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Finding, Buying and Renting for Expats in Japan

Author: Jim Newham
Submitted: August 2014

Accommodation in Japan is divided into four types: the apato, anapartment in an older, often wooden building; the manshon or ‘mansion’, which is actually not a mansion at all but a modern apartment in a high-rise concrete building; the ikkodate, usually a detached house; and the guest house or gaijin (foreigner) house. Rooms in all of these accommodation types are usually smaller than those in other countries. Newer, more central properties that are near train stations are the most desirable, and are therefore more expensive than those elsewhere.

Finding Property

The internet is an invaluable tool for searching for property while still in your home country and after you have emigrated. Some popular accommodation websites are given below:

There are many other sites, but they are in Japanese only. A word of warning: do not use online translation tools to translate these Japanese sites, as the ‘translation’ will in fact be comical nonsense. Once you have arrived in Japan, if you can read Japanese, you will be able to look in local newspapers, read bulletin boards on the streets and in supermarkets and walk around suitable areas looking for available properties.

However, if you are struggling with reading Japanese (nothing to be ashamed of), you will need to rely more on bilingual estate agents. In Japan, estate agents facilitate the house-hunting process by looking for properties, arranging viewings and negotiating with the landlord or owner on your behalf. Furthermore, they are necessary during the property purchase process.

Renting

Renting property tends to be expensive in Japan, especially in Tokyo. Most property available for rent is rented out via estate agents rather than directly with landlords. Most expats find renting a gaijin house to be the most suitable type of start-up accommodation. This is because these properties are widely available, incur a minimal deposit and allow flexible periods of tenancy.

Bear in mind that most rented property is unfurnished; this may mean that the property has no fittings at all; the remaining properties are partly furnished with fittings and white goods or fully furnished. Utility bills are not normally included.

Renting a property long-term works out cheaper than staying in a gaijin house but has its difficulties. Firstly, some landlords are reluctant to let out to foreigners. This may simply be down to prejudice, otherwise it is because many expats cannot speak Japanese or are only in Japan for a short term. Secondly, you are very likely to need to find a guarantor before you are able to rent a property. This guarantor will be responsible for any rental arrears or damages you incur. It is possible to use the same person who sponsored your visa, such as your employer.

Thirdly, the initial outlay for renting property is usually very high. In addition to the standard one month’s rent in advance, you may find yourself paying:

  • security deposit of two month’s rent (ostensibly refundable, but in practice not all may be returned)
  • estate agent’s fee of one month’s rent
  • reikin or key money (in Tokyo and some other areas) of 1-3 month’s rent. As this is non-refundable, it is essentially money for old rope.

This means that you will have to pay six months’ rent or more before you have even moved in. You may also be charged application and management fees, and be obliged to take out insurance. Before signing the contract, you will need to provide proof of identity, residence and income. The typical tenancy period is long, at around two years. Renewal of the tenancy agreement after this time may involve further fees, and more paperwork.

Buying property

After a price crash during the global recession, Japanese property prices are on the rise again. Many expats find house prices too high, though there are no formal restrictions on foreigners buying property in Japan. However, obtaining a mortgage from a Japanese lender will be very difficult if you do not hold permanent residence status, so it may take some time to find an amenable lender. You may need to get a pre-approved mortgage before the purchase can go ahead.

As they are legally required for part of the process anyway, it is recommended that you use an estate agent to help you look for a property to buy. Be aware that it may take some time to find an estate agent who is willing to work with foreigners.

After your offer on your intended property has been accepted, your estate agent can help to negotiate the drawing up of a contract of sale. Once this is drawn up and signed, you will normally have to pay a 10% deposit. Then your estate agent (or lawyer, if you have one) will check contractual matters and for impediments such as existing mortgages. If there is nothing outstanding, you pay the rest of the down payment and the sale can be closed. If you are buying the property using a mortgage, the transfer of property will probably be held at one of the lender’s branches. Transfer of ownership must be performed by a legal scrivener.

Note that owning a property in Japan does not help you to become a Japanese citizen.

 

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