When renting an apartment in Japan, various upfront fees—primarily "Shikikin" (security deposit) and "Reikin" (key money), alongside brokerage commissions and fire insurance—are required. Understanding the purpose of each fee and the standard market rates in advance will help you prevent unnecessary expenses and budget wisely. In this article, we provide a comprehensive breakdown of the upfront costs associated with Japanese rental agreements, and share 5 expert tips to minimize your move-in costs to the absolute limit.
Shikikin and Reikin are the two primary upfront costs deeply rooted in the history of Japanese rental agreements. The single greatest difference between the two lies in whether the money is refundable upon moving out (Shikikin) or non-refundable (Reikin).
Shikikin functions essentially as a temporary "security deposit" held by the landlord. It serves as collateral to cover unpaid rent in the event of delinquency, or to pay for cleaning and repairs (restoration costs) when you vacate the property.
Reikin literally translates to "gratitude money." It is a one-time, non-refundable gift paid to the landlord to express appreciation for allowing you to lease the property. Because this is a gratuity rather than a security deposit, it will never be refunded upon moving out.
Historically, Reikin originated during the post-WWII housing shortage when prospective tenants gave landlords monetary gifts to secure a place to live. While "zero-Reikin" properties have grown in popularity in recent years, prime properties and family-sized residences still commonly charge a Reikin of 1 to 2 months' rent.
When renting a home in Japan, there are several other expenses involved in addition to Shikikin and Reikin. In total, upfront move-in costs typically average around 4 to 6 months of monthly rent.
| Upfront Fee Item | Average Market Rate | Type & Refundability |
|---|---|---|
| Shikikin (Security Deposit) | 1 to 2 months' rent | Refundable deposit (Settled and remaining balance returned upon move-out) |
| Reikin (Key Money) | 1 to 2 months' rent | One-time gratuity fee (Non-refundable) |
| Brokerage Fee (Agency Commission) | 0.5 to 1 month's rent + tax | Service fee paid to the real estate agent (Non-refundable) |
| Advance Rent (Pre-paid Rent) | 1 month's rent (+ prorated amount for the move-in month) | Pre-payment of rent for the first full month (Non-refundable) |
| Fire Insurance Premium | 15,000 JPY to 30,000 JPY (2-year contract) | Mandatory. Covers damage caused by fires, water leaks, etc. (Non-refundable) |
| Guarantor Company Fee | 50% to 100% of monthly total rent | Initial enrollment fee for a guarantor company in lieu of a personal guarantor (Non-refundable) |
| Other Incidental Fees | 15,000 JPY to 30,000 JPY | Key exchange, sanitization services, 24/7 support membership, etc. (Non-refundable) |
Relocating is a significant financial commitment. For those wishing to minimize upfront cash requirements, our professional real estate brokers present 5 practical cost-saving strategies you can leverage during negotiations and apartment hunting.
By aligning the cancellation notice period of your current apartment (typically 1 month in advance) with the contract start date (move-in date) of the new property as closely as possible, you can minimize the period of "double rent" (paying rent for both places concurrently).
Generally, after applying for a new apartment and passing the background screening, landlords allow a grace period of about 2 to 3 weeks before the official contract (rent start date) begins. Smartly scheduling your move-out and move-in dates can easily save you tens of thousands of yen in unnecessary overlapping rent expenses.
For highly popular properties where the upfront fees themselves cannot be negotiated, you can still manage your cash flow by choosing a flexible payment method to avoid a sudden large outflow of cash.
An increasing number of properties now allow you to pay all or part of your upfront costs with a credit card. Credit card payments let you defer the actual payout, split the transaction into installments, or convert it to revolving payments (depending on your card issuer's terms). Additionally, making a large transaction worth several hundred thousand yen allows you to earn substantial card reward points, making it highly advantageous.
Q. What is the difference between Shikikin and Reikin?
A. Shikikin is a temporary "security deposit" paid to the landlord to cover restoration or cleaning costs when moving out. The remaining balance after repairs is, in principle, refunded to you. Reikin is "key money"—a traditional, non-refundable gift to the landlord expressing appreciation for renting the room, and it is never refunded upon move-out.
Q. What are the standard upfront move-in costs for renting in Japan?
A. As a general guide, upfront costs range from 4 to 6 months of rent. For example, if you rent an apartment for 60,000 JPY per month, assuming both Shikikin and Reikin are set to 1 month's rent, adding advance rent, agency commission, guarantor company fees, fire insurance, and key exchange will bring the total upfront cost to around 300,000 JPY to 400,000 JPY.
Q. Why does the Shikikin (deposit) increase if I keep a pet?
A. Keeping pets (such as dogs or cats) indoors drastically increases the likelihood of persistent odors in the wallpaper or scratches and chew marks on doors and walls. This significantly raises cleaning and repair costs upon moving out. To guarantee these expenses are covered, landlords typically require an additional 1 to 2 months' rent for the Shikikin deposit when you sign the pet-agreement lease.
Q. What should I do if my Shikikin is not returned, or if I am charged an excessive cleaning fee upon moving out?
A. Carefully examine the detailed breakdown of the invoice based on the Ministry of Land, Infrastructure, Transport and Tourism's "Guidelines for Restoration and Prevention of Troubles." In principle, natural wear and tear from normal use is the landlord's responsibility. If you notice any unjustified charges (such as repairs for pre-existing wear), request a reduction from the property management company or landlord. As the most powerful safeguard, we strongly recommend taking detailed, date-stamped photographs of any existing scratches or blemishes when you first move in.
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