Thinking of renting a home in Japan and assuming all you need is the monthly rent?
In reality, securing a property requires a significant initial payment at the time of contract, along with ongoing monthly costs beyond just rent. Without a clear understanding of these expenses, you may find yourself unable to proceed with the move or facing unexpected financial strain after relocating.
This article provides a detailed breakdown of the initial and monthly costs involved in leasing a property in Japan, and offers guidance on how to structure your budget effectively—ensuring a smooth and confident start to your new life.
Introduction: Upfront Costs in Japan Tend to Be Higher Than Expected
For foreign residents or those unfamiliar with the Japanese rental system, one of the first surprises is often the high initial cost. It is standard practice to pay several months’ worth of rent upfront, and the total initial payment can amount to four to six months of rent in many cases.
【1】Breakdown of Initial Costs
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Security Deposit (Shikikin)
Typically equivalent to one month’s rent, this serves as a safeguard for potential restoration or repair costs upon move-out. Unused portions are refundable, though deductions may apply for cleaning or damages. -
Key Money (Reikin)
A traditional, non-refundable gratuity paid to the landlord—commonly equivalent to one month’s rent.
※ An increasing number of properties now offer “no key money” options. -
Agent Fee
A commission paid to the real estate agency, generally one month’s rent plus consumption tax. -
Guarantor Company Fee
If no personal guarantor is available, using a guarantor company is standard. Expect to pay 50%–100% of one month’s rent upfront, plus an annual renewal fee of around ¥10,000. -
Fire Insurance Premium
Usually required for a two-year policy, with typical costs ranging from ¥15,000 to ¥25,000. Some properties may require enrollment with a specific insurer. -
Key Exchange Fee
For security purposes, landlords often require new tenants to cover lock replacement. Estimated cost: ¥15,000 to ¥30,000. -
First Month’s Rent (Prepaid Rent)
It is customary to prepay the rent for the first month at the time of contract signing. -
Other Fees
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Optional membership for support services (typically a few thousand yen)
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Pest control, deodorization, or sanitation services (optional to mandatory depending on the property)
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Document handling fees and applicable consumption tax
▶ Example of Initial Costs (Based on Monthly Rent of ¥80,000)
| Cost Item | Estimated Amount |
|---|---|
| Security Deposit | ¥80,000 |
| Key Money | ¥80,000 |
| Agent Fee | ¥88,000 (including tax) |
| Guarantor Company Fee | ¥40,000–¥80,000 |
| Fire Insurance | ¥20,000 |
| Key Exchange Fee | ¥20,000 |
| First Month’s Rent | ¥80,000 |
| Total Estimated Cost | Approximately ¥410,000–¥450,000 |
【2】Breakdown of Monthly Living Costs
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Rent
This is your primary fixed monthly expense. As a general guideline, your rent should ideally be no more than one-third of your net monthly income. -
Common Area Maintenance Fee
Covers upkeep of shared building spaces such as hallways, garbage areas, and elevators.
Typically ranges from ¥3,000 to ¥10,000 per month, billed separately from rent. -
Utilities (Water, Electricity, Gas)
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Electricity: ¥5,000–¥10,000/month
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Gas: ¥4,000–¥8,000/month (varies by city vs. propane gas)
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Water: ¥3,000–¥5,000 every two months (regional differences may apply)
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Internet Usage Fee
Some properties offer complimentary internet. If not, expect a separate contract costing approximately ¥3,000–¥6,000/month. -
Fire Insurance Renewal
Charged annually or biannually, depending on the policy. -
Guarantor Company Renewal Fee
Usually ¥10,000 per year.
【3】Smart Ways to Reduce Initial Costs
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Seek properties with no security deposit or key money
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Choose agencies offering half-price or zero agent fees
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Opt for furnished units to avoid upfront furniture and appliance expenses
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Consider listings with “free rent” offers, where the first month’s rent is waived
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Decline non-essential add-ons such as deodorization or pest control services
💡 Note: Some properties that offer low or zero initial costs may compensate with higher monthly rent. It’s essential to evaluate total cost over time—not just upfront expenses—when comparing options.
【4】Essential Questions to Ask Before Signing the Lease
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Are building maintenance and common area fees included in the rent?
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Is internet service complimentary, or is there a separate charge?
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Am I responsible for setting up contracts for utilities such as water, electricity, and gas?
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What is the annual renewal fee for the guarantor company?
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What is the duration and renewal cost of the fire insurance policy?
Budgeting Should Account for Initial, Monthly, and Unexpected Costs
While Japan’s rental system tends to require higher upfront costs, it is designed to support a relatively stable lifestyle once the lease is secured. That said, beyond initial contract fees, you should also consider expenses such as furniture, appliances, and moving costs when planning your relocation.
Therefore, when searching for a home, it’s important not to focus solely on monthly rent.
Instead, ask yourself:
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How much will I need to pay upfront?
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What are my ongoing monthly obligations?
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Can I absorb unexpected expenses?
A well-structured budget from the outset will allow you to move forward with confidence and enjoy a smooth, well-prepared transition into your new living environment.