Security Deposit and  Key Money Rules for Renting a Room in Japan

When renting in Japan, you often need to pay SHIKIKIN and REIKIN.

Some foreign countries have rules similar to "Shikikin" and "Reikin," but some do not, so why do you have to pay them when you rent a place to live in Japan? There are cases when you may not know about it.

For this reason, let us first understand the rules of Shikikin and Reikin in Japan.

What are SHIKIKIN/REIKIN?

Shikikin/Reikin refers to money paid initially on top of the monthly rent.

SHIKIKIN（Security Deposit）

It is a security deposit.

If you are unable to pay the rent, or break something, or have to pay for cleaning when you move out, you can pay using this deposit.

Therefore, the rent will be refunded at the end of the rental period if there are no delays or damages to the property.

REIKIN（Key Money）

When you rent a room, this is the money you pay to the owner as a form of gratitude.

You may ask, "Why would I pay my landlord for gratitude when I regularly pay my rent?" you should have known that this is part of Japanese culture, and if you do not want to pay Reikin, you should look for a place that does not charge it.

How much is SHIKIKIN and REIKIN?

How much is the SHIKIKIN and REIKIN?

This also varies depending on the property, but generally it is as follows.

SHIKIKIN（Security Deposit）: 0 yen to 2 months' rent

REIKIN（Key Money）: 0 yen to 2 months' rent

For apartments and other low-cost housing, there are properties where both the SHIKIKIN and REIKIN are 0 yen.
In most apartments, SHIKIKIN is equivalent to one month's rent, and REIKIN is also equivalent to one month's rent.

REIKIN is negotiable, and sometimes it can be reduced a little, but basically, if you cannot pay REIKIN, many landlords will not approve your rental application.

 What are the other costs?

Other costs besides SHIKIKIN and REIKIN are listed below.

Expenses for renting a room (other than deposit and key money)

1. Commission Fee
2. Guarantee Deposit (Only when using a guarantee company)
3. Renewal fee

Commission Fee

An agency fee is amount of money paid to a real estate agency.

In Japan, a real estate agency will introduce you to a room, and since the real estate agency acts as an intermediary to sign a contract with the owner, you will pay a Commission Fee for the service they provide you.

Commission fees generally range from 0 yen to one month's rent.

Before having a real estate agent assists you, check to see if a commission fee is charged.

Guarantee Deposit (Only when using a guarantee company)

When renting an apartment or condominium, a "guarantor" is required.
A person who can act as a guarantor is required to be "a resident of Japan and speaks fluent Japanese".

Reasons why a guarantor is required

1. To pay in place of you when you fail to pay your rent.
2. To be your contract person in case of emergency

If you do not have a guarantor, you can choose a guarantee company.

A guarantee company is a company can act as your guarantor. The cost of using a guarantee company is 50% to 100% of the monthly rent.

Then, every year, a renewal fee of 10,000 yen or 10% to 30% of the rent is charged.

Renewal Fees

A renewal fee is mainly a two-year lease term, and if you want to live longer than that, you must "pay a renewal fee".
This renewal fee is paid in addition to the rent if you want to live in the apartment for more than two years, and is a rule that is unique to Japan.

In most cases, the renewal fee is equivalent to one month's rent.

Therefore, after two years, you must choose whether to move out or to pay the renewal fee and continue to live in the apartment.