other information
Showing posts with label other information. Show all posts
Showing posts with label other information. Show all posts

Different Types of Korean Property Rent System


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). 


Tage: property rent in korea, property rent in seoul, wolse, jeonse, 보증금, 전세, 월세, 반전세, 관리비, maintenance cost, property in seoul, property in korea, lump sum deposit, key money, seoul apartment for rent, seoul house for rent, property for rent in seoul, property to rent in seoul, property for rent in korea, Seoul real estate, korea real estate, housing in seoul, housing in korea, real estate agents in seoul, real estate agents in korea, seoul residential real estate, seoul location, property korea, property seoul, flats in seoul, flats in korea, relocation seoul, relocation to korea, hannamdong, itaewon, un village, foreigner house korea, rent property korea, rent propery seoul, rental property seoul, rental property korea, housing cost korea, housing office, expats seoul, expats korea, 외국인렌트, 외국인 임대, 외국인 부동산, 주재원 부동산, 대사관 부동산, 대사관저, 서울 외국인, 유엔빌리지, 한남동 부동산, 이태원 부동산, 외국인 학교, 외국인 월세, 외국인 전세
Read More

Why The Hell is So Much Deposit Required for Rental Property in Korea?



Okay, I've heard loads of complaints that the deposit required to rent a residential property is considered to be ridiculously high in Seoul. Sometimes, you may be asked
to make an advance payment for the entire contract period in order to avoid this lump-sum deposit. Trust me, it's got nothing to do with discrimination or whatsoever.

This is a practical question, and it needs to be explained before your anger
explodes.The reason is, it's very difficult to evict tenants whose rents have fallen into arrears. It usually takes at least 6 months or sometimes up to 1 or 2 years to evict tenants with rents in arrears, depending on the speed of the court work process.

What's more, as you may already know, most of Korean residential properties are apartments. And living in an apartment incurs another cost known as Maintenance Fee
which comprises utilities bills, cleaning of common use spaces, security and so on.
Those tenants with so many other bills to pay usually ignore this maintenance fee, and this becomes the landlord's debt. The landlord cannot have another rent contract until the maintenance fee is fully-paid. An average maintenance cost for a 3 rooms-apartment is about KRW 200,000~300,000 per calendar month (USD 200~300  PCM).



So, in landlords' point of view, what they lose from having such tenants is not only the monthly rent foregone but also the maintenance fee they have to pay instead of tenants. This is why landlords sometimes ask for 2-year-rent worth deposit. 

And the last one, the type of rent could be Ban-Jeonse, which literally means "half-Jeonse" and in this case, the deposit required may be high while the monthly rent can be much cheaper than that of normal Wolse. If you do not know much about Korean Property Rent System, you can find the information about it in this blog.

Since the amount of deposit is quite much, you may be worrying if your deposit is safe. 
I'd like to advise you that your money is safe. If you registered your moving-in at the community service center, then, your deposit is protected by Housing Lease Protection Act. The deposit will be fully-refunded upon termination of lease unless you had damaged the house too much or set fire to the property

Don't get frustrated if the property you have in your mind requires too much deposit.
There's always a chance for negotiation. So, what you need to do is "ASK" first.


tags: deposit for rental property, deposit seoul, deposit korea, property rent system, seoul apartment for rent, seoul house for rent, property for rent in seoul, property to rent in seoul, property for rent in korea, Seoul real estate, korea real estate, housing in seoul, housing in korea, real estate agents in seoul, real estate agents in korea, seoul residential real estate, seoul location, property korea, property seoul, flats in seoul, flats in korea, relocation seoul, relocation to korea, hannamdong, itaewon, un village, foreigner house korea, rent property korea, rent propery seoul, rental property seoul, rental property korea, housing cost korea, housing office, expats seoul, expats korea, 외국인렌트, 외국인 임대, 외국인 부동산, 주재원 부동산, 대사관 부동산, 대사관저, 서울 외국인, 유엔빌리지, 한남동 부동산, 이태원 부동산, 외국인 학교, 외국인 월세, 외국인 전세
Read More
Subscribe to: Posts (Atom)