From searching to contract signing
While searching for a place to live, there are many things you should know and many things you would benefit greatly from knowing. Let’s go over those points!
Basic knowledge for apartment searching
１．Decide on your budget and priorities
It’s best to decide on what’s important to you while house hunting.
Finding a place that checks all of the points off your list can be very difficult, so prioritizing your preferences can help narrow down listings and find the best fitting place for you.
(1) First of all, let’s figure out what the maximum budget you are willing and able to pay per month.
Usually, it is considered best for your monthly rent payment not to exceed 30% of your monthly income.
(2) Next, we should decide what kind of amenities you want to prioritize that is reasonable within your price range.
For example, you may want to put importance on your commute time to work or school, or instead, you may want to prioritize a better area but be slightly farther away.
Or for example, deciding between an older but more spacious building and a newer but more compact living space. You may want to consider other points like having a separate bath and toilet as well, to help narrow down search results for a more efficient house hunting process.
２．Research the price range of your desired area
When searching for a place to live, it’s important to not only decide on your budget, but also to become familiar with the market values of your target area.
The price range of properties will vary by area. For example, if you’re searching for a \50,000~ one-room apartment in an area where those apartments usually go for \70,000~, you are unlikely to have many options, if at all. In that case, you may want to reevaluate the priorities you decided on, or search in a different area. Additionally, from February to April, as well as in September, are the busiest times of the year in the real estate industry, and that is reflected in the prices as well.
Effective ways of gathering information
１．The internet or real estate magazines
Looking online is one of the fastest and most efficient ways of gathering information as well as getting yourself familiarized with the price ranges of each area you’re looking in.
Printed real estate marketing materials often include properties that have already been leased.
This is because the information printed is researched 1-2 weeks in advance.
However it is still beneficial to take a look at these booklets to get yourself familiar with the price range of the area you’re looking to live in.
２．Leasing information from real estate companies
Real estate companies share information in two different ways.
One is through the internet or printed marketing material, aimed at consumers.
The second is through the real estate network, aimed at fellow real estate companies and agents.
This information is usually not accessible to the public, but if you go to a real estate office, the agent in charge can show you those properties.
１．An application is not a contract
If you look at a property and find it to your liking, you will then submit an application for that property.
It varies by realtor, but usually you would fill out information such as your address, name, age, occupation, and income.
The application is to indicate that you are interested in renting the property and not a formal contract.
You are able to cancel the application after submitting it if you wish to do so. Please confirm this before submitting.
However, please be sure and confirm all the details with the real estate agent you’re working with before submitting an application.
２．There are cases where applicants do not pass the review
The landlord or management company will review the applications and decide whether they will allow that person to lease their property.
This is called the “applicant review” (入居審査, nyukyo shinsa) and takes about one week.
There are some cases where applicants are not approved.
From the perspective of the owner, they are renting out their property to someone, so they will consider people who have stable income and those who are more likely to follow all the rules.
３．Regarding the holding fee
Sometimes, the realtor will have you pay a fee up to one month’s rent to hold the property for you after you’ve submitted your application.
This is usually called the “holding fee” (預かり金, azukari-kin) or the “application fee” (申込金, moushikomi-kin).
A holding fee is yet another way to appeal your intention to rent the property and nothing more.
Nothing is guaranteed until a contract is officially established.
The money will be returned if it falls through, so please be sure to get a receipt when you make the payment.
If a contract is established, this money will generally be counted towards your initial payment.
When signing a contract
Documents to prepare are as follows.
(A) is required for every contract, (B) is required depending on circumstance.
(different documents will be required for corporation contracts)
(A) Certificate of residence (住民票, juminhyo)・Proof of income
(B) Guarantor’s certificate of official registration of seal (印鑑証明書, inkan shoumeisho)
This is the standard payment required up front within the Greater Tokyo Area
●Key money (礼金, rei-kin)…0~2 month’s rent
●Deposit (敷金, shiki-kin)…1~3 month’s rent
●Agent fee (仲介手数料, chukai tesuryo)…0~1.08 month’s rent (tax incl.)
●First month’s rent…1 month’s rent + management fees
●Insurance fee…around \10,000 ~ \20,000
(3) Prepare the certificate of residence
Normally the person moving into the property would need to provide their certificate of residence.
Once the contract date is set in stone, it’s best to get this ready as soon as possible for not just the contract signor but for every person to reside in the property.
A certificate of residency can be obtained from your ward or city office.
(4) Prepare the proof of income
There are cases where a proof of income is required.
Please check with your realtor on whether this is necessary.
For office salary employees, this is usually the annual statement of earnings (源泉徴収票, gensen choshuhyo) your company will issue you. However, in certain cases, your monthly pay statement will suffice.
In addition, if you are self-employed, a copy of the "decision report" and "tax payment certificate" which are issued by taxation office will be required.
(5) Prepare a guarantee letter from the guarantor
The guarantee letter is a statement from the guarantor to promise to pay in the resident’s state in case the residence fails to pay.
Depending on the realtor, the format and terminology used may vary.
There are many different terms used for this document but the content is the same.
Regardless, this is the guarantor’s promise to take responsibility for the resident.
This will require the guarantor’s seal.
Let’s do our best to get this ready before the contract date.