When you start living alone or move to a new place, rent is a major factor in deciding on a property.
There are many criteria to consider, including personal financial circumstances and non-negotiable preferences, but it is very important to know the average rent that corresponds to your income, which is directly related to your daily life.
This time, we will explain the average rental prices and the initial costs involved when moving.
Rent estimate for your salary
Until now, it has been said that "rent should be 30% of your take-home pay."
However, this was based on the assumptions that "salaries increase in proportion to age" and "companies provide rent subsidies," which were commonplace during the boom years when the Japanese economy continued to grow.
In fact, when we look at recent trends, we are starting to see negative opinions, such as "30% is high."
In recent times, social changes such as 30 years of deflation, the reality of stagnant wage increases, and diversifying working styles are likely influencing people's attitudes towards rent.
So let's think about how much rent you can actually afford to live on comfortably given your income.
The difference between income and take-home pay
First, you need to understand the difference between income and take-home pay.
Income refers to the total amount paid, and take-home pay refers to the amount actually deposited into your account after deducting taxes, social insurance, employment insurance, etc. from the "total pay."
So when calculating rent, make sure you calculate it based on your take-home pay.
Also, we will exclude things that may be lost due to the company's financial situation or if you change jobs, such as bonuses or rent subsidies provided as company benefits.
Fixed costs
Make sure to calculate the small details, including how much you will definitely need each month apart from rent.
Examples of expenses that come to mind include utility bills and communication costs (internet and smartphone charges), but there are also other expenses such as the loan and parking fees if you own a car or motorcycle, things you buy regularly (such as cosmetics and contact lenses), and regular payments (gym membership fees and subscriptions).
Even if you don't buy clothes every month but do buy in bulk for each season, it's important to think about it in monthly installments.
Also, unexpected losses in income and increases in expenses can happen to anyone, so we recommend that you also consider saving money as a fixed expense to protect your livelihood in the event of an emergency.
Housing expenses other than rent
What is often overlooked are housing costs other than rent. In addition to monthly management fees and common area fees, fire insurance premiums are renewed every two years.
Also, many rental properties may charge renewal fees every two years, so be sure to take this into account when calculating your rent.
Reasonable rent calculated based on 30% of take-home pay
It is important to calculate your take-home pay and expenses before deciding on your rent.
Adjust the rent ratio based on your fixed costs and lifestyle to find out what the appropriate rent is for you.
If you were to calculate rent based on 30% of your take-home pay, it would look like this:
| Take home amount (monthly income) | Rent guideline (30%) |
|---|---|
| 150,000 yen | 50,000 yen |
| 200,000 yen | 60,000 yen |
| 250,000 yen | 75,000 yen |
| 300,000 yen | 90,000 yen |
For example, if you want to increase your savings even if it means lowering the quality of your living environment, you should lower the proportion of rent you spend on rent.On the other hand, if you want to be particular about your living environment and want to increase the proportion of rent you spend on rent, you will need to make an effort to reduce your living expenses.
You can expect to see sustainable savings by reviewing your fixed costs, such as reducing food costs by cooking at home, eating out less often, and cutting entertainment expenses.
The initial cost of moving
When renting a new property, it is easy to overlook the initial costs and moving expenses. These expenses are so large that there is even a term for this: "being poor when moving."
Let's take a look at the initial costs for average rent and moving costs based on the size of the property.
Initial cost average
For example, if your rent is 60,000 yen, you can expect it to cost around 240,000 to 360,000 yen.
This includes costs associated with the rental property (deposit, key money, brokerage fee), as well as the cost of purchasing furniture and appliances and moving expenses.
Also, "4 to 6 months' rent" is just a guideline, and depending on the property and moving conditions, it may be more expensive or it may be cheaper.
When moving out on your own for the first time, you want to avoid paying large amounts of money as much as possible.
By choosing a property with " no deposit or key money" and "no brokerage fee," you can reduce the initial costs of moving in.
If you can keep the initial costs down even a little, it will be easier to start living alone, and you will be able to settle into your new life more comfortably after moving.
Costs required at the time of signing the contract
The following fees will be charged when signing a rental contract:
| item | Average cost |
|---|---|
| Deposit | Approximately one month's rent |
| key money | Approximately one month's rent |
| Brokerage fee | Approximately 0.5 months' rent |
| Daily rent | Depends on move-in date (rent / number of days in move-in month x number of days moved in) |
| Advance rent | Approximately one month's rent |
| Management fee, common area fee | Approximately 0.5 to 1 month's rent |
| Rental guarantee fee | Approximately 0.5 to 1 month's rent |
| Key exchange fee | 20,000~30,000 yen |
| Fire insurance premiums | 20,000 yen (2-year renewal) |
| Disinfection fee | 10,000~20,000 yen |
As mentioned above, there are various costs involved when signing a lease.
However, key money and agency fees can be negotiated, and fire insurance and disinfection fees can also be kept low by privately contracting with a separate company.
It is important to consider other options rather than making an immediate decision based on what the real estate company presents you with.
Other Expenses
If you buy furniture and appliances from scratch, it will cost about 200,000 yen even if you live alone. Therefore, it is a good idea to look for outlets and second-hand items to keep costs down.
In addition to furniture and appliances, when you move out on your own for the first time, you will also need to purchase bedding, shelves and storage items, as well as laundry supplies, bathroom supplies, kitchen utensils, and other daily necessities.
Most of these items are sold at home improvement stores and 100 yen shops and can be purchased cheaply, but if you were to buy a complete set of these daily necessities from scratch, it would cost you tens of thousands of yen.
Moving expenses
The cost will vary depending on the distance you are moving, the amount of luggage you are taking, and the moving company you are using.
Nowadays, there are many websites where you can easily get quotes from several companies by entering the necessary information online.
I recommend using quotation sites because they can give you a rough idea of how much your move will cost.
If you don't have enough money for the initial costs, it will have a big impact on your life after you move, so it's important to have a detailed understanding of the costs required for moving.
In particular, when it comes to daily necessities, you will likely find yourself needing this and that once you start living in your home. It's important to do your research thoroughly and plan a comfortable budget.
Tips for keeping rent down
Even for properties in the same area and size, rent can vary greatly depending on the conditions. Next, we will introduce some tips for keeping rent down.
Here are five ways to save money on rent:
- Search for properties that are more than 15 minutes' walk from the station
- Search for properties next to express rapid trains
- Search for older properties
- Search for properties outside peak seasons
Search for properties that are more than 15 minutes' walk from the station
If you want to keep rent low, it is effective to look for a property that is more than 15 minutes' walk away from the station. The further away from the station, the lower the rent and the larger the property tends to be.
A 20-minute walk can be reduced to about 5 minutes by bicycle. If you think of it as exercise for your health, you will be more likely to continue it for a long time.
Search for properties next to express rapid trains
Another key point is to compare the cost of a commuter pass with the rent, and aim for a nearby station where express or rapid trains stop.
Areas around stations where express and rapid trains stop are popular and tend to have high rents, so you may be able to find a bargain property at the next station.
Additionally, areas around train stations with multiple public transportation links are popular locations and tend to have higher rents.
It may be a good idea to look for a property a little closer to a good location.
Search for older properties
Newly built or recently constructed properties are inevitably more expensive.
Since one guideline for the age of a property is less than 10 years old, it may be a good idea to expand your criteria to include properties over 10 years old, which many people tend to shy away from.
Buildings constructed after June 1981 will comply with the new earthquake resistance standards, so as long as the interior is fully renovated, it will not be a disadvantage.
However, you need to check the condition of the room properly when viewing it.
The following article introduces some points you should check when viewing a property, so please refer to it.
What to look for when viewing a rental property? Tips for choosing the right room
Search for properties outside peak seasons
Real estate companies become busy from around January in preparation for March, when many people begin new lives and move around.
In March, when many people move, demand for properties inevitably increases and rents tend to be higher.
When demand for properties is high, it can be difficult to negotiate rent, so if you can adjust your moving schedule, we recommend moving outside of peak periods.
summary
This time, we introduced the average prices for appropriate rent and initial costs based on your own take-home pay.
Basically, it is important to decide on your rent after carefully simulating how much you have left and how much you want to have left.
If the rent is too high for your standard of living, it may have negative effects such as not being able to spend money on hobbies, a decline in your quality of life, and not being able to save as much as you would like.
However, you should avoid choosing a property that does not suit your lifestyle in terms of area, room size, facilities, commuter access, surrounding environment, etc., just for the purpose of lowering rent.
If you end up becoming dissatisfied and have to move again soon, it will cost you a lot of money.
Find a place to live that offers a reasonable balance between rent and your lifestyle by practicing money-saving techniques that suit you and getting your income and expenses in order.
