Real estateHow Much, On Average, Did Japanese Tenants Pay For Key Money In 2019?

6806 min

Tokyu Housing Lease Co., Ltd., jointly with Diamond Media Co., Ltd. on January 27, surveyed leasing contracts for leased condominiums nationwide in 2019 regarding lump-sum payments (security deposits, key money, and renewal fees) and published the results. Basically, shikikin (敷金) can be thought of as a “security deposit.” Often, the tenant does not get all (or even any) of it back, even if he/she took good care of the property. “Reikin” (礼金, literally “thanks money”) is money in exchange for the landlord allowing the tenant to rent the property! Traditionally, these various lump-sum payments combined are one or two months’ rent, and are a major source of income for landlords of Japanese real estate. Tokyo Housing Lease Co., Ltd. and Diamond Media Co., Ltd. utilized the survey function of the rent assessment system “Smart Rent Assessment” provided by Diamond Media. They analyzed about 6.8 million tenants’ data records on the Internet, and came up with information about lump-sum payments (excluding rent). The survey period was from January 1 to December 31, 2019.

The national average of shikikin (remember, “security deposit”) payments was 0.72 months’ worth of rent (e.g. if the rent is ¥100,000 a month, then the shikikin would be ¥72,000 yen). Having no shikikin accounted for 44.6% of the total, and when they excluded those, the average shikikin payment was 1.30 months’ worth of rent. The largest number was in Hiroshima Prefecture at 1.96 months’ worth of rent, and the smallest was in Osaka prefecture at 0.23 months’ worth of rent. There was no significant change compared to the previous year nationwide, and the Kinki Region (which includes Osaka, Kyoto, Nara, Kobe, etc.) was generally low. In the Kinki Region, business practices have changed from shikikin to reikin. In addition, the spread of guarantee companies has reduced the risk of delinquencies, and shikikin has been stable.

The national average of reikin (remember, “key money/thanks money”) was 0.51 months’ worth of rent. The ratio of zero-reikin properties was 45.5% of the total, and when they excluded those, the average was 0.92 months’ worth of rent. In the Kinki Region, key money was set higher than the national average, while Hyogo Prefecture, the top prefecture, had an average reikin of 1.23 months’ worth of rent. On the other hand, the lowest key money was in Osaka (0.23 months’ worth of rent).

The national average renewal fee is 0.35 months. The rate of properties that have zero renewal fees was 61.5%; excluding those, the properties that have renewal fees average renewal fees of 0.91 months’ worth of rent.

The top is 0.71 months in Tokyo. Tokyo landlords must be loving that. The lowest renewal fee was for 0.01 months’ worth in Hokkaido. Overall, the analysis is based on the fact that the Kanto Region is expensive, there is demand for rental housing, and even if renewal fees are set, it is competitive, so many properties are recruiting with conventional renewal fees.

In summary, the institutions of “key money,” “security desposits,”and “renewal fees” are still going strong. Landlords can derive extensive income not only from rent and capital appreciation, but also from hundreds of thousands of yen of these lump-sum fees, from each tenant! The tenants generally accept the situation as “shōganai” and pay up. There is more information about key money, etc. here: