Hidden rental costs: What you need to know before you sign

Ah, the never-ending saga of renting! First, there’s the hunt for the perfect place, followed by the endless checks, securing the spot, and of course, those payments—month after month. Just when you think you’ve got it all figured out, bam! You’re hit with what feels like an extra charge on top of your rent. Or worse, your rent suddenly decides to level up and costs more than before.

Sure, rent is already pricey, but sometimes these sneaky extras are just part of the rental game. In this blog, we’ll dive into a few common rental practices around the world. Let’s get into it!

Japan: Reikin – A “gift” to your landlord for letting you exist in their space

Renting in Japan comes with an extra (nearly painful) cost—reikin or “key money.” Despite the name, it’s not actually a key deposit but a non-refundable gift to your landlord, usually 1-2 months’ rent. Why? Well, the practice likely started as a token of gratitude when housing was scarce (think post-disaster eras). And nope, you’re not getting it back.

On top of that, you’ll also need shikin (a security deposit, typically two months’ rent), agent fees (around half to a full month’s rent), and advance rent, meaning you could be shelling out six months’ worth of rent upfront every time you move. Ouch!

Can you escape this tradition? Maybe. Try these tricks:

• Check multiple listings (Suumo.jp or the building’s website) to see if another agent offers the same place without reikin.
• Negotiate through your agent, especially during off-seasons (April is peak moving season).
• Ask if the agent can waive or reduce their fee—some get kickbacks from landlords and might cut you a deal.
• Trade reikin for a slightly higher monthly rent, but do the math to ensure you’re not overpaying in the long run.

You might loathe reikin, but here’s the ironic twist—it can actually help you spot a stigmatised property!

In Japan, a house or apartment where someone has died—whether by suicide, murder, or even under suspicious circumstances—is often considered stigmatised. And guess what? Landlords sometimes waive reikin for these places to attract tenants.

So, if your future apartment’s past doesn’t faze you, this might be your budget-friendly hack.

Of course, there may be other reasons why a place is reikin-free. It could also be due to terrible neighbors, lack of air conditioning, or a rundown location. Always do your research—or risk dealing with some truly hidden costs.

South Korea: Jeonse System – Where you literally need a bank loan just to rent

Okay, so here’s the deal with renting in Korea—it’s not your typical “pay every month and forget about it” situation. Instead, they’ve got this system called jeonse, where you drop a huge lump-sum deposit (we’re talking 50 to 90% of the property’s value!) upfront. Yep, you heard that right—no monthly rent. The landlord takes that chunk of cash, invests it, and lives off the interest. Meanwhile, you get the whole deposit back at the end of your lease (usually 2 years), as long as you don’t turn the place into a disaster zone.

But wait, there’s more! Even though you’re not paying rent, you’re still on the hook for monthly maintenance fees (which can vary depending on how fancy your apartment is) and, of course, utilities. So, is it rent? Not really. Is it a massive upfront deposit that you’ll hopefully get back? Absolutely.

Alright, so you’re probably thinking, “If I’m taking out a bank loan just to cover the jeonse deposit, wouldn’t it make more sense to just buy a house instead?” Great point! But here’s the thing—with jeonse, you’re not paying the full price of the house. Plus, it’s all about flexibility. In Korea, a lot of people live with their parents until they tie the knot, and once they’re married, they might not have the cash to buy a place outright or even know if they’ll stay in one spot long-term. That’s where jeonse swoops in to save the day!

Now, sure, from an investor’s perspective, you could argue about opportunity costs and all that jazz. But hey, culture plays a big role here—Koreans see this system as a practical way to handle housing without being tied down. And let’s not forget the best part: you get your money back at the end! It’s like you’re lending your landlord an interest-free loan. They get to invest it and hopefully make some returns, while you technically live rent-free. Not too shabby, right? 

Now, jeonse used to be the cool kid on Korea’s rental scene, but it’s losing its shine. Enter weolse—the more familiar month-to-month rental system. Instead of dropping a huge deposit like in jeonse, weolse only requires a smaller deposit (around 5,000 won to 20,000 won) and a monthly rent—which, yes, you don’t get back. Sounds more like the rent you’re used to, right?

Before signing anything, double-check whether it’s jeonse or weolse, and go with what suits your budget and comfort level.

Switzerland: Renting comes with a special account (and a big deposit!)

Dreaming of a cosy Swiss home with breathtaking mountain views? Hold up—before you get carried away, you’ll need to deal with Switzerland’s strict rental system.

Here’s the deal: landlords open a special bank account for your security deposit, and it’s usually up to 3 months’ rent. This deposit stays locked up until your lease ends, minus any deductions for damages. Some lucky renters might get away with just 1 or 2 months, but 3 months is the norm and legal max.

And a pro tip if you’re moving to Switzerland: never hand over money upfront or pay a “landlord” directly. Deposits should always go into that special bank account. If you’re asked for a prepayment before even seeing the apartment, red flag! Scammers are everywhere, and you don’t want your rent money funding someone’s vacation instead of securing your home. Always visit the place first—your wallet (and sanity) will thank you!

Singapore – Stamp duty: Nope, not about stamps

No, this isn’t about collecting cool stamps. Stamp duty on rental units is a tax on tenancy agreements, and if you’re renting anything—a room or an entire unit—you’ve got to pay up. This fee goes straight to IRAS (Inland Revenue Authority of Singapore) and is calculated based on the total rent for your lease period.

Fun fact: Your lease isn’t even valid until stamp duty is paid. No stamp duty, no legally binding agreement. That means if things go south—like your landlord refusing to return your deposit—you have no legal protection. Yikes.

And if your landlord asks you to pay in cash? That’s a red flag for tax evasion. No matter how relaxed they seem, paying properly (and legally) protects you. Otherwise, you risk getting evicted with no warning or losing your deposit for good.

UK – Council Tax: Yes, you’re paying for those bins

So, you’ve found a place in the United Kingdom and now there’s this mystery charge called council tax. Who pays it? You—unless you’re a student or single tenant (lucky you).

You might be thinking, shouldn’t my landlord cover this? Nope. Because you’re the one using public services. Garbage collection, street maintenance, all the boring but necessary things—you’re paying for them.

Council tax is based on property value, not rental price, so check what band your place falls into. And yes, you might want to double-check where your money is actually going… because, well, government budgets.

Spain – The 11-month rental loophole

Curious about a 11-month lease in Spain? Well, landlords are just dodging rent control laws.

New regulations limit rent spikes to 3% per year and require landlords to pay agency fees. But here’s the trick—these rules don’t apply to temporary rental contracts (aka leases under 12 months). So landlords just… make everything 11 months long. Sneaky, right?

What’s the catch? These leases don’t grant you a permanent address, which can be a hassle for official paperwork. But don’t panic—there are still proper long-term rentals out there. Do your research, compare prices, join expat groups, and always visit the place before signing anything.

And remember, everything is negotiable.

USA: You pay for your own background check

Renting in the United States? Get ready to pay for your own credit and background check—because landlords don’t take chances. Before you even get the keys, they’ll want to see proof that you’re financially stable and not a sketchy character. And guess what? You’re footing the bill for it.

Now, before you start fuming, hear us out. These checks usually cost around $30 per tenant. Landlords go through tons of applications, so it’s not realistic for them to cover these fees for everyone. And while $30 might seem annoying, imagine the nightmare of dealing with squatters, evictions, or property damage—that’s way more expensive.

Think of it this way: It’s a small price to prove you’re a dream tenant. You get a home, landlords get peace of mind, and everyone wins. Well… except for people with questionable rental histories.

Australia – Bond lodgement: Show me the money (but not to your landlord)

Renting in Australia? Get ready to cough up a bond—usually four weeks’ rent—but don’t worry, it’s not going straight into your landlord’s pocket. By law, this deposit must be lodged with a government-approved bond authority, not held by the landlord.

Why? Because it protects both you and your landlord. If you keep the place in good shape and pay rent on time, you get your money back. If not, the landlord can make a claim against it. Simple.

When moving out, you’ll need your bond lodgement number to get your refund, so don’t forget to ask for it. If your landlord mysteriously “forgets” to give it to you, contact the Residential Tenancies Bond Authority (RTBA) to sort it out.

Brazil – Find a guarantor or pay upfront

Ever been told “Never be someone’s guarantor?”. Well, in Brazil, you’ll need to find someone willing to do that for you before you can even rent a place.

A fiador (guarantor) is someone who agrees to cover your rent if you stop paying. The catch? They must have perfect credit AND own property—oh, and they’re putting that property on the line for you. Not exactly an easy ask.

If you can’t find a fiador, be prepared to pay a hefty deposit—often the entire lease upfront, with only half of it refundable when you move out.

Not feeling that? There’s an alternative: seguro fiança, a rental insurance policy that acts as a guarantor. It’s not super common, but hey, it’s an option!

Before you go…

Managing rent money is tough—you need enough for yourself, but you also want to support family back home. What if you could do both without breaking a sweat?

With Instarem, you can! Great exchange rates and low fees mean sending money back is smooth, easy, and budget-friendly.

Give it a shot! Download the app or sign up here and make your next transfer a breeze.