Rent / Lease Q&A
I received this Q&A from a magazine and I am sure they won't print the whole response so I figure I would post it on my blog. Contrast to much of the property purchase and sales subject, this is geared toward renting.
>1. What are some of the common pitfalls when foreigners rent an
>apartment in Tokyo?
1 - It can be pretty difficult working with an agent that does not speak
or understand English well. Relying on someone to translate your
housing preferences is not easy either.
2 - Another common pitfall is unfortunately, getting approved in the
application process. When the rental contract is under a foreigner's
name (and not a corporation), the application process can be quite
difficult.
3 - Securing a Japanese national for the guarantor on the lease can be a
challenge.
>2. How can these be avoided?
1 - Just imagine going over the articles in a Japanese binding contract
or other official documents. Finding an agent that knows the language
and the business can simplify things quite a bit. You won't ever have
to repeat your preferences or keep getting tours of properties that
don't even come close to your requirements either.
2 - An agency experienced with dealing with expats should not waste any
time showing properties that will not allow foreigners. A good real
estate agency should have local properties ready for any foreign clients.
3 - There are guarantor companies that can serve as a guarantor on the
rental contract for you. They generally charge 50% of a month's rent
but will take care of the job.
>3. How has the Tokyo apartment/guesthouse market changed during the
>past few years?
A few years ago, central Tokyo had many high-end luxury apartments on
the market at high occupancy rates. Many international companies paid
for these accommodations and there were many foreigners making a lot of
money that could afford these type of properties.
Now, corporate perks have disappeared, bonuses and salaries have been
slashed, and the gaijin population in Tokyo that afforded these
properties have shrank.
The many vacancies now have driven rents down, made the contract terms
more negotiable and the standard 2 months key money and deposit are not
so standard any more. This has had an impact on lower priced rental
properties.
>4. How has the recession affected the market? Is this a good thing or
>a bad thing for renters?
Please see #3. This is a wonderful thing for renters. This is not so
good for property owners wanting to lease their properties.
Properties over 200,000 yen per month have become sluggish. Interest
rates are very cheap in Japan. A property with a 250,000 yen a month
mortgage payment vs. a 250,000 yen a month rental property; most times a
Japanese person will select to purchase rather than rent if they can
secure the loan. You can purchase something MUCH nicer compared to
renting not to mention you get to keep the property when the loan is
paid off.
>5. What trends have you been noticing recently in the Tokyo
>apartment/guesthouse scene?
Please see #3 and #4.
>6. How can real estate companies provide added value to
>renters/visitors?
After service. Here at Century 21 Smica Create, we provide referrals to
moving companies that offer discounts, assistance with hooking up
utilities (gas, electricity, water), getting properly registered at the
ward office, etc.
>7. What kinds of changes do you think the market will experience
>during the next few years?
I think we will see less properties geared toward the executive expats.
If there continues to be many vacancies, market prices should come down
even further. Property owners should also become more lax with their
application process and more sensitive to negotiations.
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