The following answers are based on representative examples and may not be the same for all properties. Our company’s goal is to introduce properties and units for rent or lease to customers from foreign countries that are not use to conditions that are considered the general rule in Japan. Please keep this point in mind, and above all, remember that the conditions discussed are for reference purposes only.
Tell us about your company?
Our specialty is to provide necessary support for foreigners to find the “perfect” room in Tokyo. Our English speaking staff fully assists clients during every step of the process. We have both private apartments and guesthouses within our housing network. We assist in renting private apartments in Kanagawa and Tokyo area, including great places around Yomiuri-Land Mae station – 30min away from Shinjuku and along the Denentoshi-line.
You probably get this question all the time, but why must several months’ rent be paid in advance before the tenant moves in?
The amount paid in advance will go up or down depending on the amount required to be paid as reikin (key money or “thank you money”) and as a deposit. However, in most cases, the contract will require an upfront payment equivalent to five or six months’ rent. The most common breakdown of the payments required in a rental or lease contract would be a deposit, reikin, advance payment of rent, real estate agent commission, and fire insurance. (There are some cases in which a cleaning fee and a key replacement fee will also be asked for in advance.) Each of these payments have been established on the basis of conventions that have evolved in the real estate industry and on amounts that are in accordance with residential housing laws. The content of each of the payments is described below.
• Deposit and Key Money
We will explain these terms in Question 4.
• Advance Payment of Rent
In almost all cases in Japan, a system of advance payment of rent is used when an apartment is rented. The rent for the following month generally must be paid between the 20th and the end of the current month. This system has been established to avoid the possibility of tenants leaving a residence without paying rent, even though they have lived in it for one month.
• Real Estate Agent’s Commission
This is the fee paid to the real estate agent or broker and is equal to one month’s rent. A consumption tax of 5% of the fee will also be collected.
• Fire Insurance
Owners have acquired insurance for the building in which the apartment or condominiums for rent are located. However, this insurance does not cover instances in which tenants, either intentionally or through neglect, cause fires, water leaks, or other damage that affects others in the vicinity, etc. That is why each tenant is required to purchase insurance to cover the unit he/she occupies.
• Fees for Cleaning, Key Replacement, etc.
Payment of cleaning fees is required for tenancy in almost all lease or rental units. The only difference is the timing of the payment. In some cases it is collected before moving in, and in other cases, it is deducted from the amount of deposit returned when the tenant vacates the premises. In almost all cases, the inside of the unit will have been cleaned when tenants are invited to examine it. The cost of this cleaning will have been paid by the previous tenant, and the new tenant will be required to bear the cost of cleaning the unit when he/she leaves.
Key replacement is not required for all units. It would be a cause of anxiety on the part of new tenants if the previous tenants left the unit without returning all the keys, and the same keys are to be used. If each new tenant was required to change the locks, this potential source of trouble could be prevented. Therefore, owners often make replacing keys a requirement for moving in. In any case, almost all units require that the renter bear the cost of replacing keys when necessary.
Is a guarantor always required? What is the best way to avoid making this a difficult problem?
Almost all unit owners require a joint guarantor. The biggest conceivable reason for this is that owners want to have someone from whom they can request payment of unpaid rent in the event the tenant experiences some sort of difficulty and becomes unable to pay the rent, and then leaves the premises without making payment. Unfortunately, there have been many cases in which owners have been left holding the bill after accepting a tenant’s promise that they would make all rent payments on time.
It should be mentioned that, recently, the number of “rent guarantee companies” has increased. A system has been developed in which, for a fee, these companies will serve as a guarantor. In an increasing number of cases, a joint guarantor will not be needed if this system is utilized.
Will paying money in advance assure a prospective tenant that he/she will be able to rent a “great” apartment?
It is not the case that paying money in advance will guarantee that a good apartment or other unit will be found. However, it is probably safe to assume that the more money required when signing the contract, the better the unit will be. This probably overlaps with Question 5, but it is often the case that the amount of reikin will be a reflection of the quality of the unit. Owners understand that if their unit was built many years ago and is located far from a train station, they probably will not be able to find any renters if they ask for two months’ reikin.
Please give us an accurate description of what the terms “reikin” (key money) and “deposit” mean. Are these payments returned to the renter or lessee?
• Deposit
Owners ask for a deposit in order to cover such costs as restoring a unit to its original condition after a tenant leaves. If there is no conspicuous damage or ripped wallpaper, etc., and if the rooms look reasonably clean at the time the tenant vacates the premises, then, we cannot say all, but the majority of the deposit is often returned. It should be noted that tenants can be billed for repair costs required to restore a unit to its original condition that exceed the amount of the deposit. In addition, we cannot cover all cases pertaining to deposits here because there are cases in which special contract provisions stipulate instances in which the deposit will not be returned.
• Reikin (key money)
As the Japanese words “rei” and “kin” indicate, payment of “reikin” can be thought of as “thank-you money” paid to the owner. Unlike the deposit, the reikin payment will not be returned to the tenant. We realize that this expense is difficult for many foreign customers to understand, and all we can say is that this is an established custom in rental agreements in Japan.
- Name: Matthias Jaap
- Position: Web/application developer
- Nationality: German
My Sakura House apartment is quite conveniently located near to a beautiful park suitable for work-outs and walking. The room may be small but it’s easy to keep clean, is equipped with all necessary things and there is a bathtub too. It takes about five minutes to the train station and 25 minutes to Nakano broadway which is probably a geek’s paradise filled with manga and anime. This is my third apartment in Japan and in my opinion it combines a convenient location with a quiet neighbourhood and a reasonable rent. Plus I am able to reach Shibuya and Shinjuku in quite a short time or stay at home and study Japanese language.
Compared to the other choices available, what are the advantages of using the services of a private real estate agent?
The answer to this question depends on what other choices are available. However, the main advantage of using the services of a private realty firm is that there is a high possibility that a real estate agent will be able to find the type of unit that is in keeping with the customer’s wishes and with rental terms that are in line with his/her expectations.
For example, a monthly condominium (“monthly mansion”) may be the best option when a customer’s number-one priority in regards to a rental unit is that initial expenses (contract payment) be kept as low as possible. However, if at the same time, the customer has additional desires such as the apartment being “close to a certain station,” “fully equipped with appliances,” “near a certain train line or station,” or that “pets be allowed,” then it can be difficult to find a strictly month-by-month rental unit — given the number currently available.
The information on properties and rental units that private real estate agents have on hand is so vast that it cannot be compared with what alternative sources can offer.
When is the best time to begin looking for an apartment?
The best time to begin the search is about three weeks to one month before moving into a new residence. A rather large number of customers want to begin looking earlier than that.
However, imagine a case in which the customer begins looking one-and-a-half months before he/she wants to move, and he/she finds the ideal unit on the first day of the search. If the customer applies for the unit on that day, it is highly unlikely that he/she will be able to convince an owner to wait for one-and-a-half months before moving in. It is natural for customers to want to set the day they move into a new unit according to a schedule in which they can avoid overlapping rent payments with their old unit. However, not all units can be made available in a way that meets this expectation, but there have been cases in which owners agreed to a tenant moving in a month later.
Therefore, we cannot generalize, but you will find that owners will ask for the tenant to move in a bit earlier. One might then think, why not start looking one week before a move? It must be kept in mind that it is very difficult to complete the procedures needed and prepare a contract within one week. We cannot assure that this can be done. In view of these considerations, we say that the best time to begin searching is three weeks to one month in advance.
Finally, do you have any advice on how to look for inexpensive furniture?
There are some differences, depending on whether you are talking about new or old furniture. One source of inexpensive furniture is a home center (such as Nitori or Ikea) that offers their display products which may be slightly scratched, etc. but are almost like new.
Also, companies that offer sets of furniture for rent have recently appeared. We advise customers planning to stay a long time to purchase furniture, but rental furniture is a good option for those intending to stay for only a short period.
Please give us five questions realtors are often asked by customers before they move into an apartment.
The going rates of rents in a certain vicinity
Example: “What is the going rent rate for a 2LDK condominium near station “A” or near train line “B”?
Commercial facilities and public facilities in the vicinity
Example: “Is the unit close to a supermarket or post office?”
Procedure from the preliminary viewing of the unit through the conclusion of a contract
Examples: “We would like to take this apartment, when can we move in?” Or, “What is the deadline for the payments required in the contract?”
Negotiating rent and other contract payments
Example: “We would like to take this apartment, but would the owner agree to lower the rent a bit?”
Questions about the return of the deposit when the tenant moves out
Example: “How much of the deposit will we get back when we move out?”
Why is it that many owners will not accept foreign tenants?
The greatest concern owners have is being unable to communicate with the tenant when emergencies or unexpected situations arise. Things such as falling behind in rental payments, leaving the unit without informing the owner, or making excessive noise are not unique to foreign tenants, as there are some Japanese people that do these things as well.
Ultimately, the owners’ greatest fear is being unable to contact or communicate with the tenant. Our company is able to introduce a large number of rental units to foreign customers because we provide free support services before and after the tenant moves in. We have earned the owners’ trust by attending to all of their concerns.
Are there any unique characteristics that Matsuzato Co., Ltd. has that other real estate agencies do not have?
What makes us unique is that we offer services in English and we are able to show customers a large number of units that meet their needs and expectations. More than anything else, our company prides itself on its passion and sincere desire to respond to its customers’ needs. We consider it an honor that our customers almost invariably introduce their friends to us as well. Our company intends to continue to do everything it can to ensure that all of our foreign customers’ experience in searching for an apartment for lease or rent is as smooth and enjoyable as if they were Japanese themselves.
