Renting through your company
Table of Contents
Renting through your company
Advantages and Disadvantages of renting though your company
Starting Costs
Rental Flowchart
Before you contact any local agent make sure to find out whether you are allowed to work with a brokerage company that is not appointed by your company. Sometimes your company will not allow you to work with an outside agent and finding this out later may be unpleasant for all parties.
Advantages and Disadvantages of renting through your company
Advantages
Unlike renting on your own, you may not be required to speak Japanese at all, since your company can be a point of contact. Your only task is basically to find a property you like and just let your agent and your company administrator handle the rest of the rental procedure.
Who pays your initial contract fee will differ in each individual case but normally the rent is paid under the company’s name, and usually the paid rent is deducted from your paycheck.
In the grand scheme of things, landlords prefer leasing properties to corporations as they have less worry about rent not being paid or rent not coming on time, but some owners may say “no” to company contracts as leases can end abruptly due to personnel relocation.
Disadvantages
If there is a property you wish to rent that is owned by a non-resident of Japan, your company may not allow it. When the owner of the property is a non-resident (非居住者 He-kyo-jusha), the renter is obliged to pay withholding tax (源泉徴収税 Gensen-choshu-zei) on behalf of the owner. Each month your accounting department will have to pay 79.79% of the rent to the owner’s account and the other 20.21% to the local tax office, and this is deemed burdensome as it needs to be done every month. So, especially with big corporations they will say “no” to this type of property.
Some corporations have other rules that they’re not willing to bend so it is best to check what they are before initiating your property search with your agent.
Starting Costs
Approximately 4 - 6 months' rent
Deposit (1 or 2 months' rent)
Key money (1 month's rent or none)
First month’s rent pro-rated and next month's full rent
Guarantor company fee (0.5 -1 month's rent which is a one-time payment)
Housing insurance premium 15,000 - 25,000 yen (for 2 years)
Agency fee (1 month’s rent + tax)
Below costs may apply additionally
Lock change fee 12,000 - 35,000 yen
24-hour support service 10,000 - 15,000 yen
Sanitization fee 5,000 - 12,000 yen
Contract processing fee 5,000 - 10,000 yen
*Check with your company on which payment items they will shoulder.
Deposit
Usually, you need to pay 1 or 2 months of your rent as deposit. You will receive back this deposit at the end of your lease, after cleaning fee and repair fees are appropriated. If you did not make any new damages during your rental term then only the cleaning fee will be deducted and the rest returned.
Please note at times there may be a special clause in the lease saying that the deposit will not be refunded. In that case, the landlord will use the deposit to clean your room and to fix damages, and keep any balance. Keep in mind though if your repair fees exceed the deposit the landlord will ask you to pay the difference.
Key Money
Usually, you need to pay 1-month worth of key money at most and sometimes none is asked for. This fee is non-refundable and the money just goes in to the landlord’s pocket.
Upfront Rent
In most cases the landlord will charge you the prorated rent of the first month and the full rent of the next month. If your contract starts before the 10th day of the month, the landlord may hold back from charging you for the next months’ rent.
Guarantor Fee
The guarantor company (保証会社 Hosho-kaisha) is always selected by the landlord and you cannot choose freely. The guarantor fee is anywhere between 30 – 100% of the monthly rent which is a one-time payment. There’s usually an annual renewal fee of 10,000 – 12,000 yen, or in lieu of that, a monthly guarantor fee of a few percents of the monthly rent.
If the company you work for is a public company, the landlord will not usually require any guarantor company or a guarantor. However, the landlord will always require an emergency contact person who can be reached at all times.
Housing Insurance Premium
The insurance company is always selected by the landlord and a fixed plan is usually prepared. The premium will range between 15,000 – 30,000 yen depending on your household structure.
The insurance covers any damages to you household belongings caused by natural calamity, theft, water exposure from plumbing troubles, and even when you break your own personal items while cleaning your room. It also has a landlord and third-party liability coverage which covers any damages you may inflict on others.
Most insurance plans proposed from landlords do not include earthquake coverage which may come as a surprise to most people knowing that Japan is a country of earthquakes. However, it is also a fact that it would need to be one large earthquake to significantly damage any of your personal belongings. Furthermore, since the earthquake insurance pays out only a low percentage of the value of your items, most people don’t bothered to be covered.
Agency Fee
Agency fee is usually 1 month of the rent which does not include management fee in the calculation, plus consumer tax.
Other Small Fees
(please note that these fees may or may not arise)
Lock change fee: 10,000 – 30,000 yen
24-hour support service fee: 12,000 – 15,000 yen
Sanitization fee: 5,000 – 12,000 yen
Contract processing fee: 5,000 – 10,000 yen
Rental Flow chart
1. Check with your company to confirm their housing policies and also determine which agent you are allowed to work with
2. Contact an agent and start your property search
3. Tour and apply for an apartment
4. Once your application is accepted, the agent will explain the important matters of the contract to you, and your company will stamp the contract
5. Arrange for utility and internet services
6. Start buying furniture and appliances
7. Receive keys and move in
Check with your company to confirm their housing policies and also determine which agent you are allowed to work with
Before starting your search, check if there are any rental conditions your company does not approve of and whether your company has appointed an exclusive brokerage company for you to work with.
Contact an agent and start your property search
Inform your agent of your criteria and initiate your property search.
Tour and apply for an apartment
Tour candidate properties and once you have found the right place, let the agent know to make an application for the property before it is taken by others. The rule of thumb for rental applications is first-come-first-serve and whoever submits the application first has priority to rent the property. Make sure to inform your agent about anything you want to negotiate on and this should be mentioned at the beginning and not in the middle of the application process.
For the application, your agent will need you to inform your company that you have found a property you like and you want them to process the rental application, plus, your agent will need the front and back copies of your residence card.
Once your application is accepted, the agent will explain the important matters of the contract to you, and your company will stamp the contract.
Once the application is accepted from the property landlord the contract papers will be sent to your company to be stamped. Any important information or rules that you should know from the contract will be explained by your agent.
Arrange for utility and internet services
Arranging for utility services can be guided by your agent, and if you need internet connection at home you should start contacting the internet provider of the property early. Setting up an internet connection could take weeks as you may need your internet company to install internet lines to your room for the first time.
Start buying furniture and appliances
You will have to buy your own furniture and appliances as most apartments/houses will not come with them. They are usually equipped with only air conditioner, cook stove, and light fixtures. I have seen people having to wait weeks to get their furniture delivered so it would be best to start shopping right after your application has been accepted.
Receive keys and move in
Receive the keys and move in. Within 7 – 10 days of your entry you will need to hand in a report of any damages that existed when you entered the property. Handing in this report can protect you from being charged for damages that you did not make. Even if the landlord does not require you to hand in pictures, you should take them anyway for your own sake.