Well, it’s basically official now. I’m in the process of switching jobs and countries. In fact I’m headed from China to Japan. Right now I am working on finding a place to live in Japan. I think I’ve settled on a place and am now just waiting for the owner to approve me. Renting an apartment in Japan involves jumping through quite a few hoops when done privately (as opposed to your company making the rental contract) and is very expensive.
First I have to have a guarantor. And not just any guarantor but one with a certain level of income, work history, etc. Now if the owner didn’t take a big deposit I might understand but the standard in Japan is two months rent as a deposit in advance. And the owner can set whatever standards they want for the guarantor. In my case a monthly income of at least 3 times the rent. I understand this kind of standard for the renter, but for both the renter and also the guarantor plus taking a fat deposit seems a little much to me. So in my case I ended up having to use a private guarantor company since my friends are either foreigners (owners don’t like that) or aren’t up to snuff in terms of income.
Next is the initial cash investment involved. For the privilege of renting an apartment it is quite common in Japan that you have to pay 2 months of rent up front as “key money”. This is basically just profit for the owner for allowing you the privilege of paying them rent every month for years to come. You’re welcome!
In total, just to get the keys to a new place in Tokyo, I have to pay in cash 2 months rent as deposit, 2 months rent as “key money”, 1 month rent fee to the real estate agent, 1 month rent in advance and 1/2 month rent for the guarantor company. In my case that’s well over the $10,000 mark – cold cash. Ouch! (And no, I am not living in some kind of fancy palace – it’s a nice modern place but half of the size of my current place.)
Fortunately there are places now a days that don’t require “key money” but from my search this time I learned that basically the standard hasn’t changed in many, many places. I really think this is a silly system. I guess in tight markets like Tokyo and New York owners can get away with having high demands because basically people (including myself) end up just paying. I understand from a recent NY Times article that in New York most owners require a person to have an annual income 40 times the monthly rent. As the average rent is over $2,500 you can see that the “average” renter has have a much above average paying job.
If you then think about buying furniture and appliances (see my earlier post) then I’m talking about an initial investment of easily over $20,000 just to rent and place to live and furnish it. Makes me wish on I was on the corporate expat gravy train still. Welcome back to reality and welcome back to Tokyo!