What should you think about when renting an apartment in Japan?

Renting an apartment in Tokyo was the most painful renting experience i’ve had in my life.

Now that i have your attention, i should also disclose that i’ve never rented before this, ever.

It's factually correct! And it may change one day. But not today.

I moved to Japan with my company, and was fortunately given access to a housing agency that helped me source for apartments and manage communications with landlords and intermediaries (such as insurance, guarantor companies, and so on). This was incredibly helpful because foreigners face higher barriers to rental than Japanese citizens. The agency made those barriers mostly invisible to me by pre-filtering my options to those i actually had a chance with ahead of time, saving me a huge amount of time and effort that would have gone into doing this otherwise. I also say “mostly”, because sometimes when places don’t want foreigners they have ways of seeping this into all facets of the process to tell you to give up. Some barriers are insurmountable.

Big themes you should consider if you’re renting in Japan for the first time

The process of moving concentrates a large number of major life decisions into a short span of time, and the less you have to stretch your decision making capacity, the better. I did myself no favours by thinking about these things in the way i might normally think about, say, what to eat for lunch next Saturday - i’ve decided i probably need to eat, but i don’t know what, when or where, and i don’t need to decide this now, and this is really a problem for future me to resolve, but at least i know i’ll need to eat. It’s my load-bearing mechanism - i make one small decision to defer the real decision-making when my brain hits a roadblock. It’s not really a problem with lunch, at worst i’d eat instant noodles. With moving, decisions aren’t quite so temporary.

If you’re reading this and are thinking of moving to Japan (or just moving in general), help future you by taking any of these decisions and moving them to another temporal space.

With the benefit of hindsight, these are 2 things i think are worth internalising ahead of time (i also realise these might be universal themes across all rentals but hopefully this provides local context that helps anyone moving to Japan in particular.)

First, assume you’ll take at least a month to move in after finding your apartment.

Finding an apartment doesn’t mean you’ll be able to move in quickly. I don’t know about other places, but my housing agent mentioned administrative processing in Tokyo takes roughly 3 weeks to complete. In my case, it took almost exactly that amount of time from deciding on my apartment to getting the keys. If you’re like me and relocated with your company, with corporate housing for a month, a 3 week processing time means you’ll have less than a week to find and finalise a rental. Of course, there are interim options if you can’t meet that timeline, but the combined headache of moving, finding a storage space for your things, and cost make this less-than-desirable.

This means that doing pre-work pays off drastically here. Knowing exactly what your dealbreakers are in an apartment and identifying options (including filtering out places that won’t consider you because you’re a foreigner) even before landing in Japan allows you to start viewing apartments as soon as day 2 or 3, once you’re administratively set up.

Second, factor in the upfront costs when deciding your rental budget

Finding an apartment within budget isn’t the only consideration - you’ll have to think about whether you can afford the lump sum payment at the beginning of your lease.

Some common fees are

• Safety Deposits. This is relatively standard - landlords collect an advance payment as a guarantee for your living in the apartment. When moving out, this deposit is used to cover any cleaning fees (which renters are required to pay for in Japan) and repairs to the apartment. The excess is refunded.
• Key money. This is a gratuity paid to the landlord. The practice supposedly stemmed from renters paying to get preferential consideration for their property of choice post World War 2, when housing was scarce. Consider it a donation, if you will - it’s non-refundable. Not all rentals require key money, but those that do tend to be in areas with higher demand.
• Agency fees. This only applies if you use a 3rd party housing agency to act as a middleman. That said, unless you’re a native Japanese with citizenship, you’re almost definitely going to need to employ one.
• Guarantor fees. In Japan renting requires a guarantor to vouch that you’re trustworthy - this guarantor takes financial responsibility if you fail to make your rental payments. Japanese citizens sometimes list their family members as guarantors, but it's not a given that family will do this willingly. Enter guarantor companies, who, for a fee, will assume financial responsibility of you.

To my understanding, a breakdown of upfront costs can look something like

• Deposit - 1-2 months
• Agency fee - 1 month
• Key money - 0-2 months
• Guarantor fees - 0.5 months, plus potential monthly payments or annual renewal fees

For a total 2-5.5x your monthly rent in upfront costs.

In my case, i paid close to the minimum - 2.5 months. Even then, it’s an amount of money you don’t reasonably expect someone who just moved and opened a bank account a week ago to have on hand. I barely made the timelines thanks to a combination of my first month’s salary, Singapore credit cards for daily expenses because my bank account was e m p t y, and my agent graciously agreeing to defer their fee until i could facilitate a transfer from Singapore.

If you don’t want this stress bring spare cash. A lot of spare cash. Aside from saving you the worry, a domestic bank transfer will guarantee you meet payment deadlines. I foolishly tried paying from Singapore via a 3rd party to earn credit card points. Multiple transfers failed, and the one that did go through took over a week. Building management will not give you your key without first confirming payment. Domestic transfers are next-day. Peace of mind is worth more than a few credit card points, just… bring cash, put it in your shiny new bank account, and perform a domestic transfer.

An anecdote about barriers

Earlier i said some barriers are insurmountable. This tells the story of my personal experience with renting, and how barriers influenced my decisions.

Part 1 // They’re designed to keep you out

As far as i know, most rentals in Tokyo are managed by management companies, who handle all administrative affairs and upkeep of the units. During our rental process, we viewed 15 apartments.

14 of them were in buildings owned by companies, and 1 was owned by a private homeowner, looking to rent out his personal property. That was the one we wanted, because that’s how probability works sometimes. Scarcity creates demand. It was also easily the nicest apartment we’d viewed.

Management companies mean management fees, a monthly fee every tenant pays for building maintenance. As far as i know this primarily goes to servicing common areas, and paying for garbage disposal, which, in Japan, is an all-important facet of life. Our housing agent explained that company-owned buildings (usually by real estate companies), typically have their own management company and hence have better economies of scale. Personal properties might have management companies that are smaller and less established, who then charge higher fees to meet operating costs.

This meant that our high-demand apartment also had high prices, both in terms of base rent and management fees.

Sometimes i go into a frenzy and convince myself money is an imaginary concept and i can use as much or as little of it as i want without any repercussions. Most of the time this results in an expensive purchase that i compartmentalise and reduce to a line item on my bank statement. On a bank statement, all line items take up the same amount of space.

In that frenzy i decided to put down a bid for this apartment at the expense of, you know, regular day-to-day expenses. Food, transport, those kinds of non-essential things.

After making peace with paying the management company’s exorbitant fee - 3 times higher than the other 14 apartments we viewed - we started seeing the ways we were being fenced out.

First, my agent heard i might fail the applicant screening because the management company didn’t think i could afford the unit (which, fair - i was ready to give up food to rent this place). If they’d told me they wouldn’t rent to me because i was making a financially rash decision i’d have agreed with them. Instead they told me my annual income had to be 3 times the annual rent - that this is a fixed formula for calculating eligibility. Except, i did meet the criteria.

Second, we were told we needed to engage a guarantor company. This was not unexpected, but the 2 things that came after were. The guarantor company would charge us 1% of our rent each month for their services - an unusual practice as most companies charge an upfront and annual renewal fee - and we had to find our own guarantor, who had to be a Japanese citizen. In short, they were telling us to pay a steep fee for the privilege of finding our own guarantor - the exact thing we were paying them for.

Then they functionally killed the deal by giving me 2 days to find a Japanese guarantor (challenge level: impossible) before they’d release the bid.

So in swift succession, the lines of argument went from “you don’t earn enough” to “you’re not trustworthy enough” to “you didn’t meet deadlines”. We promptly gave up on this unit and went with another option.

Part 2 // Use them as guideposts

Some paths you come across are gated. You can expend considerable effort to break one down when you encounter it, but just know that it’s likely every path from then on will be gated also. Your effort is limited, but the gates might stretch on indefinitely.

I believe that the sooner you recognise and accept you’ll sometimes be denied access to places or things because you’re a foreigner, the better your life will be. If i’d forced the issue with the first apartment, despite their ridiculous terms, there was a non-zero chance i’d have gotten it. I’d be living in a nice apartment, but i’d also be broke, miserable, and enmeshed in systems - like the guarantor company’s - that didn’t welcome me.

Sometimes the best thing you can do when you see a gate is recognise it and move on. There are many other paths out there that you’ll probably enjoy more.

Our second choice was an apartment managed by Ken Corporation, a real estate company that not only accepts foreigners, but from my experience actively caters to them. This path had a signboard saying “gate open come on in!”

Our building has a significant number of foreign tenants. I treated it as a good sign because if so many of them want to live here, Ken Corp must be doing something right with their management. What stood out to me were these quality-of-life offerings that just felt nicer than other places we’d seen.

• The hallways are air-conditioned so it’s cool in summer and warm in winter. I didn’t think this mattered to me until i was greeted by warmth in my corridor after walking home in the cold, fingers numb, face frozen.
• There’s a common rubbish disposal area where you can throw your trash at any time. Why does this matter, you ask? The usual practice is - you sort trash into burnables, plastic, paper, cardboard and bottles, then put each type in a predetermined disposal area along the street, on the predetermined day of the week for collection. God forbid you throw the wrong type on the wrong day at the wrong place. Our common disposal area allows us to throw our trash at any time into their designated bins, building management handles the rest for us. Thanks to this I don’t have to worry about the smell of rotting food sitting in our apartment for 3 days if i miss the burnables collection day.
• There’s a delivery box system. Deliveries can be placed in a locker if you’re not home to receive the item. You then insert a card tied to your unit number to unlock the locker and retrieve your item at your convenience. I don’t think any other apartment we saw had this feature.
• They gave me 1 free month of rent. I still don’t know why they did it. Because i’m a foreigner? Because they want my loyalty? Because they knew i’d write this and say “Ken Corp gave me 1 free month of rent” and thought it’d be good marketing?

A house is not a home

With the benefit of hindsight, if i had to make my housing decision all over again i’d rank my current apartment over my original first choice. The overall renting experience and amenities made it that much more pleasant (1 free month of rent (!!!) also helped). The unit came unfurnished, however, as most rentals in Japan generally do. Turning it into something liveable was very time consuming, getting to a place where i felt settled in was even more so. I may write something in future about all the considerations i wished i knew as a first-time home owner (or renter) after moving in.

For now, i’ll sit on my exactly 160cm sofa and and relish the fact that, until i decide to move (if i ever decide to move), this process is over and done with.