for only a short time. These can be a good option, but when I first came to Japan, the Nagoya local “ghetto” was populated entirely by English teachers, and was the site of nightly parties. In the last couple of years they have really quieted that place down, but the image persists in many people’s minds; not a quiet place to live.

Rental Contracts in Japan

Of course every contract is different, but these are some general items that you will usually find addressed in a Japanese rental agreement.

Purpose of the Residence

The residence is for you and any other tenants listed on the application; it cannot be sublet, or used as an office.

The lease term

The lease is 2 years.

Payment 

The rent is due in the month prior to the rental period. The last month’s rent will be prorated. Lessee holds full responsibility for bank transfer charges.

Fees

The utilities are the sole responsibility of the Lessee.

Rent Increase

The Landlord retains the right to increase the rent during the original contract period under special circumstances, e.g., a rise in property tax.

Cancellation Notice

The owner is required to provide a cancellation notice of at least six months. The Lessee is required to give one or two months notice, depending on the contract.

Cancellation Penalty

If the Lessee fails to give a cancellation notice of one — or two — months, there will be a one-month penalty. Often if there is a cancellation notice within the first 12 months of the contract there will be a one-month cancellation penalty.

Renewal

It is standard for contracts to automatically be extended unless cancellation notice has been submitted.

Cancellation of Property

The property should be returned in the same condition as it was at the time of move-in. After notice of termination, the Landlord has the right to show the property to prospective tenants.

Damage

The Landlord should be informed of damages made by the Lessee. Any damage by the Lessee, or those affiliated with the Lessee, is the responsibility of the Lessee, who must compensate for damage to property and/or people. When hanging pictures on walls, only pin-sized nails — not in abundance — should be used.

Disaster

The Landlord has no responsibility for any damage to the property, tenant, or other. It is advisable, and often required, to secure your own insurance.

Repairs

Minor repairs are the responsibility of the Lessee. Major repairs to items such as the foundation, exterior walls, roof, stairs and provided appliances are the responsibility of the Landlord.

Making Repairs

Prior notice to the Lessee will be made for repairmen to enter the property. In the event of an emergency, prior notice is not required.

Court of Law

Any issues with the contract will be settled in a court of law (the same district as the property).

Issues not in the Contract

Issues not covered in the contract will be resolved in good faith between the two parties.

Renter’s Insurance

As part of the contract, the landlord may require you to obtain insurance and may even designate the agent to use. Although the landlord will carry insurance on the property, they would like to ensure that you have something to cover your own belongings, therefore, not holding the landlord responsible in the event of a robbery, disaster, etc.

Basic renter’s insurance has fairly low limits on it, so if you have expensive furnishings we advise obtaining additional insurance for that purpose. Earthquake coverage is also a separate program that requires sign up and additional payment.
Renter’s insurance in Japan generally runs between 12,000-50,000 yen for two years of coverage.

There are a million other things that could be covered by this article, but this will get you started on the road to a new place. If you are interested in seeing available, foreign friendly properties, please take a look at www.japanhomesearch.com. They have thousands of available properties, and the best service in Japan. Good luck!