Lease contracts in Japan involve distinctive costs known as the security deposit (shikikin), key money (reikin), and renewal fee (kōshinryō). Each has a different nature — whether it's refunded and the typical amount both differ — so understanding what each one means makes it much easier to estimate your initial costs.
- The security deposit is essentially a deposit held by the landlord, applied toward restoration costs when you move out.
- Key money is a payment to the landlord as a token of thanks, and it isn't refunded.
- A renewal fee is charged when you renew your contract, and in the Kanto region it's commonly around one month's rent.
- Initial costs also include things like advance rent, agency commission, and fire insurance premiums.
- When comparing properties, it's important to look at the total initial cost, not just the rent amount.
What Is the Security Deposit?
The security deposit (shikikin) is money you hand over to the landlord when signing the contract. If restoration costs come up when you move out, they're deducted from this deposit, and whatever remains is returned to you. The general principle is that the landlord covers wear and tear from normal use and deterioration over time, while the amount deducted changes if there's damage caused intentionally or through negligence. It's worth understanding that this cost is, at its core, a deposit held on your behalf.
What Is Key Money?
Key money (reikin) is a payment made to the landlord as a token of thanks, and unlike the security deposit, it is not refunded when you move out. As a guideline, it runs about 0–2 months' rent, though many properties don't charge key money at all. Checking whether key money applies and how much it is before signing makes it easier to get a clear picture of your total initial costs.
What Is the Renewal Fee?
The renewal fee (kōshinryō) is a cost charged when you renew your lease. In the Kanto region, it tends to run around one month's rent, though the amount and whether it applies at all depend on the terms of the contract. Some contracts don't charge a renewal fee at all, so it's important to check the renewal conditions written into your contract in advance.
Other Initial Costs
Besides the security deposit and key money, various other initial costs come up when signing a lease. Typical examples include a prorated amount for your move-in month plus advance rent for the following month, the agency commission, fire insurance premiums, and — if you use a guarantor company — an initial guarantee fee. Add these all up, and the total commonly comes to a few months' worth of rent.
Getting a Feel for the Total Cost
When comparing properties, it's important not to judge based on rent alone, but to compare the total initial cost — including the security deposit, key money, renewal fee, agency commission, and guarantee fee. Even properties with the same rent can require very different amounts upfront depending on how these costs break down. When you receive a quote, it's worth reviewing the breakdown and typical range for each cost as you consider your options.
Frequently Asked Questions
Will I always get my security deposit back?
You get back whatever remains after restoration costs are deducted, excluding normal wear and tear or deterioration over time. If there's damage caused intentionally or through negligence, the amount deducted changes.
Does key money apply to every property?
It varies by property, and some properties don't charge key money at all. As a guideline, it's about 0–2 months' rent.
Does a renewal fee always apply?
It depends on the contract. Many contracts do charge a renewal fee, but check your contract for the amount and whether it applies.
Summary
The security deposit, key money, and renewal fee are costs unique to renting in Japan. The security deposit works like a deposit, and whatever remains after restoration costs are deducted is returned to you. Key money is a non-refundable payment made as a token of thanks, and the renewal fee is charged when you renew your contract. Understanding what each one means and what to expect, and planning around your total initial costs, will help you search for a room with peace of mind.