Looking for suitable accommodation is a costly and time-consuming process. In the first of two articles, Shatadru Roy Choudhury looks at the peculiar customs that govern Japan's renting industry.



Moving house is usually one of the less pleasant experiences foreigners encounter during their stay in Tokyo. With the rules of the Japanese housing game being different to what expatriates are accustomed to back home, many foreigners have a hard time coming to terms with the extra costs and hassles involved in understanding the Japanese rental market. For those readers who think it is time to find a new place to live, here are a number of factors you will need to consider.

The guarantor
Arguably, one of the more difficult aspects of a rental contract for foreigners to fulfill. By cosigning the rental agreement, a guarantor assures the owner that rent, bills, and damages are paid for in the event that the tenant forfeits his responsibilities. If the tenant is a foreigner, it is not uncommon for the owner to ask that the guarantor can speak the tenant's native language as well as Japanese, thus enabling the owner to communicate with the tenant should the need arise. In most cases, the guarantor needs to be a Japanese national, and it is up to the tenant to find such a person.

Money, money, money...
As a general rule, the total cost incurred in entering into a rental agreement is five to six times larger than the monthly rent. In addition to paying for the first month's rent, the following expenses also need to be budgeted for.

Key money
An outdated custom that has now become an integral part of most rental contracts. At the end of the Second World War, when there was a severe shortage of housing, tenants would present landlords with extra money as a symbol of their gratitude for being given a place to stay. Today, this once voluntary act of appreciation has become the norm: New tenants moving into an apartment are expected to make a one-off payment (equivalent to one or two month's rent) directly to the owner, as a way of saying "thank you."

Agency fee
The amount that real estate agents charge (usually equivalent to one month's rent) for helping tenants find accommodation and for drawing up the rental agreement.

Deposit money
Varies in value from one to three months' rent. Under normal circumstances, the landlord holds on to this money during the tenant's stay in the apartment. While the majority of the deposit is usually returned to the tenant once he moves out, a small proportion is often withheld for cleaning rooms and for repairing broken goods.

Refurbishing costs
It is worth remembering that Japanese apartments tend to come unfurnished. A new tenant will therefore have to pay for the extra cost of turning an empty apartment into a habitable one. This usually involves buying a futon, quilt, microwave oven and a fridge.

Deciding where to live
Once you have acquired a good understanding of how the country's renting industry works, you should be in a good position to start looking for accommodation. The next step, which will be discussed in the next Money Talks column, is to develop a sound house-hunting strategy that will maximize your chances of finding an affordable but pleasant home to live in.