Real Estate Japan recently conducted an email interview with AI CREATE Ltd., a bilingual Tokyo-based real estate brokerage specializing in helping foreign clients find rental properties in the greater Tokyo area.
Below they provide insightful answers to questions they often receive from their clients, including:
- How long is a typical lease contract?
- Can I rent an apartment as a tourist?
- Are apartments in Japan furnished?
- Who can be my guarantor?
- When can I start applying for an apartment?
- Can I move in right away?
- What documents to I need to apply for an apartment?
How long is a standard lease contract?
In Japan a regular lease contract has a two year term. These properties, obviously, are meant for people who plan to stay in Japan for an extended period of time. This is good to know, for example, if you are coming from the United States where there is a lot of flexibility in rental property leases (where a lease could be as short as three months and still be considered a standard lease).
Standard leases in Japan have a built-in renewal clause. This means that at the end of the two-year term, the property manager or owner will contact you to ask whether you want to renew the lease. However, in almost all cases, there is a lease renewal fee, which is usually equal to one month’s rent, so it’s good to plan ahead for this expense in case you are planning to stay longer than two years.
The other main type of lease in Japan is the fixed-term lease, in which you rent the property for a fixed amount of time that is set by the property owner. The lease term can be any length of time from a several months to several years. When the lease expires, the tenant has no opt-in right to renew the lease. These leases are sometimes used by people who own a property but then are transferred overseas to work; while they’re out of the country, they lease out their property, but then expect to move back in when they are transferred back to Japan. So when you sign a lease, it’s important to know what kind of lease you are signing and whether you will be offered the option to renew.
Some properties in Japan are set up as short-term rentals. The lease period for this type of property is usually a minimum of one month, but the length can vary. Most often, short-term rentals are fully furnished private apartments, share houses (also known as guest houses), or serviced apartments (where you’ll also have weekly maid service or other hotel-like services as part of the rental). These properties are meant for tourists or business people who only plan to be in the country for a short period of time. They can also be a great option for people who have just come to Japan and aren’t sure if they’ll be staying for a year. Please see this article for more info on the advantages and disadvantages of staying a share house: How much can you save by staying at a share house in Japan?
Status of residence
It’s important to know the differences between the different types of leases in Japan because unless you have a long-term status of residence (basically, a working visa or a student visa), you will not qualify for a standard lease and cannot rent a regular long-term apartment). So, for example, if you are in Japan on a tourist visa, you cannot enter into a regular lease.
Are apartments in Japan furnished?
As a general rule, regular rental properties are not furnished. Regular rental properties are properties that are meant for long-term rental. When you move into a regular rental apartment or house, you should expect to buy your own furniture and appliances, including such things as:
- All furniture
- Washing machine
- Microwave and other small appliances
Also be aware that some rental properties also do not come with lighting fixtures, lamps, or curtains. It’s also good to know that an electric dryer (for laundry) is not a common household appliance in Japan, as most people air dry their clothing on laundry lines. It is possible to buy an electric dryer in Japan, but you should not expect to have one in your apartment as a standard pice of equipment.
For more on this, please see: Other hidden costs of living in a Japanese apartment
Fixed-line internet connections and WiFi are also not standard in rental apartments. For more on this, please see: Setting up internet at home in Japan
How much should I expect to pay upfront in move-in costs?
In general, you should budget between four and six months’ rent for move-in costs. This is very high compared to some other countries, so it’s good to know ahead of time and to avoid any surprises!
These move-in costs usually comprise of at least one month’s deposit, at least one month’s brokerage fee (agency fee), sometimes one month’s key money, and a guarantor fee (which you pay to a company to guarantee your rent, in case of deposit, separately from your deposit).
Other upfront costs include a lock exchange fee and renters’ insurance.
For more on this please see: Upfront fees when renting an apartment in Japan
Why do I have to have a guarantor? Who can be my guarantor?
Except in very rare cases, everyone who rents an apartment in Japan is required to have a guarantor, whether you are a Japanese or foreigner.
A guarantor (or hoshounin, 保証人) is a person or company in Japan who will vouch for you as a tenant. If you fail to pay your rent, your landlord will go to your guarantor to collect.
In general, who can qualify to be your guarantor? Most property managers require that a guarantor be a Japanese person who makes a certain level of income. If you don’t have someone who can be your guarantor based on these criteria, you can use a guarantor company. Guarantor companies usually charge between half a month’s rent to a full month’s rent to guarantee a standard two-year lease. Your agent may be able to introduce you a guarantor company if you aren’t able to find a suitable one by searching online.
How soon should I start applying for an apartment? Can I apply for an apartment once I have an offer letter from an employer?
You will not be able to apply for an apartment in Japan until you at least have your Certificate of Eligibility (COE) in hand and preferably your actual visa. So, even an offer letter from an employer by itself is not enough document to start the application process.
For more on this, please see: Top 3 insider tips for getting your apartment application in Japan approved
If you are coming to Japan for work, our partner agent Ai Create tells us that you will not pass tenant screening unless you are actually currently working, with a documented stable income that is sufficient to cover your rent.
The apartment application process
The steps in applying for an apartment are straightforward:
- Submit rental application
- Tenant screening
- If you’re approved, sign the lease and move in
However, there are some important things to keep in mind.
How soon will I be able to move in?
From the time you submit your application, it will take between ten and fourteen days for tenant screening. In other words, you should not expect to be able to move in immediately.
It’s also good to know that during the busy season (January to March), there are often multiple applications for a single property, and applications are processed on a first-come first-served basis, so once you find an apartment you want, you should submit your application immediately or risk losing it to another applicant.
What documents do I need for my application?
In addition to the actual application form, you also need to provide the following supporting documentation:
- Copies of your passport and Residence Card
- You will be asked to supply a passport and Residence Card for each person who will be occupying the apartment.
- If you don’t yet have a Residence Card, you need to provide a copy of your Certificate of Eligibility or visa.
- Copies of financial documents for proof of income
- To prove that you will be able to pay the move-in costs and monthly rent.
- A recent bank statement
- If you are applying for a regular rental apartment through a Japanese real estate agent, the bank statement must come from a domestic Japanese bank.
- You may also be asked to submit:
- Copies of two or three recent pay stubs
- A copy of your annual tax withholding slip (gensen choushuu hyou, 源泉徴収票).
Many applications are held up because of incomplete documentation. When this happens, the property manager or landlord will place your application on hold and move on to the next application in line.
For more on the required documents, please see: What documents do I need to rent an apartment in Japan?
Contact AI CREATE LTD.
For more information on how AI CREATE can help you find your home in Tokyo, please contact them at the links below!
To see a list of properties currently handled by AI CREATE Ltd., please see:
Lead photo: iStock