Pulse Rate: ‘Free rent’ pricing aims to fill up empty apartments
Summer heat doesn’t just slow down pedestrians in Japan – it also stifles the real estate industry. Most of this is due to the Japanese employment/academic calendar, which begins in April every year and ends the following March. Between February and April, students move closer to the schools where they will matriculate, and new company employees move out of the house and start life as a shakaijin (社会人, working adult).
As covered on the June 11 broadcast of “Gacchiri Academy,” a weekly info-variety program on TBS about saving money, once everyone gets settled, real estate agents have to scramble to fill the empty rooms. They can’t lower rents because that causes current tenants to complain and also reduces the value of the property. In the absolute worst cases, rooms that don’t find tenants by the end of April remain empty for a full calendar year. In response, some real estate agents have started offering “free rent” (フリーレント) deals on certain rooms.
No, “free rent” does not imply totally free, but it does mean that the first two months are free. Additionally, many of these have no “key money” payment to the landlord, which can be as much as two months rent, and no introduction fee to the agency. The only thing required is a month’s rent for deposit. The goal of the “free rent” discount is to get bodies into the room so that the landlord can stop taking losses.
Shortly after the broadcast, the term “free rent” skyrocketed to the top of the Google Trends keyword searches. Clearly, there is a near-constant hunt for bargain living spaces in Japan. Japan Pulse has previously covered the boom in room sharing. Yen for Living has also covered room sharing as well as discounts on rooms where people have died. Gacchiri Academy suggested that a little negotiation might be a previously unconsidered tactic – real estate agents and landlords might be willing to offer the free rent policy for rooms that were previously not discounted.