Why Is It Difficult For Foreigners To Rent An Apartment In Japan? A Step-By-Step Guide To Finding A Japanese Home

Four Steps to Renting a Property in Japan: View, Reserve, Review, and Handover

The four major steps to renting a property in Japan are viewing properties, reserving a property, waiting for your application to be reviewed, and finally handover of the keys. The whole process takes around a month to complete but could be as quick as two weeks. In other countries, renting a house is probably an easier process; but in Japan, these four steps are mandatory.

It might sound quite straightforward so far, but in fact, there are quite a lot of unwritten rules hiding in each step—let’s learn about them one by one.

Viewing: You Can See, but You Can’t Rent: The “No Foreigners” Policy

Properties in Japan are generally negotiated with the landlord through a real estate agency. You will almost never meet the landlord, and dealing directly with the landlord without the agency is practically unheard of. Most people find information about rental housing from websites, apps, store posters, and flyers. If you come across a place you are interested in, you can contact the agency to make an appointment for a viewing.

However, for foreigners, finding an accommodation listed on one of those channels doesn’t always mean you will get to see it. In fact, many landlords in Japan "refuse to rent to foreigners," with some of them even specifying the nationalities that will not be considered as potential tenants. Listings don’t normally specify that a non-native is not accepted—it is only when you email or ask the agent directly about the property, that you are told "Sorry, this place can’t be rented by foreigners."

Therefore, regardless of how good the photos look or how budget-friendly a place is, you have to ask the agent if it can be rented by a foreigner first by saying 「すみません、こちらの物件は外国人でも借りられますか。」(sumimasen, kochira no bukken wa gaikokujin demo kariraremasuka?)

One thing to note is that there are also unscrupulous realtors that will deliberately advertise properties in great conditions or at low rents, but are in fact rented out or even non-existent, in order to bait customers into visiting their shops. Once these agents have lured people in, they will make customers start their search right from the beginning, which would probably end up being a waste of time and effort, and more often than not there are major problems with the apartments they show. You’ve been warned!

After viewing the property, the agent will produce an “initial costs table" listing all the expenses of renting the apartment for the first month. They include the deposit, reikin (a one-time fee for the owner), key exchange fee, and the agent’s commission, all of which can amount to 4 to 5 times the monthly rent. Further explanations on these “initial expenses” and property’s listing information, however, will be saved for another time.

◎Tips For Successfully Renting an Apartment:

1. If you are very fluent in spoken Japanese, you can go to one of the larger localized real estate agencies (e.g. 21st Century) to try your luck. Some of them might even help convince the landlord or property management company to rent the apartment to you.

2. Properties that are built and managed or leased directly by real estate agencies are generally more expensive, but also of higher quality.

Reservation: First Come but Not First Served? Find a Japanese Friend First!

Once you have agreed on the initial expenses, the agent will have you complete an application form, which requires you to fill in your basic personal data, company and career information, and provide a guarantor or emergency contact.

“A guarantor?” you may be asking. In Japan, renting a property requires having a guarantor, usually someone who is a friend or a relative of the tenant. Guarantor companies can be used in some cases, but the tenant would still need to provide a Japanese relative or friend (or in a few cases, a foreigner living in Japan) as the emergency contact. So, if you want to rent a house, you need to know someone who is Japanese and willing to vouch for you or fork out some cash to hire a guarantor company, otherwise, you won’t be able to move forward with the application.

Furthermore, once an application for a property is sent out successfully, agents will ask you not to cancel it, or if you need to do so, do it as early as possible. This is because after a request is sent out and approved, the property management company will contact the internet and TV companies to start the reconnection process, which is very labor-intensive. On the other hand, it also prevents people from applying for properties indiscriminately and taking away opportunities from other potential tenants.

However, if you find another property that you are absolutely in love with after having just applied to one, or if you are unable to move in because of personal reasons, be sure to email or call the agent to cancel your application as soon as possible. Otherwise, not only is it troublesome for the agency, but it could also affect your credibility—you may find the company less willing to help you with your future applications.

Application Review: It’s All Down to Luck, But Your Job and Guarantors Are Crucial Factors

After submitting the application, it could take one to two weeks for the landlord or the management company to review it. It can be a stressful time for the applicant, because if rejected, they would have to restart the search process, and the other party usually won't disclose the reason behind the rejection.

So, how do you increase your chances of passing a review? Your guarantor or emergency contact person and your job are the keys.

The review is mainly to help the landlord avoid potential problems, such as unpaid rent, the tenants leaving without notice, or the tenant making a mess of the property. Therefore, a basic judgment is made based on the information submitted in the application.

For most foreigners who generally do not have any credit history in Japan, their annual income, company size, and chosen guarantor will become the focus of the review. Someone who works in a large-scale company or a company that is willing to be their guarantor will have little to no problems getting an approval. But even if you work for a smaller company, as long as you have a full-time job and can prove that you have sufficient regular income to cover your rent, your application will typically be accepted. As a side note, a common benchmark for a review is whether the rental cost falls within 25-30% of the applicant’s monthly salary. If you are trying to apply for a property where the rent exceeds 30% of your income, you are unlikely to get a pass.

In addition, the occupations of your emergency contact and guarantor can also be crucial. For example, if he or she is a civil servant such as a public school teacher or an employee of the Tokyo City government, or in a managerial position in a renowned company, your application is more likely to succeed, as it gives the landlord or management company more assurance.

◎Tips For a Successful Rental Application:

1. Having a full-time job in a legitimate company is essentially a prerequisite.

2. Only want to work part-time? Find a share house, a foreign property agent, or a foreign landlord (preferably of your own nationality).

3. Foreign students should check if they can use their school as a guarantor and apply for "Comprehensive Renters’ Insurance for Foreign Students" (留学生住宅総合補償) to substitute for expensive guarantor companies.

Handover: You’ve Got the Key, Now What? This Is Just Another Beginning...

After passing the review, you are about to sign the rental agreement and get the keys! But don’t get too excited just yet—this is Japan, after all, so you’re not out of the woods yet.

More often than not, properties handed over to new tenants come unfurnished, meaning no furniture, no appliances, and in rare cases, not even a light bulb! You also have to reconnect the utilities—water, gas, and electricity—by phone or online. Otherwise, you might find yourself literally staring at nothing but the bare walls of your new home. So, make sure you find time to sort these things out beforehand.

The handover will be conducted at the real estate’s office, with the terms of the rental contract explained to you, as well as compensation clauses should damages occur. It is also a Japanese legal requirement for a qualified real estate broker to go through the details of the contract and answer your questions. If the broker doesn’t produce his or her license, be sure to ask for it in order to protect your rights.

This is crucial because if differences arise in the understanding or interpretation of the rental contract, you may find yourself having to dig deep into your pockets when you end your contract.

Once you have signed the contract, you will get a form or a postcard, along with your contract and keys, from the agent. Generally speaking, the agent won’t accompany you to inspect the property for scratches or dents; you have to do it yourself and write down any issues on the form or postcard. Therefore, the first thing to do when you arrive in your new home is not to move in, but to take a good look at every wall and corner, document and photograph any issues, and send the form or postcard back to the agency. More importantly, if there is anything broken or in such a bad state that it cannot be used, inform the management company immediately for inspection and repair, otherwise, they could accuse you of the damage and you might be responsible for the cost of repair.

◎Handy Tips For a Trouble-Free Rental:

1. When filling out your inspection form, don’t go into as much detail as “5cm stain on kitchen wall.” Unless there is something missing, a simple description like “stain on kitchen wall” is enough.

2. Take photos of issues if possible before you move in, to prove to the management company that they were not caused by you.

3. Some property companies may try to charge exuberant amounts of compensation at the end of a tenancy. Be sure to prepare evidence and reasons to support your own argument to avoid being bullied into paying.

Other Things to Know When Renting a Place in Japan

Japanese Words: Reikin 礼金 ／ Shikikin 敷金 ／ Kyoekihi 共益費 ／ Kanrihi 管理費

The four most common keywords with regards to rental properties are: reikin, shikikin, kyoekihi, and kanrihi. 

・Reikin: The reikin is a gratuity you pay to your landlord for renting out their property. While it usually amounts to one or two month’s rent, some apartments require none at all.

・Shikikin: Shikikin is the deposit, usually the equivalent of one or two month’s rent. This will be returned to you after deducting cleaning and repair costs at the end of the tenancy. Realistically, it is rare to be able to have the full amount returned—you'll be lucky to get half of it back.

・Kyoekihi: Kyoekihi is the fee that pays for the maintenance of the common areas of the building, however, this is rare to see and is usually included in the management fee.

・Kanrihi: Kanrihi is the fee that pays for security and property management and is normally under 10,000 yen per month. 

Building Structure / Public Water and Gas

It is important to note that the building structure, public water, and gas are factors that may affect the living environment and expenses. The building structure refers to what the property is built of: wood, light-steel, or reinforced steel. Wooden structures are generally the least recommended, while the most recommended are those made of reinforced steel.

Public waterways and gas pipelines are both managed by the government and are not restricted to any utility company. You can choose from the most popular gas and power companies, or sign a contract with one that offers a special deal such as cell phone companies that also offer electricity at a discount. 

Transaction Method / Real Estate Agency

Agency fees are related to the transaction type and a careless choice could cost you up to a month of extra fees! Choosing the right realtor is also essential, so go for a renowned company or one with promotional campaigns offering discounts to ensure you find a good home without costing an arm and a leg.

Don’t Know Where to Live? Check Out the Most Popular Neighborhoods Within the Greater Tokyo Area in 2020

Every year, famous Japanese real estate company LIFULL HOMES publishes a ranking of the most popular locations in the greater Tokyo area among Japanese people. If you really can’t decide on where to live, this might give you some suggestions.

1. Ikebukuro

Ranked first for the fourth year in a row, Ikebukuro is wildly popular among people of all nationalities. It is an accessible transport hub where various JR lines, the Seibu-Ikebukuro line, the Tobu-Tojo line, and the Tokyo Metro all pass through. What’s more, there are a plethora of department stores, shopping streets, and affordable supermarkets in the neighborhood, making shopping very convenient and much cheaper than places like Shinjuku or Shibuya. No wonder Ikebukuro is many people’s favorite choice!

2. Kasai

With more and more restaurants opening in the area, Kasai is just a 20-minute train ride from Tokyo Station. Haneda Airport and Narita Airport are both only one bus ride away; even Tokyo Disneyland is accessible by bus. Being a little away from the city center, rent is relatively cheap, yet it has no shortage of eateries to choose from. Once you experience life in Kasai, you wouldn’t want to leave! The only downside is that the trains do get very packed during the morning rush hour.

3. Kawasaki

Swiftly appearing on the radar of the younger generation is Kawasaki, an area that has recently undergone redevelopment and renewal, with brand-new shopping malls flanking the station. Kawasaki sits conveniently between Tokyo and Yokohama, while Atami and other sightseeing areas are also easily accessible. The only thing to be aware of is safety—particularly on the west side of the station, which used to be a red-light district. Because of this, finding a home on the east side instead would be a better idea.

This concludes the guide to renting a property in Japan. With these tips and suggestions, hopefully you will have fewer problems finding a nice home!

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