Renting Guide in Japan: Key Points for Foreigners

When you’re renting an apartment in Japan, you’ve got to be aware of the unique rules that can be very different legally and culturally differences for newcomers. That’s why for residents renting for the first-time, navigating lease agreements, initial costs, and guarantor requirements can be challenging. Today, we’ll explore the Japanese apartment and house rental system, outline the key steps to secure a property, and highlight important issues so that you can avoid common pitfalls.

Understanding the Japanese Rental System

Like many other countries, landlords in Japan’s rental market hold significant decision-making power, and so because they cannot personally assess every applicant, using real estate agencies, are the easiest and most common way to find your apartment. This can sometimes pose challenges for foreign applicants, but using agencies that specialize in foreigner-friendly properties can simplify the process. Another thing that may seem unusual to people from Western countries is that, rather than renewing annually, most lease contracts in Japan are signed for a two-year term, after which you’ll typically need to pay a renewal fee.

Before you dive in, here are the main points to you should keep in mind:

The Price of Housing – A Major Consideration

Like any other country, monthly rent prices in Japan vary significantly by region. Depending on where you live in (or around) your city, prices will vary, but there are general ranges you can prepare for. For a one-bedroom apartment, current average prices in major cities are:

Now that you know more or less what you can expect to pay, let’s go through the different steps to winning and keeping an apartment in Japan.

Leasing Through Real Estate Agencies

Most properties are not advertised directly by landlords. Real estate agents will show you available listings and assist in negotiations. Note that agents primarily speak Japanese, so consider finding a bilingual or foreigner-friendly agency. Additionally, many real estate agents will offer to drive you to several locations per day, so it’s a good idea to keep your day free, as you might spend several hours checking various locations.

Guarantor Requirements

Many landlords require a guarantor (also known as a co-signer) to secure a lease. If you cannot provide a personal guarantor in Japan, you’ll likely need to use a guarantor company. These companies act as co-signers for a fee, usually 50–100% of one month’s rent, and often require annual renewal fees.

Initial Costs and Monthly Rent

Renting in Japan can initially be expensive due to several upfront fees. Knowing each cost helps you budget accurately and prevents surprises when you sign the contract.

1. Security Deposit (敷金, Shikikin)

A deposit is usually set at one to two months’ rent, held by the landlord to cover potential damages or unpaid rent. If the property is returned in good condition, a portion of this deposit may be refunded, but deductions for cleaning or repairs are common.

2. Key Money (礼金, Reikin)

A non-refundable payment to the landlord, traditionally seen as a “gift” or “thank you.” It often amounts to one or two months’ rent. This practice is less common outside major cities but is still prevalent in places like Tokyo and Osaka.

3. Real Estate Agent Fee

Often equivalent to one month’s rent plus tax. Since most properties are rented through agencies, this fee covers the agent’s services in property searches, negotiations, and contract procedures.

4. Advance Rent

At lease signing, you’ll typically pay the first month’s rent upfront. Some landlords may request additional months in advance if they’re concerned about your rental history or financial stability.

5. Guarantor Company Fee

If you don’t have a personal guarantor, there are guarantor companies that will co-sign on your behalf. The fee is typically 50–100% of one month’s rent and this may be charged annually upon contract renewal.

6. Common Service Fees (共益費, Kyoekihi)

Many apartments charge a separate monthly fee for building maintenance, trash collection, and shared facilities. This is usually a few thousand yen to over ten thousand yen, depending on the property.

7. Renewal Fee (更新料, Koushinryo)

One of the most overlooked yet crucial aspects of renting in Japan is the renewal fee, which is often required when extending your lease after the initial two-year period. This fee is typically equivalent to one month’s rent, although it varies by landlord and region. Essentially, it is paying the reikin again to maintain your apartment.

Why Is the Renewal Fee Important?

• Extra Costs: For long-term renters, this recurring expense adds up over the years. It should be noted that this is mitigated by the fact that raising monthly rent is uncommon in many areas of Japan, including Tokyo.
• Regional Variations: The renewal fee is standard in Tokyo and surrounding Kanto prefectures but may be less common in other parts of Japan, such as Kansai.
• Contractual Obligation: Even if you plan to stay long-term, you must formally renew your contract and pay the fee every two years, so it’s a good idea to make the time to speak to your agency every couple of years to sign the necessary documents.
• Non-Negotiable in Many Cases: While some landlords waive or reduce this fee, most enforce it strictly.

How to Manage the Renewal Fee Effectively

• Check the Contract Terms Carefully: Before signing, confirm whether your lease includes a renewal fee and how much it will be.
• Budget in Advance: Since the fee is typically equal to one month’s rent, setting aside funds in advance will prevent financial strain.
• Consider Properties Without a Renewal Fee: Some newer or foreigner-friendly listings do not require a koushinryo, so ask your real estate agent about these options.
• Negotiate if Possible: In some cases, landlords may be open to reducing or waiving the renewal fee, especially if the property has high turnover rates.

Understanding the renewal fee can prevent unexpected costs and help you make informed decisions about your long-term stay in Japan.

Common Challenges for Foreigners

For many first-timers, renting in Japan involves language barriers and cultural norms that can be unfamiliar. Many landlords and real estate agents communicate only in Japanese, and you may encounter hesitation toward foreign tenants. However, foreigner-friendly agencies, multilingual support services, and share-house options are more common today than in the past.

It’s also crucial to understand local rules on waste disposal and noise control. Japan has strict policies on separating trash into burnable, non-burnable, plastics, and recyclables. Noise complaints can also escalate quickly in densely populated areas, so be mindful of these cultural expectations.

Recommended Areas for Foreign Residents

Higher Rent, High-Level Foreigner-Friendliness

• Minato (Tokyo): Home to many embassies and international supermarkets, with luxury apartments widely available.
• Shibuya / Shinjuku (Tokyo): Known for their vibrancy, entertainment, and international services.
• Kita (Osaka): A bustling commercial hub with convenient transit and shopping.

Mid-Range Rent, Moderate Foreigner-Friendliness

• Namba (Osaka): Renowned for its entertainment, dining, and vibrant nightlife, alongside a growing international community.
• Nagoya: Known for its automotive industry presence, it has more affordable rents compared to Tokyo or Osaka while maintaining urban conveniences.

Lower Rent, Developing Expat Communities

• Fukuoka: Offers a balance of urban convenience and relatively lower living costs, plus a growing expat community.
• Sapporo: Known for its relaxed lifestyle and affordable rents making it attractive to long-term foreign residents.

Final Thoughts on Renting an Apartment in Japan

Although renting in Japan involves what are for many uncommon procedures, fees, and cultural norms, thorough preparation can help you navigate the system smoothly. By budgeting for initial costs, considering the renewal fee, and using foreigner-friendly real estate services, you can find a comfortable place to call home in Japan.