The first shock of renting an apartment in Japan is rarely the monthly rent. It is the amount due before you move in.
For a unit renting at 80,000 yen per month, it is not unusual to pay 500,000 to 600,000 yen upfront. Key money, a security deposit, a brokerage fee, advance rent, a guarantor fee, insurance — the costs stack up quickly, and they stack up before you have spent a single night in the apartment. Understanding what each of these is, where it comes from, and why it exists is the first practical task for anyone navigating the Japanese rental market.
The Upfront Costs, Listed
A standard breakdown of initial costs when renting in Japan looks like this:
Reikin (key money): zero to two months’ rent, non-refundable Shikikin (security deposit): one to two months’ rent, partially refundable on departure Brokerage fee: one month’s rent plus consumption tax Advance rent: one month (the following month paid in advance) Guarantor fee: approximately 0.5 to one month’s rent, if using a guarantor company Fire insurance: roughly 10,000 to 20,000 yen
Added together, these typically come to four to six months’ rent paid before moving in. On an 80,000 yen apartment, that means somewhere between 320,000 and 480,000 yen due at signing. The monthly rent figure that appears in listings tells only part of the story.
What Reikin Is
Reikin translates literally as “gratitude money” — a payment made to the landlord as a gesture of thanks for being allowed to rent the property. It is paid at move-in and is not returned when you leave.
The most widely cited explanation for its origin connects to the severe housing shortage in Japan following the Second World War. With accommodation desperately scarce, being granted tenancy was understood as a genuine favor, and tenants began offering money to landlords as a voluntary expression of gratitude. The practice became convention and eventually an expectation.
A second theory traces the custom to the practices of migrants from the Korean peninsula in early twentieth century Tokyo. The historical record is not entirely clear, and the origin story continues to be debated. What is certain is that reikin is not a legally required payment — it is a custom that became embedded in the market.
Its logic has been questioned for decades. From the tenant’s perspective, reikin is a pure loss: money paid for nothing except the right to sign a lease. In markets with high demand, landlords have been able to maintain it. In areas where vacancies are common, the calculation shifts — which is part of why reikin-free properties have become more prevalent as Japan’s population has declined.
What Shikikin Is
Shikikin is the security deposit, and unlike reikin, it is in principle refundable. When a tenant moves out, the deposit is returned minus any amount required to cover damage to the property.
The difficulty lies in what “damage” means.
The concept at the center of shikikin disputes is genjo kaifuku — restoring the property to its original condition. Japan’s Ministry of Land, Infrastructure, Transport and Tourism has published guidelines on this question, establishing that normal wear and tear from everyday living is not the tenant’s financial responsibility. Faded walls from sunlight, minor scuffs, aging of surfaces over time — these are considered the landlord’s cost, not the tenant’s.
The guidelines exist because the disputes are real and common. Tenants — particularly those unfamiliar with their rights — have been charged for restoration costs that properly belong to the landlord, and have paid rather than contest. Foreign tenants face an additional disadvantage in these situations: the combination of unfamiliarity with Japanese tenant protection law and limited Japanese language ability makes pushback difficult. Knowing what the guidelines say before signing — and before leaving — matters.
Guarantors and Guarantor Companies
Traditional Japanese rental contracts required a hoshounin — a guarantor, typically a family member or close personal contact, who would assume financial responsibility for unpaid rent if the tenant defaulted.
For foreigners newly arrived in Japan, this requirement has historically been one of the most significant barriers. Without established personal connections in the country, producing a guarantor is often simply not possible.
The guarantor company — hoshougaisha — emerged as the market’s response. These are private companies that provide the guarantee function for a fee, typically 0.5 to one month’s rent paid upfront, sometimes with an annual renewal fee thereafter. The landlord receives the same protection; the tenant does not need a personal guarantor.
Guarantor company use has become standard in much of the rental market, and properties that still require a personal guarantor are now a smaller share of what is available. For foreign tenants, this shift has been meaningful. The market that required something most foreigners could not provide has largely moved to a format that treats the guarantee as a purchasable service.
How the Process Works
Finding and securing a rental property in Japan follows a reasonably consistent sequence.
Search. Most people begin with online portals — SUUMO, HOME’S, and athome are the major platforms. Listings include floor plans, photos, and the full breakdown of initial costs. Narrowing by area, budget, and building age is standard.
Viewing. Properties are shown through real estate agencies. Viewings are free and typically arranged through the agency that holds the listing.
Application. Submitting an application requires proof of income, identification, and for foreign nationals, a residence card. Guarantor information — personal or company — is required at this stage.
Screening. The landlord and any guarantor company conduct a review. Income level, employment status, and nationality may all factor into the decision. The process takes several days to a week.
Contract. Once approved, the contract is signed and the initial costs are paid. A licensed real estate agent is required by law to explain the key terms — the jūyō jikō setsumeisho — before signing. Keys are handed over after payment is confirmed.
What Foreign Tenants Encounter
The rental market in Japan presents specific challenges for foreign nationals that go beyond the financial.
Refusal. Some landlords decline to rent to foreigners. The stated reasons vary — language barriers, concerns about cultural differences in how common areas are used, difficulty in contacting tenants in case of problems. The practice occupies a legally ambiguous space, but it is a real feature of the market. Foreign tenants encounter it with enough frequency that knowing it exists is simply part of being prepared.
Language. Rental contracts are legal documents written in formal Japanese with specialized vocabulary. Understanding what is being signed requires either strong Japanese ability or an agency that provides foreign-language support. Signing without understanding is a risk that produces problems at departure, usually around the interpretation of shikikin deductions.
Cultural expectations. Garbage sorting rules in Japan are specific, vary by municipality, and are taken seriously by neighbors and building management. Noise expectations lean quiet. Greeting neighbors when moving in is the norm. These are not formally part of the lease, but they are part of renting in Japan, and not knowing them creates friction.
How the Market Is Changing
Japan’s rental market has been moving in directions that make it more accessible, driven partly by demographic change and partly by technology.
Reikin-free properties have multiplied as vacancy rates have risen in many parts of the country. Population decline has shifted bargaining power modestly toward tenants in markets outside the major urban centers. Zero-reikin, zero-shikikin listings — once unusual — are now common enough to search for specifically.
Foreign-friendly services have expanded. Real estate agencies specializing in foreign tenants, properties explicitly marketed as accepting foreign nationals, contracts available in English, Chinese, or other languages — the infrastructure supporting non-Japanese renters has developed substantially over the past decade.
Electronic contracts arrived in full following regulatory changes in 2022, which permitted the mandatory explanatory process to be conducted online rather than in person. It is now possible in many cases to complete a rental contract without setting foot in a real estate office — a practical improvement for anyone managing a move from abroad.
What This System Reveals
The Japanese rental market’s customs — reikin above all — are a study in how practices that made sense in a particular historical moment can outlast the conditions that produced them, sustained by convention and market power long after the original logic has dissolved.
The housing shortage that made reikin a gesture of gratitude no longer exists. What remains is the expectation, maintained in markets where landlords can maintain it and abandoned where they cannot. The pattern is familiar: customs that function as frictions in the market persist where supply is tight and dissolve where it is not.
For anyone renting in Japan — especially for the first time, especially as a foreigner — the practical knowledge matters. What each cost is, what it is for, what rights a tenant has around the security deposit, and what to expect at every stage of the process makes the difference between navigating the market and being navigated by it.