The initial costs of renting are too high! A thorough explanation of the causes and specific ways to reduce them.

What is the average initial cost of renting an apartment?

The initial costs required when signing a lease agreement for a rental property can be a significant burden for many people. It's not uncommon to find situations where people can afford the rent but are unable to sign a lease due to the high initial costs. First, we'll explain the average initial costs of renting a property in detail, and then we'll introduce some tips for reducing those costs.

The typical rate is 4 to 5 months' rent.

The initial costs for a rental agreement are generally said to be equivalent to 4 to 5 months' rent. For example, if you are renting a property with a monthly rent of 70,000 yen, the estimated initial costs would be as follows:

As such, a general guideline for initial costs is about 4 to 5 months' worth of rent. However, some properties do not require a security deposit or key money ("zero-zero properties"), and choosing one of these may help reduce initial costs.

Differences depending on the region and property type

Urban vs. Suburban: Differences in initial costs depending on the area

The initial costs of renting a property vary greatly depending on the area where it is located. In particular, in popular areas such as central Tokyo, not only are the rents high, but the costs such as security deposits, key money, and brokerage fees also tend to be high. For example, in areas such as Shinjuku, Shibuya, and Minato wards within Tokyo's 23 wards, it is common for security deposits and key money to each amount to 1 to 2 months' rent, and as a result, it is not uncommon for initial costs to exceed 6 months' rent.

On the other hand, in major metropolitan areas like Osaka and Nagoya, initial costs are not as high as in central Tokyo, but security deposits and key money are still common. Because urban areas are popular, real estate companies and landlords have less incentive to lower prices, and it tends to be difficult to reduce initial costs even through negotiation.

Looking at regional cities and suburbs, you'll find more areas where initial costs are relatively low. For example, in major regional cities like Sapporo, Sendai, and Fukuoka, properties with no security deposit or key money are not uncommon, and in some cases, the use of a guarantee company is not required. Furthermore, in suburban areas, landlords often significantly reduce initial costs to attract tenants, and many properties with no key money can be found.

Differences in initial costs depending on the type of property

Initial costs vary greatly depending on the type of property. Newly built apartments, in particular, are very popular, and landlords often try to recoup a significant portion of their expenses at the time of contract signing, so it's common for security deposits and key money to be set at 1-2 months' rent each. In addition, new properties often require security equipment and the latest locks, and these costs add up, contributing to higher initial costs.

Conversely, older apartments and condominiums tend to have lower initial costs. In particular, properties older than 20 years often have no security deposit or key money, making them a good option for those who want to keep initial costs down. In older properties, landlords may offer discounts on brokerage fees or free rent (rent-free for a certain period after the contract starts) to avoid long-term vacancies.

Another option that can significantly reduce initial costs is a shared house. In most cases, a security deposit and key money are not required in a shared house; instead, a guarantee deposit and move-in fees are usually set at less than one month's rent. Furthermore, furniture and appliances are provided, which can drastically reduce moving expenses. Shared houses offer significant advantages, especially if you are considering short-term stays.

UR rental housing (public housing managed by the Urban Renaissance Agency) is also recommended for those who want to keep initial costs down. A key feature of UR rental housing is that there are no brokerage fees or key money, and no guarantor is required. Therefore, compared to typical rental properties, it's possible to reduce initial costs by hundreds of thousands of yen. While the rent isn't particularly cheap, it's an attractive option for those who want to minimize their initial expenses.

What are some cases where initial costs are particularly high?

The initial costs of renting a property vary greatly depending on the type of property and the contract terms, but there are several cases where the costs tend to be particularly high. Here, we will explain in detail the main factors and countermeasures.

Properties with high key money requirements

Key money is a kind of "thank you" payment made to the landlord when signing a contract, and it is generally not refunded upon moving out. Especially for newly built properties or properties in popular areas, it is common for key money to be set at 1 to 2 months' rent. Furthermore, in some areas of the city center, key money of 3 months' rent or more may be required, which significantly increases the initial costs.

<Reasons why key money is expensive>

• Properties that are in high demand (e.g., in the city center, near train stations, or recently built apartments)
• Landlords want to identify "good tenants" (to prevent early departures).
• Newly built or renovated properties (because they are equipped with new facilities)

<Countermeasures>

• Choose a property with no key money: Recently, the number of properties with no key money has been increasing, and there is room for negotiation, especially in older properties or those that are having difficulty attracting tenants.
• Check if you can negotiate a reduction: Depending on the property, you may be able to negotiate a reduction in the key money by talking directly with the landlord. This is especially true for properties that have been vacant for a long time, in which case they are more likely to agree to a reduction.

Properties with high guarantee company fees

Recently, many properties require tenants to join a guarantee company, which adds a significant burden to initial costs. When using a guarantee company, you need to pay a guarantee fee of 50-100% of the rent (about one month's rent) at the time of signing the contract. Furthermore, there may be an annual renewal fee of 10,000 to 15,000 yen, so the longer you live there, the more expensive it becomes.

<Reasons why a guarantee company is necessary>

• It's possible to sign a contract without a co-signer (which is reassuring for the landlord).
• To prevent disputes in lease agreements
• This makes it easier for foreigners, people who have just changed jobs, freelancers, and others with unstable incomes to sign contracts.

<Countermeasures>

• Choose a guarantee company with low guarantee fees: There are several types of guarantee companies, and their fees vary. The key is to consult with an intermediary and check if you can use a cheaper guarantee company.
• If you can provide a co-signer, look for properties that do not require a guarantee company: Depending on the property, you may not need to join a guarantee company if you provide a co-signer such as a relative. Check before signing the contract.

The cost of changing locks and house cleaning is high.

Initial costs often include things like "key replacement fees" and "house cleaning fees," which can sometimes be surprisingly expensive.

• Lock replacement fee: Lock replacement typically costs between 20,000 and 50,000 yen. In particular, properties with the latest security systems may charge significantly higher fees.
• House cleaning fee: House cleaning fees typically range from 30,000 to 80,000 yen. In particular, in cases where "advance payment" is required, you may be charged cleaning fees again upon moving out, so be careful to ensure that no unnecessary fees are included.

<Countermeasures>

• Check if you can refuse a lock change: Confirm in advance whether a lock change is mandatory, and if not, you can reduce the cost. In some cases, you can try negotiating, "Can I get a discount if I don't have to change the locks?"
• Review the breakdown of house cleaning costs and cut unnecessary expenses: Cleaning fees may include services such as "deodorization" and "antibacterial coating." By eliminating unnecessary options, you can reduce costs.
• Get quotes from multiple real estate companies and compare them: Even for the same property, initial costs can vary depending on the real estate agent. Contact several agents and choose the cheapest one.

Signing a contract during peak season (January to March)

The timing of your move also significantly impacts the initial costs. January to March is considered the "peak season," so initial costs tend to be higher than usual during this time.

<Reasons why initial costs are higher during peak season>

• Demand surges during the new life season (school enrollment, employment, etc.).
• Popular properties have high competition, making price negotiations difficult.
• Real estate companies tend not to offer discount campaigns.

<Countermeasures>

• Sign a contract between April and August to avoid peak season: After April, the demand for moving calms down, and discount campaigns such as "free rent (1-2 months rent free)" become more common, allowing you to significantly reduce initial costs.
• Target properties offering "free rent (1-2 months rent free)" during the off-season: Properties with favorable conditions such as "no security deposit/key money + free rent" are more likely to become available, especially during the off-season from June to August. If you have time to spare, it is recommended to avoid the peak season.

5 ways to reduce initial rental costs

The initial costs of renting an apartment are typically equivalent to 4 to 6 months' rent, which can be a significant burden for many people. However, by utilizing the right methods, it's possible to reduce these costs by tens or even hundreds of thousands of yen. Here, we'll explain five specific ways to minimize initial costs as much as possible.

① Choose a property with no security deposit or key money.

What are security deposits and key money?

• Security deposit: A deposit paid to the landlord as a guarantee (refundable upon vacating the property, but with deductions for repair costs, etc.)
• Key money: A fee paid to the landlord as a "thank you" (non-refundable).

Normally, a security deposit and key money equivalent to one to two months' rent are required, but recently, there has been an increase in properties known as "zero-zero properties" that do not require a security deposit or key money.

<Benefits of having no security deposit or key money>

• You can significantly reduce initial costs (savings of 100,000 to 200,000 yen or more).
• Even short-term stays don't incur unnecessary costs.
• Depending on the negotiations, other costs may also be reduced.

<Disadvantages and points to note>

• Properties without a security deposit tend to have high repair costs upon moving out.
• Properties without a key money deposit sometimes have slightly higher rent.
• In many cases, the use of a guarantee company is required.

② Find a real estate company with low brokerage fees.

The brokerage fee is a fee paid to the real estate company that brokered the property contract, and the going rate is usually one month's rent plus consumption tax (approximately 1.1 months' worth).

<Ways to reduce brokerage fees>

1. Find a real estate company that offers half-price or free brokerage fees.

• Some real estate companies offer contracts with a brokerage fee of 0.5 months' rent or less.
• For example, companies like "Able" and "Apaman Shop" sometimes run campaigns offering discounts on service fees.
• We also utilize websites like "Uchikomi!" that allow you to contract directly with landlords.

2. Choose a property where the landlord covers the brokerage fee.

• In some cases, the brokerage fee is "borne by the landlord," meaning the tenant incurs no cost.

3. Obtain multiple quotes and negotiate fees.

• Request quotes for the same property from multiple real estate companies and choose the one with the lowest commission.
• If you tell them, "Another company offered half the fee," they might be willing to negotiate.

③ Choose a property with a free rent period.

Free rent is a system where the rent is free for a certain period (1 to 3 months) after signing the contract. This is a perk offered by landlords as a way to reduce vacancies, and can mainly be found in the following types of properties:

• Properties in areas where it is difficult to find tenants
• Although the building is older, it has well-equipped facilities.
• Vacant properties after the peak season (January to March)

<Benefits of rent-free period>

• Initial costs can be significantly reduced (equivalent to 1-2 months' rent).
• You will have more financial leeway in your living expenses after moving in.
• Combining this with zero security deposit and key money can further reduce costs.

<Notes>

• A penalty fee may be incurred if you move out within a certain period.
• The rent may be set higher to account for the free rent period.
• Before signing a contract, be sure to carefully check the "cancellation conditions."

④ Utilize installment payments for initial costs

Recently, more and more real estate companies are offering installment payment services for people who find it difficult to pay initial costs in a lump sum. The following items are eligible for installment payments:

• Security deposit and key money
• Brokerage fee
• advance rent
• Guarantee company initial fee

<Installment payment methods>

1. Credit card payment

• Pay part or all of the initial costs with a credit card and use installment or revolving payments.
• However, be aware that revolving credit payments have high interest rates.

2. Use the real estate company's installment payment plan.

• Some real estate companies offer interest-free or low-interest installment payments.
• Examples: "Smooth," "Rental guarantee in partnership with Epos Card," etc.

3. Use a service that allows you to pay rent later.

• By delaying rent payments, the burden of initial costs can be reduced.
• Examples: Services such as "OHEYAGO" and "pay rent later".

⑤ Negotiate and reduce option costs.

When signing a rental agreement, real estate companies and property management companies often add various optional fees. Many of these can be reduced through negotiation.

<Reducible Options>

• Key replacement fee (average 20,000-50,000 yen) → Negotiable if "the previous tenant already replaced the keys."
• Deodorizing and antibacterial coating (10,000-30,000 yen) → Request removal if not needed.
• House cleaning fee (30,000 to 80,000 yen) → If the fee is higher than the market rate, check the estimate and negotiate.
• 24-hour support fee (10,000-20,000 yen) → Check if membership is mandatory, and delete if not.
• Fire insurance (¥15,000 to ¥20,000) → You may be able to find and purchase cheaper insurance yourself.

Let's also consider the option of living in a shared house.

For those who find the initial costs of renting a property too high, a share house is an attractive option. A share house is a style of housing where multiple residents share one property, significantly reducing initial costs compared to a typical rental. Also, since furniture and appliances are provided, there is no need to purchase them new, and moving in is smooth. Furthermore, utilities and internet are often included in the rent, keeping monthly living expenses down. Share houses are an ideal choice, especially for those considering a short-term stay or those who want to minimize their living costs.

Why you can significantly reduce initial costs with a shared house

Unlike typical rental properties, share houses often do not require a security deposit or key money, significantly reducing initial costs. While rental agreements usually require 4 to 6 months' rent as a deposit, share houses often allow you to move in with a security deposit of around 10,000 to 30,000 yen, making them much easier to get into. Furthermore, furniture and appliances are provided, eliminating the need to purchase them separately and reducing moving expenses. Many share houses also include utilities and internet in the rent, further reducing monthly fixed costs and minimizing overall expenses.

Advantages of a shared house

The biggest advantage of living in a share house is that it keeps initial costs and living expenses down. Many properties do not require a security deposit or key money, and are furnished with furniture and appliances, allowing you to start your new life right away. In addition, rent is generally set to include utilities, which helps stabilize monthly expenses. Furthermore, share houses have common spaces, making it easy for residents to interact with each other, so they are also suitable for people who want to make new friends. They are especially ideal for people who want to interact with people from overseas or expand their professional or hobby networks. Many properties also allow short-term stays, which is another attractive feature as it allows for flexibility in your lifestyle.

If you'd like to learn more about the advantages and disadvantages of living in a shared house, please also check out this article.

"A thorough explanation of the pros and cons of shared housing! Tips for choosing the right one and living comfortably"

Disadvantages of shared housing

While shared housing offers many advantages, a major drawback is the difficulty in maintaining privacy. Even with a private room, you'll need to share common spaces like the living room, kitchen, and bathroom with other residents, which can lead to stress due to differing lifestyles. Furthermore, you'll need to adhere to the rules of shared spaces, and poor cleaning or garbage disposal habits among residents can cause problems. Additionally, popular shared houses fill up quickly, so it's crucial to seize the opportunity to move into your desired property.

Who is suited to living in a shared house?

Share houses are ideal for those who want to minimize initial costs. They are especially suitable for those planning short-term stays or those who want to move easily without buying furniture and appliances. They are also suitable for people who enjoy socializing and can easily adapt to new environments. On the other hand, they offer significant advantages for those who want to manage their monthly living expenses with a fixed amount without worrying about utility costs. Conversely, they may not be suitable for those who value their alone time or who are uncomfortable living with people who have different lifestyles.

If you'd like to learn more about who is suited to living in a shared house and who isn't, please see the article below.

"Who is suited to living in a shared house? We explain the characteristics and benefits."

"What are the characteristics of people who are not suited to living in a shared house? Key points for choosing a suitable place to live."

Make sure you understand the costs involved in renting an apartment, in addition to the initial rental fees.

When signing a lease agreement for a rental property, people tend to focus only on initial costs such as security deposits, key money, and brokerage fees. However, various other expenses arise during the actual move. Knowing these costs in advance will help prevent budget overruns and ensure a smooth start to your new life. Here, we will explain in detail some of the typical expenses that arise in addition to the initial costs of renting.

Moving expenses

Moving involves the cost of transporting your belongings. For a single person, the cost is typically between 20,000 and 50,000 yen, while for a family, it's around 50,000 to 100,000 yen. The price varies depending on the distance of the move, the amount of belongings, and whether it's peak season or not. To keep costs down, it's recommended to get quotes from multiple moving companies and choose the cheapest plan. Moving during the off-season or reducing the amount of belongings and using a single-person moving package are also effective methods.

Cost of purchasing furniture and home appliances

Don't forget to purchase furniture and appliances for your new home. Essential items include a refrigerator, washing machine, microwave, lighting, curtains, and a bed. Buying all of these new can cost between 50,000 and 200,000 yen, so it's important to find ways to minimize costs. Consider options such as choosing a furnished apartment, using second-hand shops or flea market apps, or getting items from friends or family.

Internet contract and activation costs

In rental properties, you often have to arrange your own internet connection, which can incur initial costs such as contract fees and installation fees. These typically range from 5,000 to 20,000 yen, but installation fees may be waived if you take advantage of provider promotions. Choosing a property with free internet or using a pocket Wi-Fi device are also effective ways to reduce costs.

Fire insurance premium

When signing a rental agreement, fire insurance is almost always required. The going rate is around 15,000 to 20,000 yen for two years, but it can sometimes be cheaper to find and contract with an insurance company online yourself rather than using the one specified by the real estate company. You can also reduce the insurance premium by checking the coverage details and removing unnecessary options.

Costs for changing your residence registration and various other procedures

After moving, you will need to complete procedures such as changing your registered address and updating the address on your driver's license. Changing your registered address will incur a fee of a few hundred yen, and you will also need to consider procedures such as mail forwarding and payment of NHK (Japan Broadcasting Corporation) subscription fees. To reduce the hassle of these procedures, it is a good idea to check the required documents in advance on the local government's website.

summary

The initial costs of renting an apartment are typically equivalent to 4 to 6 months' rent, which can be a significant burden for many people. However, these costs can be reduced by choosing properties with no security deposit or key money, using real estate companies with low brokerage fees, or looking for properties with free rent periods. Furthermore, choosing a shared house can significantly reduce initial costs and living expenses. In addition, consider other expenses such as moving costs and the cost of purchasing furniture and appliances to make a smart move.