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Key cash, known as reikin (礼金) in Japanese, is a cost that you just make to the owner as a part of your move-in charges. It won’t be returned to you whenever you vacate your house.

It’s typically defined as a cultural customized or as a relic of the period of fast post-war financial progress, when Japan skilled acute housing shortages in city areas. Potential tenants would pay key cash to landlords to get to the top of the road.

Are you required to pay key cash?

No, in any respect! Nearly all of residences in Japan don’t require key cash.

Within the Ministry of Land’s 2020 Residential Housing Market Trends report, about 41.6% of individuals surveyed mentioned that they did pay key cash once they moved in to their rental house, and about 66.8% of those that paid key cash mentioned that they paid one month’s hire.

Nearly all of properties listed for hire on Real Estate Japan additionally don’t require key cash. As of this writing, about 68.4% of properties on our website are no key money properties.

How a lot is vital cash on common?

Renters nationwide pay on common about ¥77,400 in key cash, based on the Ministry of Land.

Why do landlords cost key cash?

If key cash isn’t required, why do some landlords cost key cash and why do some renters willingly pay?

Fascinating properties which can be in demand usually tend to cost key cash. These embrace newer properties with high-end gear and facilities in nice areas, for instance. Landlords often don’t have any issue renting these sorts of properties, to allow them to cost key cash and might nonetheless count on to lease them out. Additionally, some renters are very explicit about the place they stay or what number of rooms they’ve or what the kitchen is like, for instance. If you’re strict about what your house ought to be like, you might be prepared to pay key cash to get it.

Some landlords cost key cash as a method to attempt to entice tenants with very secure funds. The pondering is that people who find themselves capable of pay key cash are extra financially secure and fewer more likely to default on their hire.

One other rationale for charging key cash is to make the month-to-month hire look cheaper. A landlord may scale back the acknowledged month-to-month hire by a certain quantity, for instance, however then cost one month’s hire as key cash to greater than cowl the distinction.

For instance, if the acknowledged month-to-month hire is ¥78,000, with a normal lease contract of 24 months and one month’s key cash, the owner’s revenue for the interval can be (78,000 x 24) + 78,000 = 1,872,000 + 78,000 = ¥1,950,000. Nevertheless, if the month-to-month hire is ¥80,000, with no key cash, the owner’s revenue can be 80,000 x 24 = ¥1,920,000. The owner makes an extra ¥30,000 over the two-year lease time period by charging ¥2,000 much less in month-to-month hire however including one month’s key month as a move-in price.

So, as a renter, how do you keep away from paying key cash?

Learn how to keep away from paying key cash

1. No key cash residences, solely please!

The best manner to not pay key cash is to make it a part of your search standards. On Actual Property Japan, whenever you’re searching for properties, simply test the “No Key Cash” field!

No key cash, please!

For those who stroll right into a bricks-and-mortar actual property company or are working with considered one of our companion brokers after making an inquiry on Actual Property Japan, inform them that you just don’t wish to pay key cash. If that is a part of your search standards, they gained’t advocate key cash properties to you.

2. Keep in a share home or short-term rental

Virtually all share homes and short-term leases don’t cost key cash. Many additionally don’t require a deposit, company charge, or guarantor charge, so they’re a fantastic possibility for these seeking to decrease their move-in prices.

Right here’s a fantastic instance of a furnished short-term house in a superb location close to Sasazuka Station (two stops from Shinjuku), with very low move-in prices (no key cash, no deposit, no company charge, no guarantor charge). This house is offered for move-in from August 2, 2022. Whole month-to-month hire is ¥180,000. Please click on the picture for the complete itemizing. Picture: Bolte

Personal room for hire in share home close to Oizumigakuen Station on the Seibu Ikebukuro line in Tokyo. No deposit, no key cash, no company charge, no guarantor charge. Whole month-to-month price ¥58,000. Please click on on the picture for the complete itemizing. Picture: Irodori Manufacturing unit

Click on right here to see all short-term apartments at present on Actual Property Japan.

3. Negotiate a reduction

It’s doable to barter a small low cost on key cash and even hire.

It’s simpler in your agent to barter in your behalf at sure occasions of the 12 months and for sure sorts of properties. In Japan, most individuals transfer in March as a result of the enterprise and faculty 12 months begins in April. The off-season is through the summer season months. Landlords and property managers don’t need their properties to take a seat empty and are generally prepared to supply a small low cost if the property was not leased out through the peak season.

Properties which have been vacant for an prolonged time, older properties, and those who aren’t nicely priced (which means that there’s a non-negligible distinction in move-in prices or month-to-month hire) in contrast with related properties are candidates for negotiation.

How a lot of a reduction are you able to count on? Irrespective of how lengthy a property has been vacant, it’s not reasonable to count on the owner to supply an enormous low cost. It’s extra reasonable to assume within the vary of ¥5,000 to ¥10,000, however after all, you must ask your agent to attempt for as a lot of a reduction as doable.

For some properties, nonetheless, it’s unlikely that you just’ll have the ability to negotiate on the month-to-month hire or key cash. These embrace newer properties with nice facilities and people in extremely fascinating areas.

To see an entire checklist of no key residences at present accessible on Actual Property Japan, please click on right here: No key money apartments

Superbly appointed short-term house accessible for short-term rental within the quiet and upscale neighborhood of Yotsuya, close to Shinjuku. No deposit, no key cash, no company charge, no guarantor charge. Please click on on the picture for the complete itemizing. Picture: Manjushoji

You may additionally be concerned about

Tokyo share housesHow much can you save by staying at a share house?

How to rent an apartment in Japan from overseas

What should I budget to move to Japan?

What documents do you need to rent an apartment in Japan?

How much you should budget for move-in costs to rent an apartment in Japan?

What Japanese real estate agents want foreigners to know about renting an apartment in Japan

Questions your real estate agent will ask when you’re renting in Japan

How to find a pet-friendly apartment in Japan

Translation of Japanese apartment lease application – Japanese- English Cheat Sheet

Lead picture: Short-term apartment available for rent in Takadanobaba, Tokyo, picture: Matsuri Applied sciences

Supply: Ministry of Land, 2020 Residential Housing Market Trends (PDF in Japanese)


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