What included in initial fee to rent an apartment in Japan? Am I the only one who gets really confused by specific keywords related to Japanese real estate? Even when you’ve found the perfect property, these terms can make it quite challenging to grasp the actual costs. Before you visit the real estate agency, ensure you understand the terms listed below and the initial expenses involved.
If you are interested in monthly cost, please refer to below.
Table of Contents
Quick Video Guide
Quick overview of important keywords to understand initial cost
When calculating initial fee to rent an apartment in Japan, following 6 words are the ones you typically encounter when visiting a property agency.
| Keywords | Definition | Kanji | Refundable | Estimated Cost/1 bed room |
|---|---|---|---|---|
|
SHIKI-KIN |
Security Deposit |
敷金 |
YES* |
1-2 month's rent |
|
REI-KIN |
Gratuity Fee |
礼金 |
No |
1-2 month's rent |
|
MAE-YACHIN |
1st Month Rent in advance |
前家賃 |
No |
1 month rent |
|
CHUKAI-TESURYO |
Agency's Fee |
仲介手数料 |
No |
0.5-1 month rent |
|
HOSYOKAISHA-TESURYO |
Guarantor Fee |
保証会社手数料 |
No |
0.5-1 month rent |
|
KASAI-HOKENRYO |
Fire Insurance |
火災保険料 |
Yes** |
15,000-20,000 yen |
*Depends on the cleanness of vacated room, Shiki-kin might not be refunded.
**Depends on the remaining duration of contract.
The keywords and its definition
Keyword #1 – SHIKI-KIN(敷金)
The security deposit is intended to cover unforeseen situations like unpaid rent or property damages. When you move out, the cost of cleaning and restoring the property to its original condition is deducted from the deposit, and any remaining funds are refunded to you. Typically, the security deposit, known as ‘Shiki-kin,’ equals one to two months’ rent.
Keyword #2 – REI-KIN(礼金)
This is a gratuity fee. In Japanese tradition, tenants pay this fee as a gesture of thanks to the landlord. Similar to ‘Shiki-kin,’ this gratuity fee typically amounts to one to two months’ rent.
Keyword #3 – MAE-YACHIN(前家賃)
In Japan, it is common to pay the 1st month rent in advance. At the time of signing the contract, you will pay the rent for the month following the month in which the lease contract begins.
Keyword #4 – Chukai-Tesuryo(仲介手数料)
Commission paid to real estate company, for helping find your property. In average, it equals half of monthly rent.
Keyword #5 – Hoshyogaisha-Tesuryo(保証会社手数料)
When you rent a property, you will be asked to have a guarantor. For some properties, landlord will ask you to use guarantor company, rather than asking your friend to be a guarantor. In this case, you are required to pay the company initial guarantor fee. For some properties, the tenant is requested for both a friend and a company as a guarantor.
Keyword #6 – Kasai-Hokenryo(火災保険料)
This is fire insurance, and is mandatory to enroll at the time of the contract. Typically, You’ll pay the insurance for two years all at once. Fire insurance usually covers two key aspects: the ‘building’ (comprising the main structure and its associated components) and ‘household possessions’ (including electronics, furniture, clothing, and other items found within the building). In typical cases, landlords already have insurance for the building, it is requested for tenants to have insurance which covers the household possessions. If you pay the insurance at once, it’s possible to get a refund upon moving out. The amount refunded upon termination may vary based on the remaining duration, please ensure the term and condition before paying the insurance.
What is included in initial fee?
When you add up all six costs, you’ll typically need to pay around 4-5 months’ worth of rent when signing the contract. Recently, some properties do not require the payment of Shiki-kin and Rei-kin to reduce initial expenses. In such cases, you might be asked for a cleaning fee and a higher monthly rent. It’s crucial to calculate both the initial and monthly costs, as well as the expenses when moving out.
To sum up, when searching for a property in Japan, it’s essential to consider six costs, all of which are included in the initial expenses, including what’s included in the initial fee to rent. Typically, these initial expenses amount to at least 4 months’ rent, so you should budget for at least 5 months’ rent to rent an apartment in Japan. Before visiting a real estate agency, please ensure that you are familiar with the keywords mentioned above to be prepared for negotiations!
