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Comment by ck2 | Hacker News Reader

What is "key money" ? A bribe? Or is it security deposit?

Can you imagine them marketing a 660cc car in the USA? I'd love to have one but it will never happen.

Traditionally, when folks from the country moved to the city, they would bring 礼金 (money in return for a kindness - n.b. It is what you call paying someone to tutor you, too) to show thanks for their landlord taking them under e landlord's wing socially. In modern Japan this doesn't really happen, but traditions are durable. Prevailing norms differ by area, but it can be anywhere from nothing to, most commonly, 1 to 3 month's rent, and it is compulsory. You never receive 礼金 back. Most apartments also charge a security deposit, generally one month's rent. Custom in Japan favors the landlord heavily with regards to security deposits, for example in accepting debits against it to return the apartment to pristine condition (such as buying new tatami), so most people wouldn't expect to receive it back either. e.g. I got charged a $350 "cleaning fee" after paying for my own cleaners to make it absolutely sparkle. Their employee apologized but said it was standard practice.

Ah, so it's a "polite" bribe, heh.

Managed properties in the USA also almost always keep a security deposit and find something else to clean. So basically you are paying for their own property depreciation, they cannot lose.

When you have bad credit, it is common here to require first and last month's rent in addition to the security deposit. I thought maybe that was the equal of "key money" but now I understand.

So with the key fee @ 3 months' rent, first and last months' rent, and a security deposit, you could have to front 6 months' rent to move in!?

And still they wonder why some young people are very averse to moving out from their parents' homes (I'm not referencing hikikomoris, that's a whole another matter).

Sounds like NYC.

I don't know what you mean by "last month rent", but yes, between key money, deposit, real estate agent fee (1 month's rent), insurance and, if you're foreign, guarantor's fee, you typically pay something like 4~6 months' rent upfront.

Last month's rent means you've prepaid for the final month of your rental. In the US, if you're in a region where this is legal/accepted, when you give 30-day notice you don't owe any money for that final month.

I see. In Japan the rent is usually paid in advance anyway.

You mean last two months' rent. The two you pay in advance.

keep in mind key money its also an incentive to not bail after 3months of living there. As unlike the US you can terminate your rental agreement at any time with a 30-60day notice and dont have to pay rent until end of contract or someone else moves in.

  > dont have to pay rent until end of contract or someone
  > else moves in.

So if you give 30-60 day notice on an apartment with a contract that still has 1 year left on it, you can basically stay there rent-free until they find someone else to rent it (or until the original contract runs out)?

s/dont/only/

You only have to pay for the gap time until a new tenant moves in. Basically the renter provides vacancy insurance, not a guaranteed sum.

The market is competitive, though, and there's a lot of places offering zero-reikin (礼金), or if they don't, are willing to negotiate.

Especially if you look during the off-season when nobody is moving; for those that don't know, almost everything in Japan is seasonal, from new-graduate hiring to apartment-hunting. This is changing, but bucking the trend can save you some serious money.

You'll still have to hunt to find something good, but I'm willing to spend some evening and weekend time to save myself enough cash to purchase all new appliances.

For example, my current place took almost a month to find, but was zero-deposit, zero-reikin, and came with a free month of rent. I'm in central Tokyo, so I cough up $1300 USD/month in rent for a whopping thirty-five square meters, but the convenience is very much worth it.

For others interested, I paid one month key-money, no deposit and half a month to the rental agent. I probably could have negotiated more but was eager to move in quickly. After getting my first gas bill the last payment on the account for that unit was two years ago so the apartment was probably empty since that time. I'm not in Tokyo though.

From my experience in the Tokyo area, the cleaning/restoration fee is negotiable if: -you haven't put money down -The contract doesn't stipulate it directly -you're willing to play hardball

At our last place, we just cleaned the apartment ourselves after moving out. While moving out, we found some serious water damage underneath a bookcase that hadn't been moved for two years (probably due to the wood flooring having been installed directly on the concrete). He quoted us a price to fix it and we talked it over. My SO said we didn't really have to pay any of it, but it's usual to pay about half of what they quote. Of course, this could mean they just pre-inflate their prices by 2x.

So one should rent from a Yakuza, now that these bribes are illegal to pay.

> Can you imagine them marketing a 660cc car in the USA? I'd love to have one but it will never happen.

Sounds like a "smart" to me. According to Wikipedia you can buy one in the US.

http://en.wikipedia.org/wiki/Smart_%28automobile%29

The American version of the "smart" uses a 1000cc engine, not 660 like the European. My 15 year old car gets better mpg than the 2011 smart.

American cars need to maintain 45mph or so at a 6% grade to be allowed on many interstates. Your 15 year old car does not need to meet 2011 emissions and safety standards.

edit Also, the EPA has changed to more aggressive testing procedures over the last 15 years. What was a 45MPG car in 1990 (Toyota Tercel) is now "35MPG".

Key money is a kind of "tip" albeit a big tip -in the way of several month's worth or rent. It's separate form a deposit -which is also necessary. Foreigners can be asked for more key money than locals. Key money is negotiable --newer properties may not require key money, also vacant properties may forgo key money.

Real estate agents are not allowed to collect more than 1 month's rent as a fee. This means that the borrower's and landlord's agents will have to split the fee, each of them getting only half a month's rent. In many cases, some of the 'key money' will filter back to the agent as commission.

It's more like a broker's fee, but goes to the landlord. It isn't returned when you move out.

> Theoretically we could get some back when we move out, but based on our Tokyo experience I don't really believe we will.

That makes it sound more like a deposit that slimy landlords will find an excuse to not refund ("Ooh, look! A scratch in the shiny floor!")?

I don't know why he wrote that. Key money is not returned.

It could be that I am just totally wrong about this, as I am not the one who signed / read the rental agreement, but afaik both the Tokyo payment was and this payment is supposed to contain one month of deposit as well. For the Tokyo one we didn't get it back.

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