What is a 礼金 (Rei-kin) and why it is often demanded in Japan

礼金（Rei-Kin)

When renting an apartment in Japan, there may have been times where you have been asked to pay  for 礼金 alongside your deposit. It may be something that you haven’t come across before moving to Japan! 礼金 is often referred to key money or gratuity money in English. For the sake of avoiding confusion, I will be referring to it as key money in this article. 

What is Key money?

One of the possible incurred costs when moving into a rental property is “key money”. Key money is money that you give to the landlord who rented you the room as a token of your appreciation. However, when you think about it, you may wonder why the customer, would be thanking the tenant.

Why is it required for many Japanese apartments?

To begin with, it is said that the custom of paying a key money was born in the time when there was a shortage of housing. It seems that people brought money as a token of gratitude to landlords who rented rooms to them despite the housing shortage.

However, the times have changed so much that we are now living in an age of excess housing. Despite this, the custom of giving money to the landlord still remains. It doesn’t make much sense, but it is said that the money is actually used as a thank you gift to real estate companies.

Is the security deposit the same as the Key money?

Similar to key money, there is also a “security deposit” that occurs as an initial expense. 

A “security deposit” is money like a guarantee that is deposited as collateral in exchange for renting a room. The rest of the money will be returned to you when you move out.

Key money, on the other hand, is money that is offered as a thank you. Once you pay it, you will not get it back. If you want to reduce the amount of key money, you have to choose a place without key money or negotiate for a discount at the time of contract.

Does any apartment complex affiliated to Whitestone require any Key money?

UR apartments affiliated to Whitestone does not take any key money, but a two month deposit fee will occur. Whitestone also provides privately owned apartment complexes, and those may demand key money!