After finding a rental property and submitting an application, the next step is the screening process. Ideally, you want this to go smoothly. Here, we will thoroughly explain the rental screening process, including the criteria, required documents, and the steps involved. With proper preparation, there is no need to worry. Let's get ready and proceed confidently.

Not everyone can rent a property; only those who pass the screening process can. The screening checks if you can reliably pay the rent, if a guarantor can cover for you if necessary, and if you are likely to avoid causing problems after moving in.

Landlords need to ensure that tenants will pay the rent on time and have a guarantor if the tenant cannot pay. They also want to avoid tenants who might cause frequent issues like noise or garbage problems. The screening process addresses these concerns to reduce potential problems.

The screening is typically conducted by the property management company based on the application and required documents submitted by the applicant. Sometimes, landlords entrust the management company with this task.

(1) Ability to Pay Rent

The first criterion in the screening process is your ability to pay the rent. This is judged based on whether the rent is affordable relative to your income. For salaried employees, income is verified through documents like the tax withholding slip, and for self-employed individuals, through tax return documents.

Generally, the acceptable rent is considered to be between 1/40 to 1/48 of the annual income or 1/3 to 1/4 of the monthly income. However, the ability to pay is not judged solely on income but also on factors like your employer, length of employment, family structure, and age.

While the screening criteria are set conservatively, it is important to note that the suitable rent for living is often considered to be between 1/3 to 1/4 of your net monthly income (after deductions like social insurance and taxes). Therefore, the gross income (before deductions) should be about 15% to 25% higher than the net income.

For a property with a monthly rent of 70,000 yen, the annual income guideline is between 2,800,000 yen and 3,360,000 yen, with a monthly gross income of approximately 230,000 yen to 280,000 yen. On the other hand, the appropriate annual income is said to be between 3,290,000 yen and 3,950,000 yen, with a monthly gross income of 274,000 yen to 329,000 yen. Use this as a guideline when selecting a property, and if you do not pass the screening, consider revising your rent.

(2) Can a Guarantor or Guarantor Company Be Provided?

When renting a property, you need to provide either a personal guarantor or a guarantor company. Personal guarantors are typically required to be relatives and are subject to similar income screening as the applicant. For instance, it can be difficult to pass the screening if the guarantor is retired.

If you use a guarantor company, you usually do not need a personal guarantor. The cost is generally around 50% of the monthly rent as a contract fee and an annual renewal fee of about ¥10,000. The guarantor company will check for any rent payment history issues, employment verification, and credit information. Recently, it has become common for properties to require a guarantor company, with estimates indicating this is the case for 80% to 90% of properties.

(3) Potential for Post-Move-In Problems

The screening also assesses whether the applicant is likely to cause problems after moving in. While landlords rarely meet applicants in person, the property management company evaluates the applicant's behavior during interactions, the thoroughness of the application, and the ease of communication during the screening process.

Typically, you don’t need to worry excessively about this aspect unless there are extreme issues like very poor behavior, a carelessly filled application, or unresponsiveness. The most critical aspect is the "negotiation" process. Excessive negotiation can negatively impact the landlord's perception. If you need to negotiate, do so within reasonable bounds and consult with your property management representative.

(4) Japanese Language Proficiency

When foreign nationals rent an apartment in Japan, their Japanese language ability is also considered a part of the screening criteria. Although the use of guarantee companies that cater specifically to foreign nationals has become more common, reducing language barriers during the screening process, as of 2024, many properties still prioritize applicants who can read and write Japanese and communicate in daily conversations. This is to avoid potential issues and ensure efficient communication during the tenancy. If you are concerned about your Japanese language skills, proceed while consulting with the staff.

As previously mentioned, the rental screening checks your ability to pay rent, the presence of a guarantor, and the potential for causing issues post-move-in. These checks are supported by the documents you submit with your application. Let's explain the necessary documents for the rental screening.

(1) Application Form

The rental application form requires information about the applicant, co-occupants, and the guarantor. The landlord or property management company uses this information to make a decision during the screening process. While the exact content may vary depending on the form, it generally includes the following details. You may be asked to fill out a printed form by hand or, more commonly these days, complete an online form via a dedicated website after email verification.

 
【Applicant Information】
①Name
②Date of Birth (Age)
③Gender
④Nationality
⑤Current Address
⑥Home Phone Number
⑦Mobile Number
⑧Email Address
⑨Employer Name
⑩Employer Address
⑪Employer Phone Number
⑫Industry Type
⑬Capital
⑭Number of Employees
⑮Department
⑯Position
⑰Date of Joining
⑱Years of Service
⑲Annual Income (Pre-Tax)
⑳Previous Employment if Less Than One Year at Current Job

 
【Co-Occupant Information】
①Name
②Relationship to Applicant
③Gender
④Age
⑤Employer
⑥Annual Income
⑦Phone Number

 
【Guarantor Information】
①Name
②Date of Birth (Age)
③Gender
④Nationality
⑤Current Address
⑥Home Phone Number
⑦Mobile Number
⑧Email Address
⑨Employer Name
⑩Employer Address
⑪Employer Phone Number
⑫Industry Type
⑬Capital
⑭Number of Employees
⑮Department
⑯Position
⑰Date of Joining
⑱Years of Service
⑲Annual Income (Pre-Tax)
⑳Previous Employment if Less Than One Year at Current Job

(2) Identification Documents

①Residence card
②Passport
③My Number Card
④Student ID
⑤Driver’s License

 
You will typically be required to submit one of the above photo IDs. If the address on the ID does not match your current address, update the address beforehand or write your current address on the back of your passport. For the My Number Card, ensure that it is presented in a case that hides the My Number, as it will not be accepted otherwise.

(3) Proof of Employment

Proof of employment can be demonstrated by submitting either or both of the following:
①Employee ID Card
②Health Insurance Card

(4) Proof of Income

For proof of income, salaried employees must submit their previous year's tax withholding slip, while self-employed individuals must submit a copy of their tax return. International students need to submit the acceptance letter from your school + your parent's or your bank statement.
Though not always required during the screening, it will be necessary at the contract stage, so prepare these documents in advance. If you are newly employed or a recent graduate and have not yet received a salary, a job offer letter or an employment conditions notification detailing your salary and conditions can serve as proof of income.

 
①Previous Year’s Tax Withholding Slip
②Copy of Tax Return
③Job Offer Letter
④Employment Conditions Notification
⑤Notification of acceptance from your school + your parent's or your bank statement

Once you pass the rental screening, the contract process typically takes place within 10 to 14 days. Since the period from screening to contract signing is quite short, it's important to prepare the necessary documents in advance.

①JUMINHYO (Resident Certificate of the Tenant *need to get it at the ward office)
②HANKO
③Guarantor’s Seal Registration Certificate
・Not required if using a guarantor company
④Guarantor’s Consent Form (provided by the real estate company)

More rental properties are now requiring the use of guarantor companies instead of individual guarantors. Currently, around 80% to 90% of rental properties mandate the use of a guarantor company. What exactly is a guarantor company, and what do they evaluate? This section will explain the role of guarantor companies and why their use is becoming more common.

(1) What is a Guarantor Company?

A guarantor company (rent guarantor company) acts in place of an individual guarantor, ensuring that the landlord receives the rent even if the tenant defaults. There are three types of guarantor companies: credit-based, association-based, and independent, each with its own characteristics.

(2) Reasons for the Increase in Guarantor Company Usage

The shift towards requiring guarantor companies is due to several reasons:

• ・Clear and structured screening processes, including credit checks and delinquency history, reduce the risk of non-payment.
• ・The landlord receives a rent guarantee in case of tenant default.
• ・Guarantor companies handle legal procedures in the event of continued non-payment.
• ・For higher rents, it can be difficult to find a relative who can act as a guarantor, and involving them often requires additional time and effort for documentation. Consequently, many applicants prefer using guarantor companies.

Here are some common reasons why an application might fail the rental screening:

(1) Rent is Too High Compared to Income

If the rent is deemed too high compared to your income, you might fail the screening based on insufficient payment ability. Typically, the rent should be about 1/40 to 1/48 of your annual income. For more details, refer to section (1) on assessing rent payment ability.

(2) History of Credit Card Delinquencies

For properties requiring a guarantor company, many guarantor companies will check your credit history. If you have had credit card delinquencies, these can remain on your record for 5 to 10 years. See section (1) on guarantor companies for more details.

(3) History of Rent Delinquencies

If you have previously defaulted on rent, this information will be in the database for properties requiring guarantor companies. The record can stay for about five years. Refer to section (1) on guarantor companies for more information.

(4) Excessive Negotiations

If you negotiate too much on rent or other terms, you might negatively impact the landlord’s impression and fail the screening. If there are multiple applicants, the landlord may prefer a straightforward applicant without negotiations. Be mindful that excessive negotiations can carry risks.

(5) Poor Impression on Landlord or Real Estate Agent

Though rare, a poor attitude during property viewings or interactions with real estate agents can lead to a failed screening. If the landlord fears potential trouble or unjust complaints post-move-in, they may deny your application. Maintain a polite and respectful demeanor.

(6) Low Declared Income for Self-Employed Individuals

For self-employed individuals who declare a low income to save on taxes, the screening will consider only the declared income. This can lead to a failed screening if the declared income is too low.

(7) Lack of Communication During Screening Process

If you are unresponsive during the screening process or fail to return calls, it can be interpreted as a lack of interest in the property. Even if you pass the initial screening, landlords might be concerned about future communication issues in emergencies. Always respond promptly to inquiries.

(8) Parental Opposition

If your parents, as guarantors, express opposition to your living arrangement, such as living alone or cohabiting, it can lead to a failed screening. Clear communication with your guarantors about your move is crucial to avoid misunderstandings and ensure they support your application.

While we have discussed reasons for failing the rental screening, there are steps you can take if your application is denied. Here are some strategies to help you pass the screening.

(1) Confirm the Reason for Rejection with the Real Estate Company

If you don’t know the reason for the rejection, you can’t address it. It might be disappointing, but you should ask the real estate company why your application was rejected.

(2) Reapply for a Property with Lower Rent

If the rejection was due to income issues, consider applying for a property with lower rent. For guidelines on rent affordability, refer to section (1) on verifying rent payment ability.

(3) Use a Different Guarantor Company for Re-screening

If you failed the screening with a credit-based guarantor company, check if you can reapply with another guarantor company. Sometimes, you may pass the screening with an association-based or independent guarantor company. Consult with the real estate company for more details. Refer to section (1) on what guarantor companies are.

(4) Use a Personal Guarantor Instead of a Guarantor Company

If you failed the guarantor company screening and the property doesn’t mandate their use, you can try using a personal guarantor. This should be a relative with sufficient income to cover the rent. If your parents are still working or if you have siblings with adequate income, consider asking them. For rent guidelines, see section (1) on verifying rent payment ability. If your personal guarantor is approved, they will need to provide a seal registration certificate, which involves some effort. Make sure to explain everything clearly when you ask them.

(5) Apply Under Your Parents’ Name

This option is mainly for younger applicants in their early 20s. You can reapply using your parents’ name, similar to how students rent properties. If your parents agree, this shifts the screening focus to them, which can be effective.