Key Money In Japan And More: The Best Guide for Foreigners

Key money (礼金, reikin) is a non-refundable payment made to a landlord in Japan at the start of a rental contract. It is typically equivalent to one to two months of rent and is never returned, regardless of how long you stay or what condition you leave the property in.

It has no equivalent in most Western rental markets and is one of the most significant upfront costs of renting in Japan.

Understanding key money, how it compares to a security deposit, and how to find properties that do not require it can save you hundreds of thousands of yen when moving to Japan.

Understanding key money in Japan

What is key money?

In Japan, key money is a one-time, non-refundable fee paid to landlords. The amount varies, but key money is typically equivalent to one to two months of rent. In rare cases involving highly sought-after properties in central Tokyo, Kyoto, or Osaka, it can occasionally be higher. Reikin-free rentals are increasingly common, particularly in older buildings, suburban areas, and properties that have been vacant for some time.

In Japanese it is called reikin (礼金), which translates to gratitude money. It acts as a thank-you gesture for letting you stay there.

Is key money negotiable?

The tenant or the real estate agent can attempt to negotiate the key money amount. However, the landlord has the final say.

And if multiple potential tenants want to stay at their property, the landlord will go for those likely to pay key money.

Do you get key money back in Japan?

This fee is not returned at the end of your leasing contract.

Is key money legal in Japan?

While it may not be common in your home country, key money is a regular practice in Japanese real estate. It is widely accepted and understood among the local population. 

There are a couple of things to note. For one, it is most commonly charged in high-demand urban areas such as Tokyo, Kyoto, and Osaka. The Urban Renaissance Agency (UR), a semi-public institution that manages a large number of rental units across Japan, does not charge key money or renewal fees, making its properties a popular alternative for budget-conscious renters.

And two, key money is not required for many places, and its prevalence varies significantly by region. As of 2024, approximately 54.5% of Tokyo properties still charge key money. By contrast, key money is rare or non-existent in Hokkaido, Okinawa, and parts of Tohoku including Aomori and Akita, as well as in Fukuoka.

Even within Tokyo, older buildings, suburban locations, and properties that have been vacant for several months are less likely to require it. Many real estate websites let you filter out properties that charge key money by using the search term 礼金なし (reikin nashi).

How key money affects renters in Japan

Having an extra one to two months of rent as a non-refundable payment is a significant financial burden, especially on top of the other upfront costs involved in renting in Japan.

It is also worth understanding how key money differs from the security deposit, as the two are frequently confused.

• Key money (reikin) is paid directly to the landlord as a gift and is never returned under any circumstances.

• The security deposit (shikikin) is held by the landlord as insurance against damage or unpaid rent, and the remaining balance is returned to the tenant after moving out.

In practice, the distinction matters because no amount of good behaviour, property maintenance, or length of tenancy will result in reikin being refunded. Shikikin, by contrast, should be substantially returned if you leave the property in good condition.

Many renters will use real estate agents in Japan to negotiate key money and other costs down to keep your total moving cost low.

Many properties do not require key money at all. These reikin-free properties still typically require a security deposit and a monthly maintenance fee, but eliminating key money alone can save one to two months of rent at the time of signing.

Other Japanese apartment fees to know

Looking for an apartment or housing in Japan can be difficult when you are unfamiliar with the Japanese terms.

It also helps to understand the full picture before you start searching.

When all upfront costs are added together including key money, security deposit, agency fee, guarantor fee, fire insurance, and the first month's rent, the total typically comes to four to six months of rent paid before moving in. On a 100,000 yen per month apartment, that means budgeting between 400,000 and 600,000 yen upfront. Here are the most common fees you will encounter.

a. Maintenance fee (管理費, kanrihi)

This monthly fee covers the general maintenance and upkeep of the common areas of the building. The cost usually depends on the property itself. It will be generally higher with properties with more facilities, such as a gym or mailing room.

While you can not avoid maintenance fees, you can add a search filter 管理費・共益費込み that will show you the total price of properties.

b. Security deposit (敷金, shikikin) 

Unlike key money, the security deposit is a concept familiar to most renters worldwide. The key difference in Japan is that unlike reikin, shikikin is refundable when you move out, minus any deductions for tenant-caused damage.

A security deposit, about one to two months of rent, covers any potential damage to the property. Any damages to the property will be deducted from the security deposit. You will receive the remaining cost once you have completely moved out.

You can filter out properties that require a security deposit by clicking 敷金・保証金なし.

c. Guarantor fee (保証料, hoshōryō): 

Many landlords require guarantors to be co-signers to rental agreement properties. As a guarantor, that person will be responsible for the rent payment if the tenant can not pay it.

Despite the common belief that only foreigners need guarantors, many properties require young Japanese people to have guarantors. The difference is that many Japanese people will use their parents as co-signers, while foreigners will have difficulty finding one.

Depending on the situation, the real estate company assigns you a guarantor company, or you need to apply for one yourself. The initial guarantor company fee is typically 50% to 100% of one month's rent, paid upfront at signing. Most guarantor companies also charge an annual renewal fee of around 10,000 yen when your lease renews. Note that many properties in Tokyo have moved away from charging a separate guarantor fee, with some management companies absorbing the cost, so it is worth confirming whether this fee applies before signing.

To avoid this additional fee, you can filter out properties with the term 保証人不要 (hoshōnin fuyō).

d. Real estate agent fee (仲介手数料, chūkai tesūryō): 

When using a real estate agent, there might be an agency fee that you will need to pay. This fee compensates the agent’s services for finding and closing the deal for the apartment for you.

It is typically between half a month and one full month of rent, plus 10% consumption tax. By law, agencies cannot charge more than one month's rent plus tax. Some foreigner-friendly agencies run promotional campaigns offering half-month fees on select properties, so it is worth comparing agencies before committing.

e. Renewal fee (更新料, kōshinryō): 

Many rental agreements in Japan are usually for two years. To renew your lease, tenants in Tokyo and the Kanto region are commonly charged a renewal fee of about one month of rent.

This practice varies significantly by region. In Osaka, renewal fees are less common, and in some areas outside major urban centres, landlords do not charge them at all. The Urban Renaissance Agency does not charge renewal fees. If minimising long-term costs matters to you, searching for properties marked 更新料なし (koushinryou nashi) will filter out listings that include renewal fees.

f. Fire insurance (火災保険, kasai hoken)

All tenants are required to purchase fire insurance for their apartments.

Despite the name, it typically covers more than fire damage, including water leaks, damage to a neighbour's property from overflows, and personal liability.

A standard two-year policy for an apartment costs approximately 15,000 to 20,000 yen, though premiums increased by an average of 13% nationwide in October 2024 due to rising natural disaster payouts and construction costs, so current rates may be slightly higher.

The policy is usually arranged at the time of signing and renews when your lease renews. Some landlords specify a required insurance provider, while others allow you to choose your own.

g. Lock exchange fee (鍵交換費用, kagi kokan hiyou)

Most landlords require the locks to be replaced when a new tenant moves in, and this cost is passed to the incoming tenant. The fee typically ranges from 10,000 to 30,000 yen depending on the type of lock. This fee is standard practice across Japan and is generally non-negotiable.

Frequently asked questions

Do all apartments in Japan require key money?

No. Many properties in Japan do not require key money. As of 2024, approximately 54.5% of Tokyo properties still charge reikin, meaning nearly half do not. Key money is rare or non-existent in Hokkaido, Okinawa, and parts of Tohoku and Fukuoka. Even within Tokyo, older buildings, suburban locations, and apartments that have been vacant for several months are less likely to require key money. You can search for reikin-free rental housing using the Japanese search term 礼金なし (reikin nashi) on most real estate websites.

How much does key money cost in Japan?

Key money in Japan is typically equivalent to one to two months of rent, paid upfront at the time of signing. On an apartment with a monthly rent of 100,000 yen, key money alone could cost between 100,000 and 200,000 yen. In highly sought-after properties in central Tokyo, Kyoto, or Osaka, key money can occasionally be higher. When combined with a security deposit, agency fee, guarantor fee, fire insurance, and the first month's rent, total upfront costs when moving in to a Japanese apartment typically come to four to six months of rent.

What is the difference between key money and a security deposit in Japan?

Key money (reikin, 礼金) and security deposits (shikikin, 敷金) are both paid to the landlord at the start of a rental agreement, but they serve completely different purposes. Key money is a non-refundable gift to the landlord with no practical function for the tenant. A security deposit is held as insurance against damage or unpaid rent and the remaining balance is returned to the tenant after moving out. In Japan, both fees are often charged on the same property, so renters may pay one to two months of rent as key money and another one to two months as a security deposit at signing.

What other fees should I expect when renting an apartment in Japan?

Key money is one of several upfront fees when renting in Japan. A security deposit of one to two months of rent is commonly required and is partially refundable. A real estate agency fee of up to one month of rent plus 10% consumption tax applies when using an agent. A guarantor fee of 50% to 100% of one month of rent may be charged if you use a guarantor company. Fire insurance for a two-year policy costs approximately 15,000 to 20,000 yen and is legally required. A lock exchange fee of 10,000 to 30,000 yen is standard when a new tenant moves in. A renewal fee of around one month of rent may apply in Tokyo and the Kanto region when your two-year lease renews.

Is key money refundable in Japan?

No. Key money is a non-refundable fee and is treated as a gift to the landlord from the moment it is paid. It is not a security deposit and cannot be applied to any repairs, cleaning costs, or unpaid rent when you move out. Even if you leave the apartment in perfect condition, paying key money does not result in any refund. This is the most important distinction between key money and a security deposit, which is refundable in Japan after legitimate deductions.

Can you avoid paying key money in Japan?

Yes. There are several ways to avoid paying key money in Japan. If you are searching for apartments, filtering for 礼金なし (reikin nashi) properties will show you rental housing that does not require reikin. The Urban Renaissance Agency (UR), a semi-public institution that manages a large number of rental properties across Japan, does not charge key money or renewal fees. Real estate agents who specialize in foreigner-friendly properties are often able to identify no key money apartments more efficiently. You can also negotiate directly with the landlord, particularly if the property has been vacant for some time or if you are willing to sign a longer lease.

In closing

Renting in Japan involves more upfront costs than most Western countries, but none of them are unavoidable in full. Key money can often be negotiated or filtered out entirely using 礼金なし. Renewal fees and guarantor fees vary by property and region and can be avoided with the right search terms. The Urban Renaissance Agency offers properties with no key money and no renewal fees. Understanding each fee before you start searching puts you in a significantly stronger position to negotiate, budget accurately, and find a property that works for your situation.