Every two years, a stack of renewal notices goes out across my 9 rental properties, and roughly 70% of those notices include a line for koushinryou, the lease renewal fee that trips up almost every new landlord I mentor. The first time I asked a tenant to pay it, back when I only owned 2 units, I genuinely wasn’t sure I was allowed to. Sixteen years and dozens of renewals later, I know exactly when this fee applies, when it doesn’t, and how to handle the awkward conversation when a tenant pushes back.
If you’re renting out property in Japan, or renting as a tenant, this fee will eventually land on your desk. Here’s how I actually use it across my portfolio, and where I’ve learned to bend the rules when it makes financial sense.
What Koushinryou Actually Is
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Koushinryou is a fee a tenant pays to renew their lease, typically once every 2 years, which is the standard contract term across most of the properties I manage. It’s most common in the Kanto region, including Tokyo, and far less common in parts of western Japan, where some landlords skip it entirely. It’s separate from the deposit (shikikin) and the non-refundable move-in gift money (reikin) u2014 those happen at move-in, while koushinryou happens only at renewal time, and only if both sides agree to keep the contract going. The fee is written into the original lease agreement, not invented later, so tenants generally know it’s coming from day one if they read the fine print, though in my experience maybe 1 in 10 actually does.
How Much I Actually Charge
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The typical range runs from half a month’s rent to a full month’s rent. Across my buildings, average monthly rent sits around 68,000 yen, and I charge a full month as the renewal fee, so most tenants pay 68,000 yen every 2 years to stay put. On two of my older buildings where the local market is softer, I only charge half a month, around 34,000 yen, because I’d rather keep a paying tenant than squeeze every yen out of the renewal. Some smaller management companies charge a flat administrative fee instead, often somewhere between 10,000 and 30,000 yen, regardless of rent level. I’ve also seen a handful of buildings in my area move to zero renewal fee entirely over the past 5 years, usually newer buildings competing hard for tenants in a crowded neighborhood.
Why the Fee Matters for Landlords
This isn’t just a cash grab. Every renewal means reissuing the contract, re-verifying the guarantor or guarantor company, running a quick check on the property condition, and updating my records, and that paperwork eats about 2 hours of my time per unit. More importantly, a renewal is dramatically cheaper than a turnover. When a tenant actually moves out, I’m usually looking at 180,000 yen or more once you add cleaning, minor repairs, repainting, and the vacancy period before a new tenant signs, and that vacancy period alone often runs 4 to 6 weeks in my buildings. Koushinryou is a small price for avoiding that far bigger cost, which is exactly why I’d rather negotiate on the fee than lose a tenant over it. Think of it less as profit and more as a modest offset against the administrative load of keeping a long relationship going.
How It Interacts With Rent Increases
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Renewal time is also when I review rent for each unit, and I’ve learned not to stack a rent increase and a full koushinryou charge in the same conversation. If I’m raising rent by even 2,000 or 3,000 yen a month because of rising property tax or maintenance costs, I’ll usually cut the renewal fee in half that cycle. Hitting a tenant with both at once, a rent bump and a 68,000 yen fee, is the fastest way I know to trigger a move-out notice instead of a signature. Spacing these two costs out, or softening one when I push the other, has kept my renewal signature rate above 90% for the last several years.
When I Waive or Reduce It
I don’t apply the fee the same way to every tenant. Over the years I’ve built a short mental checklist for when I’ll cut it or drop it altogether:
- Tenants who’ve stayed 5 years or longer get a 50% discount on the renewal fee automatically
- Anyone who signs the renewal within the first week of receiving the notice gets 10,000 yen off, since it saves me follow-up calls
- Units that have sat vacant for more than 60 days in the past get the fee waived entirely at the next renewal to protect occupancy
- Tenants who switch to a guarantor company I already work with, simplifying my own paperwork, get a reduced rate
- Anyone renewing the same month I’m also raising their rent gets the fee cut in half, as noted above
These small concessions cost me very little compared to what a single vacancy would cost, and tenants remember being treated fairly.
What Happens When a Tenant Refuses to Pay
This is the part most new landlords get wrong. Koushinryou is a contractual custom, not a legal requirement like the deposit. If it isn’t written clearly into the lease, you generally can’t force payment, and Japanese courts have sided with tenants in cases where the fee looked excessive relative to the rent. In practice, when a tenant balks, I don’t threaten eviction over 68,000 yen. I talk to them, sometimes offer the 50% long-term discount early, and almost always land on a number both sides accept within a week or two. Losing a tenant who pays on time every month over a one-time renewal fee is a bad trade, and after managing this across 9 buildings, I’d rather keep the relationship than win the argument.
That’s the balance I’ve struck across all 9 of my properties: charge enough to make the paperwork worthwhile, but never so much that a good tenant walks away over 68,000 yen.
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