Do you need a guarantor when renting? more save and guarantee solution

Not only in the past, when renting a house in Japan, it was necessary to have a guarantor, but now many houses are still required to have a guarantor to rent. 

In a nutshell, a guarantor is a person who takes responsibility when something unexpected happens to a tenant or even pays for the rent when the tenant is unable to pay. 

However, recently we often see the phrase “no guarantor” in the ads of real estate companies that have rental houses for foreigners. This is not because they trust you 100% without a guarantor. In case of long-term rental, many rental companies provide that you must use a “guarantor company” instead of a guarantor who is an acquaintance. 

So what is the guarantee company? Why more and more of this type?

What is guarantee company

It’s simply “the company that replaces the associated guarantor.” 

By paying the initial fee (about 1 month’s rent) and, or monthly fee, you will be replaced by the guarantor by the guarantee company.

Why is the demand for guarantee company keeps getting higher by the day?

Both Japanese and foreigners face many problems with the guarantor mechanism. 

One big problem, for example, is the aging of underwriters. Normally, the guarantor is usually required to be a parent or relative of the spouse, brother, sister… but there are cases when contacting the elderly guarantor, that person has died. That’s why there is no guarantee. 

For foreigners, this is even more difficult because it is very difficult to find a sponsor, especially for newcomers to Japan. Not everyone can be a guarantor, in addition to needing to meet some mandatory conditions on relationships, income… 

On the other hand, if the tenant regularly pays the rent late or voluntarily returns home, the landlord will suffer huge losses. 

For these reasons, the service “guarantee company” was born. The guarantor company is also the unit that will collect rent from tenants, which will help landlords have a stable monthly rent and homeowners can have complete peace of mind. 

Therefore, it can be said that the “no guarantor” mechanism is “can use the guarantor” and pay the fee on behalf of the guarantor.

About assessment and service fee

Not every payment is OK, the guarantee company will also perform an appraisal of the tenant’s records. The appraisal and according to which standard completely depends on the guarantee company. 

Some companies rely on credit card history or on past rental history. 

① Can the tenant afford to pay the rent? * Usually the rent amount is less than 1/3 of monthly income. 

② The person who provides all necessary documents such as passport copy, status / duration of residence, residence card, work certificate, etc. The appraisal will be done based on these criteria.

Way to calculate the service fee

Usually, the initial cost is 50% to 100% of the total monthly rent (rent + management fee) Renewal fee 10,000 yen/year 

* In addition, in some cases, an additional monthly fee will be charged. Using guarantor companies has the disadvantage of being expensive, but in return you can sign a lease more smoothly than finding a guarantor. 

Undoubtedly, for foreigners, using a “guarantor company” will increase the likelihood of being accepted for a rental compared to a guarantor you know.