Renting a property in Japan can be an exciting experience for foreigners, but it can also be confusing when it comes to the payment of fees such as key money and security deposits. In this blog post, we will explain what these fees are and what to expect when renting a property in Japan.
What is Key Money?
Key money, also known as “Reikin” in Japanese, is a non-refundable payment made by the tenant to the landlord at the start of a rental contract. The amount of key money varies depending on the location, property size, and the landlord’s preference. Typically, key money can range from one to three months’ worth of rent, and it is not regulated by law.
The purpose of key money is to show gratitude to the landlord for providing the opportunity to rent the property. In the past, it was also considered a way to secure the rental property, but nowadays, most landlords do not require key money as a condition for renting.
What is a Security Deposit?
A security deposit, also known as “Shikikin” in Japanese, is a refundable payment made by the tenant to the landlord to ensure that any damages or unpaid rent are covered at the end of the lease term. The amount of the security deposit is usually one to three months’ worth of rent, and it is regulated by law in Japan.
The security deposit is held by the landlord or a third party, such as a real estate agency, throughout the rental period. At the end of the lease, the deposit is returned to the tenant, provided there are no damages or unpaid rent. However, it is important to note that the landlord may deduct any unpaid rent or damages from the security deposit.
How to Negotiate Key Money and Security Deposits?
While key money is not regulated by law, security deposits are, and the landlord cannot request more than three months’ worth of rent. However, it is common for landlords to request key money, which can make the initial cost of renting a property in Japan quite expensive.
As a foreigner, it may be challenging to negotiate the rental fees, but it is worth trying. One way to negotiate is to offer to pay a higher monthly rent instead of key money. Alternatively, you can ask for a lower key money amount, or request the landlord to waive the key money payment altogether.
It is important to note that some landlords may not be willing to negotiate the rental fees, especially in popular areas such as Tokyo. Therefore, it is essential to research the market and understand the rental fees before entering negotiations.
Are There Alternatives to Key Money and Security Deposits?
Yes, there are alternative rental options available in Japan that do not require key money or security deposits. For example, there are furnished apartments or monthly rental apartments that offer short-term rentals without the need for upfront fees.
Another option is to use a guarantor service, which can act as a third party to guarantee that the tenant will pay the rent and cover any damages. However, these services require a fee, usually one month’s worth of rent, and may also require a Japanese resident to act as a guarantor.
Renting a property in Japan can be a great experience, but it is important to understand the fees associated with renting, such as key money and security deposits. While these fees can be costly, there are ways to negotiate with landlords and alternatives to consider. It is essential to do research, understand the rental market, and negotiate in a polite and respectful manner.