Percentage of income spent on rent

I just wondered what percentage of monthly income do people tend to spend on rental accommodation in Japan.
(excluding water,gas,electricity bills)

Is 25% considered high?

It depends on where you live. If in Tokyo, maybe 25% of take home pay is tight. Should be somewhere above 30% of the take home pay.

I am more interested in Tokyo but responses from any parts of Japan would be welcome.

for example 110000 rent from 454000 monthly pay? is it too much to spend on just rent?
living in kaminoge (setagaya)

As a guideline, people often say "try to keep your rent payment to max. 30% of your monthly income," to young people renting an apartment to live in Tokyo, for example those renting for the first time as they get employed after graduating from university and move away from their parents' home, or considering moving to another location in Tokyo.

I don't know your exact circumstances, but renting an apartment for 110,000 yen/month in Setagaya (if you find a nice place for that price) out of that income sounds alright.

It severely depends on what you want to do. If you want to live in a big house you spend more on rent if you don't mind living in a smaller house you can pay way less.

it's also important how long you are planning to stay in the apartment. If you stay at least 2 years it will get cheaper.

It should be more than easy to live on 200,000yen per month. So if you would spend 80,000yen on rent you have 120,000 for anything else that is more than enough to eat, do fun stuff etc.

It depends where in Tokyo you live, the type of accommodation, the size of the accommodation, it's age etc etc.

Person can spend as much as 100,000 a month at one location and building and another person might only spend 60,000 a month for the exact same sized place in another location.

Also in Tokyo you have some employees who live in company housing, mostly single employees who only pay a small amount of rent living in the company owned apartments. Other people might continue to live with their parents (not too abnormal) until they get married.

Just like living in a big city like New York City, you have a ton of different prices depending on location and type of accommodation.

Thanks for the information like the 30% guideline. That's really helpful.
I am aware that properties come in all different sizes and all different prices etc that wasn't really the point of my question. I was more interested in what percentage of income people are spending on rent in japan.
The reason I'm asking is because when I said to my coworkers that I am thinking of spending 110000 per month they react like I'm crazy and it's so expensive.
I can assume they are on a similar salary so I was wondering if it's just cultural difference and Japanese spend a much smaller percentage of income on rent or should I actually be concerned with all the other living costs of Tokyo spending 110000 is unreasonable?

Now, I think spending that much for rent is a bit unreasonable, especially if you're living by yourself. (Maybe I'm just a cheap person though...)

Didn't think that a few years ago when I worked in Japan though, I didn't get any housing support and worked in Minami-Aoyama (Minato-ward). I had a comparable salary to you and when I told my co-workers that my rent was 85000, they said that's too much. Looking back now though, considering Japan's expensive with many other things, it may be a little better to leave some leeway for those unexpected expenses.

I don't think 110,000 is unreasonable on that income. 25-30% on rent is perfectly normal. Your co-workers may be the type who like to cram themselves into a 30-year-old 6-mat apartment to save money (I know people like this), but not everyone wants to live like that. I say go for it.

There are so many factors that go into this decision that you really can't get a useful answer unless you shell out a lot more information.


Before or after taxes and deductions?
Company contract or individual rental?
Deposit and key-money support?
Monthly commute expenses paid by company?
Commute, community requirements?
How long do you plan on living there?
With family or alone?
Lifestyle?
Savings goals?

If you want to make an informed decision, you should consider these issues as well.

IMO, the 25-30% rule is dangerous and can lead many people to financial instability, especially in big cities like NY (or Tokyo), if you don't give enough consideration to all the outlying factors.

That said, I am a big believer in living some place I want to spend time at on the weekends and after work.

To make you feel better in the very expensive Canadian city where I live it is common to spend 30 % of the wage on housing..30% of the GROSS wage, before income tax and all other deductions....

This means that people actually spend 50% of their income on housing.
Quite a few families spend the whole wage of one of the 2 wage earners in the family on rent or mortgage and utilities.

I spend just above 25% of my NET income on mortgage. My neighbours, who bought a place similar to mine in the past 2-3 years pay nearly twice as much as the price went up a lot..

I think it is a bit pricey "just for rent" but that is just me. As mentioned it depends on the person, your overall goals. I agree with the person above there are MANY factors that also come into play listed above just to name a few.

OK after income taxes taken away I think 110000yen is around
31% of my monthly income.(?not sure though)
I live alone
individual contract
I aim to save 10% of my earnings (at least thats what my Mum tells me)
work pays for commuting fee
lifestyle normal, like socializing with friends, maybe eat out once a week or go to bar with friends.
fly home to UK once a year.(ticket + tax I spend under 10,0000 always - I fly cheap)

it is a really nice place though...mmmm

Without going into personal details like I have had to ... about what percentages of monthly income do others spend ? (people renting in Japan)

Well, the math is pretty straight-forward.
If you assume 360,000K yen/month after taxes.

Rent 110,000
Food 60,000
Cell phone 8,000
Utilities 20,000
Personal savings 50,000
Annual travel-home savings 85,000
Personal Entertainment 30,000

The math seems to work and it sounds like you really want the place so go for it! As long as you're not going out drinking 3-4 nights a week, you should be able to living well and still save a lot (and not have to worry about getting in debt to travel home).

The biggest issue I guess is all the up front money you'll need on a place like that. If you're going through a regular realtor, then you'll probably need 4-6 months rent up front.

Honestly in the end if you feel that's fine in how much you're paying, then that's fine.

Some people spend that much, others do not. Some spend 20% others spend 40%.

I don't think it is really necessarily to justify an expensive if you are fine with it.

Thanks so much that is a big help to see it all broken down like that. I am not confident with budgeting. (I dont overspend a lot, I am just not very aware with financial stuff)
I think I will go for it.
It is ....1month key money, 1 month deposit , 1 month agency fee.
I think I have got it covered (although its a big dip into my account!)
I hate key money It is basically just stealing as far as I can tell - should be banned.

If anyone is interested to see the place in question...
http://www.prismic-works.com/results/article/kaminoge_k.htm

Anyway it is still early days I have got to pass the shinsa.

Lastly, don't forget to add the first 1-2 month's rent to those fees (sometimes referred to as first and last month's rent)!

So you need a total of 4-5 month's rent just to get the keys.

Just checked the place. Its not expensive at all. I should say you got a good price for a new house which is built in Feb 2010. By the way, you may keep in mind other expenses such as residence/ward tax (payable to your ward office). Usually its based on your income and payable on quarter basis. I feel like its a part of my rent...lol. The rent you mentioned, I guess, includes cosumption tax which is usual practice here in Japan. The residence/ward tax depends on where you live and may range from 15,000 yen to 50,000 yen per quarter for a resident who is single (cheaper for married person with family).

I used this site to calculate my income tax...
I did the sum national + municipal(6%) + prefectural(4%)
http://www.japan-guide.com/e/e2206.html

So I think that local tax I already accounted for in calculating my take home pay?

It doesnt mention on the japan-guide site about different tax rates for different areas though, can I ask the estate agent?

About the upfront costs I think I have it covered the estate agent explained it all clearly. It was more the long term I was concerned about and of course taxes seem very complicated to calculate.

oh of course I forgot about national pension insurance and health insurance.