Renting an apartment in Japan is an exciting step, but the application process can be daunting for expats. One of the most significant hurdles foreign residents face is the Guarantor (Hoshonin) requirement.
In Japan, nearly all landlords require a joint surety to co-sign the lease. If you cannot find a Japanese national willing to take on this financial liability, you will likely need to use a Guarantor Company (Hosho Kaisha).
This guide explains everything you need to know about using a guarantor company to secure your home in Japan.
What is a Guarantor Company (Hosho Kaisha)?
A Guarantor Company (保証会社, Hosho Gaisha) is a specialized third-party service that acts as your financial guarantor. For a fee, they sign the lease agreement alongside you, assuring the landlord that rent will be paid and damages will be covered.
Why do landlords prefer them?
For landlords, a foreign tenant without local ties can be seen as a "flight risk." If a tenant were to suddenly leave Japan or default on rent without paying, chasing them for money internationally is difficult. A guarantor company mitigates this risk. They are established Japanese entities that are easy for landlords to contact and hold financially responsible if issues arise.
Using a guarantor company simplifies the rental process for foreigners who lack local contacts.
The Difference: Individual Guarantor vs. Guarantor Company
| Feature | Individual Guarantor (Shakai Hoshonin) | Guarantor Company (Hosho Kaisha) |
|---|---|---|
| Relationship | Usually a relative or close friend. | A business entity with no personal relationship. |
| Eligibility | Must be a Japanese national or permanent resident with sufficient income. | Available to anyone who passes the company's screening. |
| Liability | Personal liability creates relationship strain. | Purely financial transaction. |
| Cost | Usually free, but a heavy burden on the guarantor. | Requires a fee (usually 50-100% of monthly rent). |
How Much Does It Cost?
The primary disadvantage of using a guarantor company is the cost. The fees are standard across the industry, though they can vary slightly by region and specific company.
- Initial Fee: Typically 50% to 100% of one month's rent.
- Consumption Tax: An additional 10% tax is applied to the service fee.
- Renewal Fee: If you renew your lease for another term (usually after 2 years), you will likely have to pay the fee again (often 50% of the rent).
Important: This fee is paid upfront, along with your first month's rent, deposit, key money, and agency fees. You should budget an extra 0.5 to 1 month of rent specifically for this service when moving.
The Application Process
Using a guarantor company is generally a smooth process, usually handled by the real estate agent. Here is the typical workflow:
- Property Hunting: Find an apartment. Check if the property accepts guarantor companies (99% do, but some owner-managed properties may insist on an individual).
- Application Submission: Submit your rental application. The agent will send your documents to the landlord and the guarantor company simultaneously.
- Screening: The guarantor company will review your:
- Visa status (Long-term visas are preferred; student visas are usually okay.
- Income (They look for stability).
- Employment history.
- Approval & Payment: Once approved, you must pay the guarantor company fee. They then issue a "Guarantee Certificate" required to sign the lease.
Important Considerations for Foreigners
It is Not a "Get Out of Jail Free" Card
A guarantor company ensures the landlord gets paid, but it does not absolve you of responsibility. If you fail to pay rent or cause damage, the company will pay the landlord and immediately bill you. Failure to pay the company will result in debt collection actions and damage to your credit score in Japan.
Screening Criteria
While a guarantor company is easier to find than a human co-signer, they are not guaranteed to approve everyone.
- Visa: Short-term tourists (e.g., 90-day stay) generally cannot use guarantor companies or rent long-term apartments. You typically need a status of residence (Zairyu Card) valid for at least one year.
- Income: If your income is insufficient (e.g., not earning 3x the rent), the company may reject the application or require additional conditions.
Conclusion
For most foreigners moving to Japan, the Guarantor Company (Hosho Kaisha) is not just an option—it is a necessity. While the upfront fee adds to the initial moving costs, it is the price of admission for renting independently without burdening friends or family.
When budgeting for your move, always calculate the guarantor fee (approx. 50-100% of rent) into your initial costs to ensure a smooth transition into your new Japanese home.
