Want to Move but Can’t Afford the Initial Costs? Here’s What You Can Do!

2024-11-15

Many people worry about the initial costs of moving, especially when they turn out to be higher than anticipated. If you’re unsure about the total expenses involved, you might find yourself running short on funds.

In this article, we’ll break down the initial costs associated with moving, offer advice on what to do if you can’t cover these expenses, and share tips on how to minimize costs. If you’re looking to save money on your move but aren’t sure where to start, this article is for you.

Rental properties managed by Village House do not require a deposit, key money, or guarantee fee. To reduce your initial costs, please visit our website for more information.

The initial costs of moving consist of 3 categories

There are three main types of initial costs required for moving.

1. Rental contract costs

2. Moving costs

3. Purchase costs

The “rental contract costs” tend to be the most expensive of the three. Generally, 4.5 to 5 months’ rent is required. The breakdown of rental contract costs is the deposit, key money, advance rent, prorated rent, brokerage fees, fire insurance, etc. Note that the amount varies depending on the property.

The cost of moving can vary significantly based on distance and time of year. If you’re relocating within the same prefecture, you might find that local moving companies offer more budget-friendly options. For those considering major moving companies, requesting comparative quotes from several providers is advisable to ensure you get the best deal.

If you don’t have any home appliances or furniture, you’ll need to budget for purchasing these items. Additionally, if you’re renting a property before your move, remember to factor in the removal fees. It’s important to keep these costs in mind to avoid surprises.

Calculate the initial costs of rental property

	Cost
Rental contract costs	4.5 to 5 months’ rent
Moving costs	50,000 to 100,000 yen (※)
Purchasing items	100,000 to 150,000 yen (※)
Moving out costs for the apartment you lived in	Depends on the condition when you move out

※Cost for a single person

For the total initial cost, you should have enough cash for 6 to 7 months’ rent. However, the amount required varies depending on the conditions, so please use the above amounts as a guide.

4 solutions if you can’t pay the initial costs

Negotiate initial cost installment payments with a real estate company

If you find yourself struggling to pay the initial costs, reach out to your real estate company as soon as possible. They can facilitate discussions with the landlord to explore options for extending your payment deadline or setting up installment plans.

When negotiating, be clear about your intention to pay and propose a specific date for when you can make the payments. Simply asking for an extension without a concrete timeline may not yield positive results.

Utilize local government subsidies

Depending on your region, you might be eligible for subsidies from local governments, especially if you are a newlywed couple or a family. The specifics vary by municipality, so it’s a good idea to check your local government’s official website for available programs.

Additionally, families facing financial hardships might consider applying for public housing. While competition can be high and acceptance is not guaranteed, some municipalities offer preferential treatment during the lottery process for families with children, single-parent households, and families with disabled members.

Pay in installments with a credit card

While the initial fees for moving are typically paid via bank transfer, many real estate agents now accept credit card payments. If you opt to pay using a credit card, you can choose to pay in installments, which makes it easier to manage your initial expenses. Just keep in mind that interest rates can be high, depending on the payment plan you select, so it’s wise to check the terms carefully before proceeding.

Borrow money from family members

If you’re only slightly short on funds for your initial costs, consider asking family members or close friends for a loan. Given your trusting relationship, this can be a viable option. However, it’s important to formalize the agreement by creating a proper promissory note that clearly outlines the repayment deadline.

It is said that money can ruin relationships. Therefore, many people may feel uncomfortable lending money. If you sense discomfort or are turned down, respect their decision and explore other ways to raise the necessary funds.

Ways to reduce initial rental costs

Choose a property with low rent

Opting for a property with lower rent can significantly impact your initial costs. For example, if the rent is 10,000 yen cheaper, your overall initial expenses could be reduced by about 50,000 yen. The lower the rent, the less you’ll need to spend upfront for the apartment rental contract. If you’re looking to minimize your initial costs, it’s wise to reassess your budget and seek out properties that align with your financial goals.

Select a property without a deposit or key money

Deposits and key money can comprise a substantial portion of your initial moving costs, typically amounting to 2 to 3 months’ rent. By choosing a property that doesn’t require either, you can effectively lower your initial expenses by the same amount. Even if you only eliminate one of these fees, you could save tens of thousands of yen.

However, be cautious when considering properties with no deposit or key money. Often, they may charge slightly higher rent or add fees for cleaning and other services. It’s essential to compare the total costs over two years to ensure you’re making a financially sound decision.

Choose a property with a free rent offer

Some properties offer free rent for a specified period, typically one to two months, and in some cases, even up to three months. This can be a great way to reduce costs. However, be aware that there may be conditions attached, such as penalties for moving out within a year. It’s essential to read the fine print and understand the terms before signing the contract.

Select a property without a guarantor company

By choosing a property that doesn’t require a guarantor company, you can save an additional 0.5 months’ rent. A guarantor company acts as a financial backer for your rental agreement.

If you go with this route, you will need to secure a personal guarantor with a stable income. Often, parents or close relatives can be good candidates. If your parents have a steady job and are willing to help, asking them to act as your guarantor can also assist in minimizing your initial costs.

Key tips for reducing moving costs

Do it yourself

If you choose to move without a moving company, you can save on costs. However, you’ll need to account for expenses like rental trucks, gasoline, and other supplies. Another option is to enlist the help of family or close friends. When asking for assistance, it’s common to offer a small token of appreciation, such as 5,000 to 10,000 yen in cash or a gift certificate.

Avoid peak moving season

If your moving schedule is flexible, consider avoiding the peak season from March to April. During this time, demand for moving services is at its highest, often resulting in increased prices. In contrast, June and November typically see fewer requests, allowing for more competitive pricing. Be cautious around Golden Week in May and other long holidays, as demand can spike, leading to higher fees.

Lighten your load

Reducing the amount of stuff you need to move can significantly cut costs. For instance, if you have five or fewer cardboard boxes, using a courier service or transporting them yourself can be a more affordable option.

Get and compare quotes

Moving costs can vary widely between companies, sometimes by nearly double. To ensure you get the best deal, always request quotes from multiple moving companies and compare them carefully.

Consider self-pack plans for those living alone

Services like “self-pack” offer convenient solutions for solo movers. Unlike typical single-person moves, these services come with predetermined limits on the number of cardboard boxes and the dimensions of the special boxes, ensuring a streamlined and efficient moving experience.

Prices for these services are typically lower than those of traditional moving options, making them a great choice for budget-conscious movers. However, it’s essential to review the moving company’s official website thoroughly to ensure that all your belongings fit within the specified limits.

Choose a real estate company that provides appropriate advice

To keep initial costs down, it’s crucial to select a real estate company that offers sound advice. If you communicate your budget—like wanting to limit initial costs to a certain amount or preferring to pay with a credit card—you can find a company that meets your needs.

At Village House, we stand out by eliminating deposits, key money, renewal fees, and other charges. Additionally, we offer one month of free rent, making us an excellent choice for those looking to minimize their initial expenses (campaigns vary by property). Feel free to reach out to us for more information!