Korean Job Discussion Forums

[Ilsanman]

I don't know everything there is to know about owning property, but I ask a lot of questions and I have learned a lot.

My wife's uncle just bought a small place to rent out. We might move in. I was a little surprised to hear the numbers involved. He paid about 77 million won ($90,000 Canadian I think) and he plans to rent it out for 300,000 a month. I thought that was so low for how much he paid. We bought a house in Canada for 130 million won ($150,000 CAD) and we rent only half of it for $500 a month)

I did a little math in my head, and let's say the uncle fixes up the place a bit. He pays $1500 to fix up some defective things, and that's 5 months of rent right there. In Canada, that might be 2-3 months rent only.

This is the way I see it, the pros and cons of owning property here and at home.

Korea:
Pros: Low property tax
You can collect key money
Value goes up if someone so much of starts a rumour of redevelopment or new town being built
Smaller and easier to renovate.

Cons: Unstable market (I think)
Rent is so low as compared to price


Canada (or other western country)
Pros: Cheaper as compared to size, except in cases of very large cities.
A better long term investment
Can collect a much higher amount of rent, usually nearly as much as the mortgage payment
More than likely, was built better

Cons: High high property tax (ours is $2200 a year for a house worth $160,000)
Higher cost to renovate or fix up


Overall, I'd have to give the advantage to the western country. The biggest thing is, if I shell out $150,000, I want something more than a box in a building, only 2 m away from the guy who beats up his wife on Saturday nights. I want a yard, I want a garage, and I want a driveway.

Any thoughts on this?

[Hanson]

I've been thinking about buying property back in Canada, but doing so, as far as I can tell, would be considered a primary tie - which in turn would make you a resident. As a resident, your wordly (Korean) income would be taxable by Revenue Canada.

That's a deal breaker for me.

[rocklee]

The house itself is really cheap!

And :

[Homer]

Own property in Canada and in Korea......

A lot of similar benefits but some big differences in how each property is bought, paid for and maintained. Then again I own a building (duplex) in Canada and an appartment in Busan.....so as a rule there are many differences in both property types.

As for this..

[Ilsanman]

Maybe our place in Canada is not so common. We got it for $150,000, but the realtor valued it at 160. Since then (Last year we bought it), it has gone up to maybe 170.

I figure if I had 70 grand or so to buy a small place, I'd sooner not. With rent on places in this area being only 250-300 a month, it's not even 10% of our combined income. It's not worth it.

When I said better built, I was referring to these shitty Korean buildings that look like total trash after only 15 years. My place in Canada is over 30 years old but still in excellent shape.

On a place as small as what the uncle bought, the key money won't be more than 5 million. I doubt he can make a lot of interest on that.

[Juregen]

THe reason why people in Korea buy propert is for the speculative value, everyone assumes that prices go up faster then any other investment.

Which ofcourse is bollocks, it is just hat an area can become "popular" all of a sudden and speculative investors by the property pushing prices up, and then selling of to the suckers who believe it will still go up .

Rent is not considered an income, merely a way to cover the cost of maintenance.

[poet13]

"I've been thinking about buying property back in Canada, but doing so, as far as I can tell, would be considered a primary tie - which in turn would make you a resident. As a resident, your wordly (Korean) income would be taxable by Revenue Canada.

That's a deal breaker for me."

I second that.

[Homer]

Good point about buildings here I-man.

However this is because of the market and of the construction/modernization drive. So0 when buying here you do not look to 30-40 year investment. Think shorter term and longer term back home.....you then win both ends.

Our place home nearly doubled in value due to the explosion of realestate values in recent years. Taxes have also gone up however.....

Our place here as gained value in the couple of years we have owned it and we fully intend to sell it in the near future to buy a better place.....You just have to keep tabs on the market here and know when to sell....

[Aussiekimchi]

I bought a "house" here quite cheaply and about a month later those "new city" rumours hit. The price skyrocketed. As the market does seem to be unstable I am looking to sell now and take my money and run.
I did find though that the rent I get from my tennants did basically cover the mortgage payments.
I am looking to buy something back home also and my lord the taxes are high also!
The property market though seems to be much more stable...so sell we will...any ideas on how to get that much $$ back home without getting taxed?

[Ilsanman]

I have a unique deal back home. My parents have put the 2nd house in their name and they are using it and maintaining the tenants while we're here. It gives them a tax break too, since they're using the house for a business.

As long as there is another area where the prices are not skyrocketing, then it's prudent to sell. If they're skyrocketing everywhere, don't sell. You still need a place to live.

[xingyiman]

[Ilsanman]

Well if you ever change your mind, maybe you can get someone back at home (preferably family) to put it in their name.

We did so before we go back because the housing prices are going up fast, and we can get a jump start on the payments.

Also, if we dicide we don't want to live in that city, we should make at least some profit off of re-selling the house.