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Japan’s new lease on life

By on April 29, 2009

Like me, perhaps your first glimpse of Japan was from the tiny window of a large 747 circling Narita sometime during or even well after the ‘90s.  From the air you saw lush green fields and woods, and now on the ground you want to lease some of that lushness for yourself.  Great.

With the best guess of the world’s economic experts scheduling a US come back for 2010, export-driven Japan won’t be due to begin its own recovery until 2012, and those of us seeking to lease property in the land of rising sun are queued up for the first few deals of the century.

But we must act quickly, striking while landlords are unsure still whether the iron is hot or not.  Uncertainty creates opportunity, because people (and landlords are people too) tend to do things that normally they might not, especially in the leasing market.

Since each year leasing in Japan does not really heat up until the summer months thaw the market, landlords stimulate the winter market by playing Santa clear up to Golden Week. Many relax terms, discount rents, waive Key Money, and even sometimes offer a month or two of free rent.

While we cannot quite yet “lease one, get one free,” current market conditions dictate that special offers may extend well past Golden Week into the summer. Along with rampant discounting, potential tenants may find a lot more property on the market to choose from.

For those interested in leasing sooner rather than later, here are some handy tips:

1. Find yourself an independent agent who is going to look after your best interests continually, and be aware that the agent is compensated by you.  Realistically, any agent who would discount their commission might be similarly disinclined to fight for you.

2. Help your agent help you.  Concentrate on a single agent and communicate thoroughly and clearly your likes and dislikes. If you research properties online, share them with the agent to create the clearest understanding of your needs. More than a thousand words, a picture might be worth the best deal for the best property.

3. Find the right property. Let the agent concentrate on when and how to negotiate the best terms. Make sure that the property chosen and subsequently fought for is something you can live with and do not have to live down.

4. Negotiate tough but fair terms, while not settling for less than you deserve.  Here, your agent can provide a lot of advice.  Complete your application before negotiating, as an application is considered a kind of non-binding calling card, without which no negotiations would be taken seriously by most Japanese landlords.

5. Bring treats to meet your landlord after move-in. A ¥3,000 box of individually wrapped Japanese sweets should do nicely. Precisely because it is not required, observing this kind of local custom may go a long way to ingratiate you with your new landlord.

By the way, not quite two decades after my own first view of Japan,  I am still proudly a GAIJIN with a unique perspective and access that should benefit your next lease (or purchase for that matter). So, do write back with your questions or otherwise let me know how I am doing with this series of articles. Your smile is my purpose.

Kevyn Johnson is a director with Platinum Real Estate Consulting and a co-chair for the Architecture, Construction and Real Estate committee of the American Chamber of Commerce in Japan.  He can be reached through our editors, or directly at kevyn@platinum1000.com.

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