"Key-money" and the cost of renting property in Japan

Hideki Yoshimura • June 24, 2020

Moving overseas is always a challenge, especially with different customs and cultures. Before your rent a property in Japan there is one common fee required, on top you’re your initial rent and security deposit, that you should be aware of. The payment is called "Key Money", or in Japanese "Rei-kin".

Key Money

What is Key Money?


Key money in Japan is initial payment by the lessee to the land lord/owner. The money is considered a gift to the landlord and it is NOT refundable even after the end of lease contract. 


What does Key Money cost?


The total amount set for Key-money varies from property to property and is determined by the landlord. There is no limit on the amount that can be set. Typically, Key-money can range from nothing at all to 3 months of rent, but it can sometimes go as high as the equivalent of 6 months of rent or more. It tends to be higher when the actual rent is higher or when the property is in a more popular area.



Is Key Money a requirement?


Not all rental properties require Key-money. As the decision to charge Key-money is at the discretion of the land lord, there is a little chance to negotiate the point. Landlords tend to be inflexible in this area, and it is not generally recommended to attempt negotiating this fee down, because it may negatively taint the landlord’s impression of the potential tenant causing them to choose another, more amiable, applicant for the property.

Why do we pay the Key Money? 


Key-money, “rei-kin”, literally translates to English as “gratitude money”. It is a way for tenants to offer payment as an expression of gratitude for being allowed to rent their property. There are several theories regarding how exactly this custom first began, though we do know it was once a way to secure a housing during property shortages during WW2 and the Industrialization Era. It also served as sort of insurance plan where children could be taken care of by the landlord while the parents were away from home.


In more recent times the trend has been moving away from the necessity to pay Key-money. While the current market has not eliminated Key-money all together as of yet, fewer and fewer properties are requiring the payment.

Old House Key

What are the other required initial fees?

  • Rent

    First and second month of the rent. First month rent is typically prorated by days for contracts starting in mid-month.

  • Security Deposit

    Refundable deposit that is used for restoration and cleaning. Typical practice is 0-3 months of rent.

  • Agency/Realtor Fee

    Commission for realtor/housing agent. Common practice is 1-month rent + tax.

  • Guarantor Company Fee

    Depends on the company but the common practice is 0.5-1 month of rent as initial fee or a small percentage of the monthly rent.

  • Maintenance Fee

    Fixed monthly price for the building management (E.g. Elevator maintenance, light bulb exchange, building deep cleaning, etc.)

  • Key Exchange Fee

    Fee to replace to brand new lock for house door.

  • Room Cleaning Fee

    Fixed room cleaning fee. The fee varies on the size of the property.

  • Renters Insurance

    Legally required to rent the property. About 10,000-20,000JPY every  2 years.

  • Towns Fee

    Fee to manage the public facility. (E.g. street light, sewage, cleaning, restoration from natural disaster, etc.)

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