Different Types of Korean Property Rent System

Different Types of Korean Property Rent System

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Korean Property Rent System

Jeonse (Lump-sum Deposit)

(Hangul: 전세; Hanja: 傳貰) is a real estate term unique to South Korea that refers to the way houses are leased. This type of rent system comprises of almost 50% of the total rental property market. Instead of paying monthly rent, a renter will make a lump-sum deposit on a rental space, at anywhere from 50% to 80% of the market value.

Jeonse involves the tenant giving the landlord a large sum of "key money" when a lease is signed. The amount of money required depends on the economy and the location of the property. Usually the amount required was 50% of the property's value, but can be as high as 60-80% or even 90% these days. The tenant is then allowed to stay in the property "rent-free", not requiring any additional monthly payments, until the end of the lease, which is usually 2 years. Utilities and other costs (water, gas, electricity, cable TV, phone, internet, and, security, so called Maintenance cost) are applied for and paid by the tenant.

The landlord makes a return by taking the deposit money and investing it and keeping all interest earned on the deposit. The tenant's deposit is protected by having a lien issued against the property for the amount given. Also, the tenant’s deposit is legally protected against mortgage if the date of lease agreement is prior to the mortgage.

The entire deposit is then returned to the tenant at the end of the lease. In rare cases where damage has been done to the property, the damage has to be fixed to the landlord's standard before a landlord will return the deposit.



Wolse (Monthly Rent)

This type of rent system is much similar to the usual monthly rent found in most of western countries.

During times of lower interest rates, wolse (월세), or monthly rent, is more often used. With a wolse lease, a renter signs a lease for 1 or 2 years and makes a deposit on the property equal to perhaps 10% of the market value. The renter then pays monthly rent.


Utilities and Other Costs (So called Maintenance costs).


Gas, electricity, water, internet, cable TV, telephone and internet bills are usually paid by tenants in both systems; Monthly rent and Lump-sum deposit rent. But, sometimes, these bills may be all-included in the monthly rent. (Not in Lump-sum Jeonse system). 


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