Breakdown and average cost of living alone as a new graduate

When you start living alone as a new graduate, you will have to pay various initial costs in addition to rent. Generally, the total initial costs are expected to be about 4 to 6 months' rent. Here we will explain the average costs for each item in detail.

Deposit and key money

A security deposit is money that you give to your landlord to cover the cost of restoring the property to its original state when you move out, and is usually 1 to 2 months' rent. Any amount remaining after deducting repair costs will be refunded.

On the other hand, key money is paid as a thank you to the landlord, and is usually between 0 and 2 months' rent. Since key money is not refundable, it is common to choose a property without key money if you want to reduce the financial burden. Recently, there has been an increase in "zero-zero properties" with no deposit or key money, but although the initial costs are kept down, the rent may be expensive in some cases.

Brokerage fee

When signing a contract for a rental property, the fee paid to the real estate company is the "agency fee." Generally, it is between 0.5 and 1 month's rent, but this varies depending on the real estate company. By law, the maximum amount that can be charged is 1 month's rent. Some real estate companies may be running campaigns where the fee is waived.

Also, since commissions can vary depending on the intermediary company even for the same property, it is a good idea to compare multiple real estate companies.

Advance rent

Advance rent is the rent for the first month of occupancy and the following month, paid at the time of signing the contract. Usually, you will need to pay rent calculated on a pro-rata basis based on the period from the contract date to moving in, as well as the rent for the following month.

Therefore, you will need to prepare one to two months' rent when you move in. The method of paying advance rent varies from property to property, and there are also "free rent" properties where the first month's rent is free. When signing a contract, it is important to check how the advance rent is set.

Guarantor company guarantee fee

When signing a rental contract, many properties require you to join a guarantor company. The guarantor company advances the payment to the landlord if the tenant falls behind on rent, and typically requires the tenant to pay 0.5 to 1 month's rent as a guarantee fee.

In addition, there are cases where a renewal fee of about 10,000 yen is charged every year when renewing the contract. Whether or not you need to use a guarantor company depends on the property, but in some cases you cannot sign a contract with just a guarantor, so be sure to check in advance.

Fire insurance premiums

In rental properties, it is mandatory to take out fire insurance to prepare for problems such as fires and water leaks. The average fire insurance premium is 15,000 to 20,000 yen (for two years).

The compensation generally covers damage to buildings and belongings, compensation for damages caused by tenant negligence, etc. In many cases, you will sign up for insurance designated by the real estate company, but if you can choose for yourself, it is a good idea to compare the compensation contents and choose an appropriate plan.

Key exchange fee

The key replacement fee is the cost to replace the key used by the previous tenant with a new one. It is an important crime prevention cost, and the average cost is 10,000 to 30,000 yen. The cost varies depending on the type of key, with a typical cylinder key costing around 10,000 yen, but a high-security dimple key can cost over 20,000 yen. Depending on the property, the landlord may be responsible for this fee, so it is a good idea to check when signing the contract.

Moving expenses

The cost of moving to a new home varies depending on the amount of luggage, the distance, and the time of year. The average cost is around 30,000 to 60,000 yen during normal times, and 50,000 to 100,000 yen during peak times (March to April). If you are moving long distances or purchasing new furniture and appliances, the cost may be higher.

Also, rates vary depending on the moving season and day of the week, so it's important to get quotes early and choose the best plan.

Purchase costs of furniture and appliances

When you start living alone, you will need to spend money to get the bare minimum furniture and appliances. As a general guide, it is said that this will cost between 50,000 and 200,000 yen.

Essential items include a refrigerator, washing machine, microwave, curtains, bed, table, etc. If you want to keep costs down, you can choose a property that already has furniture and appliances, or use a second-hand shop or flea market app.

Average rent for new graduates living alone and differences by area

When you start living alone as a new graduate, the biggest expense will be rent. Rent varies greatly depending on the region, with a large difference in market prices between urban and rural areas. Also, knowing the appropriate guideline for rent relative to your income will help you live a comfortable life. Here, we will explain in detail the difference in market rent prices between urban and rural areas, and the appropriate ratio of rent.

Comparison of urban and rural areas

There is a large difference in average rent between urban and rural areas, with central Tokyo in particular being considerably higher than the national average.

Average rent in major cities (for studio/1K apartments)

In urban areas, properties near stations and in popular areas tend to be expensive.

In urban areas, properties near stations or in popular areas tend to be expensive, but in rural areas, you can choose larger rooms and properties with better facilities for the same price. For example, if you search for 60,000 to 70,000 yen within the 23 wards of Tokyo, you will likely find an old one-room apartment or a property far from the station, but in regional cities, you can choose a larger room such as a 1DK or 1LDK for the same price.

The availability of public transport also affects rent. In urban areas, there are many trains and buses, so properties close to stations are popular, but in rural areas, travel by car is the norm, so you can often live a little further from the station and still get a cheaper rent.

Rent estimate

For new graduates living alone, rent takes up a large portion of their total living expenses, so it is important to know an appropriate guideline for rent.

The appropriate ratio of rent to take-home pay

Generally speaking, it is considered ideal to spend less than one-third of your take-home pay. Let's take a look at some specific guidelines.

For example, the average take-home pay for a new graduate is said to be around 180,000 to 220,000 yen. In this case, the appropriate upper limit for rent would be around 60,000 to 73,000 yen. However, depending on the area you live in and your lifestyle, it may not be a problem to exceed this percentage.

What happens if the rent is too high?

If rent exceeds one-third of your take-home pay, your living expenses will increase and you may have less money left over for savings or entertainment. In particular, you should also take into account the following costs:

• Utility bills and water bills (5,000 to 10,000 yen/month)
• Communication costs (smartphone/Wi-Fi) (5,000-8,000 yen/month)
• Food expenses (20,000 to 30,000 yen/month)
• Transportation expenses (5,000 to 15,000 yen/month)
• Miscellaneous expenses and entertainment expenses (10,000 to 30,000 yen/month)

If your rent is too high, you may not be able to allocate enough money to these expenses, which can make your monthly living difficult. Therefore, it is important to set your rent at about one-third of your take-home pay, while also considering the balance with other living expenses.

Tips for reducing the initial costs of living alone as a new graduate

It is said that the average initial cost for new graduates moving out on their own is 4 to 6 months' rent. However, with some ingenuity, it is possible to significantly reduce costs. Here, we will explain in detail how to choose a property with no deposit or key money, how to save on agency fees, how to reduce the cost of furniture and appliances, and how to reduce moving costs.

Choose a property with no deposit or key money

<Advantages and disadvantages of zero-zero properties>

A zero-zero property is a rental property that does not require a deposit or key money. By choosing this property, you can significantly reduce your initial costs.

merit

• Initial costs can be reduced by several tens to hundreds of thousands of yen (if rent is 60,000 yen, you can save about 120,000 yen)
• Reduces the payment burden at the time of signing the contract
• It is hard to make a loss even if you stay for a short period of time

Disadvantages

• Rents are often set higher than market price
• Cleaning and repair fees may be expensive when you move out.
• It is mandatory to join a guarantor company, and in many cases a guarantee fee is charged.

<Points to note when signing a contract>

• Check the costs involved when you move out in advance (check the "restoration costs" section of the contract).
• Check whether the rent is higher than the market price (compare with the market price in the neighborhood)
• Understand the difference with free rent (zero-zero properties have zero "initial costs", while free rent is free for a certain period of time)

How to reduce brokerage fees

<Market brokerage fees>

The brokerage fee is usually 0.5 to 1 month's rent. However, the legal limit is 1 month's rent, and charging more than that is illegal.

<Negotiation tips>

• Explain that you found the item at half the price elsewhere (as this is a highly competitive industry, you can often negotiate).
• Ask, "Are there any properties where the landlord will cover the brokerage fee?" (In some cases, the landlord will cover the brokerage fee.)
• Tell them that you are considering multiple properties (it will be easier to negotiate a lower price by comparing with competing properties)

<How to find a real estate agency that offers no brokerage fees>

• Search for "0 yen brokerage fee XX (desirable area to live in)"
• Search for properties with a "direct contract with the landlord" (if you do not go through a real estate agency, no brokerage fees are required)
• Check for commission discount campaigns on portal sites such as "SUUMO" and "HOME'S"

Tips for saving money on furniture and appliances

<Minimum necessary list>

When starting a new life, buying everything new can cost over 100,000 yen. First, make a list of the bare necessities.

＜Minimum necessities＞

• Refrigerator (essential for storing food)
• Washing machine (a long-term savings when you consider the cost of using a laundromat)
• Microwave (convenient for home cooking)
• Curtains (for privacy and protection from the cold)
• Lighting (some properties may not have lighting)

＜Things you don't need to rush＞

• Sofa (left for later as it takes up space)
• Television (can be substituted with smartphone or PC)
• Rice cooker (microwave cooking is also OK)

<Utilizing recycle shops and flea market apps>

• Mercari/Jimoty: You can get things at a low price because you can trade directly with local people
• Recycle shops (Treasure Factory, Hard Off, etc.): Items can be purchased for less than half the price of new items
• Hand-me-downs from friends and family: Check with your family and acquaintances to see if they have any unwanted appliances.

Tips to reduce moving costs

<Avoid peak seasons>

During the peak moving season (March to April), moving fees rise to 1.5 to 2 times the normal rate, so if possible, choose to move from May onwards or on a weekday to keep costs down. Also, morning moves are popular, so it is often cheaper to choose an afternoon move.

<Using the Singles Pack>

If you have only a few belongings, you can significantly reduce costs by using the "single person pack" offered by a major moving company. It is about 15,000 to 40,000 yen cheaper than a regular moving plan, and offers comprehensive nationwide services. Compare the price plans of each company and choose the one that is best for you.

<Consider moving on your own>

If you are moving a short distance and have few belongings, you can rent a car and transport it yourself. Even including the cost of the rental car and gas, it is often cheaper than using a moving company. However, if you have large furniture or appliances, you may want to consider the risk of damage and the burden of moving them in, and hire a professional moving company.

How to save money on new graduates living alone other than the initial costs

When you start living alone as a new graduate, monthly living expenses become a big burden. However, with some ingenuity, it is possible to reduce fixed and daily expenses and increase savings without straining yourself. Here, we will explain in detail how to save on living expenses in general, how to reduce fixed expenses, how to save on food costs, and tips on using points.

How to save on living expenses

When living alone, in addition to rent, you will also have to pay for food, utilities, communication, transportation, entertainment, etc. Reducing these expenses will help lighten your monthly burden.

Saving on energy costs

• Electricity bill: Switch to LED light bulbs and minimize air conditioning use.
• Gas bill: Choose a property with city gas and shorten your shower time.
• Water bill: The bath is mainly shower-based, with washing done in bulk.

Save on communication costs

• Switch to a low-cost SIM (more than 3,000 yen cheaper per month than the major carriers).
• Compare pocket Wi-Fi and fiber optic lines to choose the cheapest plan.

Save on transportation costs

• Use a commuter pass and travel within the limits of company-provided travel.
• Use shared bicycles or electric scooters (to save money on short trips).

Savings on entertainment costs

• Review your subscriptions (cancel unused video and music services).
• Take advantage of free events and promotions.

How to reduce monthly fixed costs

Fixed costs occur every month, so reviewing them first can help you save a lot.

1. Switch to a low-cost SIM card for your smartphone bill

• Simply switching from a major carrier to a low-cost SIM (UQ Mobile, Rakuten Mobile, IIJmio, etc.) can save you more than 5,000 yen per month.

2. Compare electricity and gas companies and choose the cheapest plan

• By using the liberalized plans of new power companies and gas companies, you can save 10,000 to 20,000 yen per year.
• You may be able to save even more by taking advantage of a set discount (electricity + gas).

3. Consider local taxes and health insurance costs

• Resident tax starts to be levied from the second year, so save money in the first year.
• By taking advantage of hometown tax donations, you can reduce your tax burden.

4. Ways to lower rent

• Considering a shared house or room share can significantly reduce your monthly rent.
• Take advantage of your company's housing allowance system and choose a property that offers rent subsidies.

Tips to save money on food

Food costs are one of the most variable expenses when living alone. The key is to cut down on eating out and keep food costs down efficiently.

1. Set a weekly budget

• Setting specific goals such as "less than 30,000 yen per month" or "less than 1,000 yen per day" can help prevent wasteful spending.

2. Cook your own meals

• By buying ingredients in bulk and preparing them in advance, you can reduce the number of times you eat out and keep meals under 300 yen per meal.
• Take advantage of wholesale supermarkets and discount stores to choose cheap ingredients.

3. Use coupons and set meals when eating out

• Use discount coupons and lunch sets from chain restaurants to choose menus that offer good value for money.
• Eat in rather than take out (as some restaurants charge higher take-out fees).

4. Avoid drinks and sweets

• Buying drinks from convenience stores or vending machines is expensive.
• Carrying a water bottle and buying 2L bottles of water or tea at the supermarket can help you save a lot of money.

Reduce living costs by using points

By using points for everyday payments, you can save money and get great deals while shopping.

1. Utilize cashless payment methods

• Receive points back when making credit card or QR payments (Rakuten Pay, PayPay, dPay).
• By consolidating your monthly payments into a cashless payment plan, you can save tens of thousands of yen a year.

2. Choose a credit card that makes it easy to accumulate points

• Rakuten Card: Earn up to 5x points when shopping on Rakuten Market.
• d Card: It's easy to earn d points at convenience stores and restaurants.
• Sumitomo Mitsui Card (NL): Up to 5% cashback at three convenience stores and McDonald's.

3. Earn points using smartphone apps

• Use apps such as "Rakuten Check" and "Trima" that allow you to earn points just by walking.
• Supermarket and drugstore point cards (T Point, Ponta, etc.) can also be used.

4. Pay with points to help with living expenses

• By using the accumulated points for food, utilities, and communication costs , you can effectively reduce your living expenses.
• By taking advantage of "Furusato Nozei" (hometown tax donation) , you can purchase rice and other food items using points.

If you're a new graduate and want to reduce the initial costs of living alone, a share house is recommended.

When new graduates start living alone, the initial costs of renting a property (deposit, key money, agency fees, etc.) and the burden of rent can be a major issue. One solution to this is to use a shared house. Compared to renting a property in the city center, a shared house can significantly reduce the initial costs, monthly rent, and living costs, allowing you to start your new life economically.

Benefits of a share house

① Significantly reduce initial costs

In a normal rental contract, it is common to have to pay 4 to 6 months' rent for deposit, key money, brokerage fee, guarantee fee, etc. However, many share houses have no deposit or key money, and in some cases no guarantor company is required, which helps to keep initial costs to a minimum.

② The rent is cheap and the cost performance is good

The rent for a share house is often 20-50% cheaper than a regular rental property, and there are many properties in the city center where you can live for around 40,000-70,000 yen per month. In addition, many properties include utility bills and Wi-Fi fees in the rent, so you can keep your monthly fixed costs down.

3. Furnished and equipped with appliances, so you can move in right away

In a normal rental property, you would need to purchase a refrigerator, washing machine, bed, table, microwave, etc., but in a share house, you can use the furniture and appliances provided, which helps to reduce additional expenses. Since you will need less luggage when moving, you can start your new life smoothly.

④ Interacting with people reduces feelings of loneliness

Living alone as a new graduate can often feel lonely in an unfamiliar environment, but in a share house you can naturally interact with people in similar situations and it is an environment where you can easily ask for advice about life and work. In addition, there are many foreign residents in share houses, so you can expect to have intercultural exchange and improve your English skills.

5. The contract is simple and you can live there for a short period of time.

While rental contracts are generally for two years, many share houses allow short-term contracts starting from one month, which has the advantage of making it easy to move. Another attractive feature is the flexibility to move house even if you change jobs or get transferred.

If you would like to know more about the advantages and disadvantages of living in a shared house, please read this article.

"A thorough explanation of the advantages and disadvantages of share houses! How to choose the right one and tips for a comfortable life"

Points to consider when choosing a share house

When choosing a share house, be sure to check the following points:

• Location/Access: Check the distance from work or station
• Rent and common area fees: Are utilities and Wi-Fi fees included?
• Facilities and equipment: furniture and appliances, management status of common areas
• Resident atmosphere: View the property in advance and check the residents' atmosphere
• Contract terms: Check whether there is a minimum contract period or a deposit

Cross House Share House

What is "XROSS HOUSE"?

Cross House is a company that provides shared housing with low initial costs, mainly in Tokyo. They have a large number of properties aimed at new graduates and young working people, and are characterized by the fact that they offer reasonable occupancy prices.

The appeal of Cross House

• No deposit, key money, or brokerage fee: There is no need for expensive initial costs like renting, and you can move in immediately.
• The apartment is fully furnished and comes with all the necessities of life: refrigerator, washing machine, microwave, bed, etc.
• The rent is one of the lowest in Tokyo (with some properties available from as little as 30,000 yen per month): The cost is far lower than renting, so you can save money while living here.
• Flat-rate plan that includes utilities and Wi-Fi: Makes it easy to manage your monthly expenses and prevents unexpected costs.
• With over 1,000 properties available, you can live in the area of ​​your choice: We offer properties in a wide range of areas, mainly in the 23 wards of Tokyo.
• Short-term contracts are also OK (starting from one month): If you need to move for work reasons, we can accommodate you flexibly.

Cross House's representative share house areas

• Shinjuku, Shibuya, Ikebukuro area: Excellent access to the city center.
• Nakano, Koenji, and Sangenjaya area: A comfortable area with reasonable rent.
• Ueno/Akihabara area: Highly convenient and has many properties with good value for money.

Search for properties here

summary

When you start living alone as a new graduate, it is important to manage your initial costs and living expenses. You can reduce costs by understanding the breakdown of initial costs and negotiating properties with no deposit or key money, or by negotiating brokerage fees. You can also live a stable life by keeping your monthly rent to less than one-third of your take-home pay and reviewing your fixed expenses. Furthermore, by utilizing a shared house, you can minimize initial costs and live at low cost in the city center, so it is a good idea to consider it as one of your options. Start your new life comfortably while saving wisely!