Korean Job Discussion Forums

[hagwonnewbie]

Given the poor reputation of Korean businessmen, is it risky giving key money to a Korean landlord. My gut instinct says yes. Have you heard any stories of foreigners getting shafted on key money ?

[mateomiguel]

I've heard that often you can't get your key money until after you move out and someone else moves into the apartment, giving more key money. The landlord doesn't actually keep it around, but uses it. Its risky enough that I've only ever lived in apartments that don't ask for key money.

[jackson7]

Can you trust an American bank with your money? Well, thanks to the FDIC, you can sleep a bit better knowing it's insured (until the entire system goes bust, at least).

In Korea you can register your key money with the government, and it's then insured in case the landlord does something less than ethical. Not sure where to get those forms, but my mate is doing just that this week.

[Juregen]

That is indeed how often the cookie crumbles.

They often buy a place on a heavy loan, lend it out with key money, pay of a big part of the loan with your key money and then they just let the key money go from hand to hand.

It seems to me that in Korea the "business men" prefer to outsource their risks to everyone else and try to run with the profit.

Which in normal business practices is absurd, the one who runs with the money should be the one running the risks.

I absolutely abhor the concept of key money, especially when key money represent more then 10% of the house value.

[mateomiguel]

yah, the entire concept of key money is ludicrous. Especially when nobody has the money to begin with. You take out a loan from a bank to give to another guy, but you don't pay for anything. This is just collateral. So then you pay interest on the loan for the key money you gave as collateral. The other guy doesn't actually profit from the money, he gives your key money to the previous tenant to pay off his key money deposit, and then the landlord has nothing special except extra low rent from you.

In theory the interest from your key money is supposed to offset your rent payments, but since the landlords usually transfer key money from current tenant to previous tenant they don't get any extra interest. So they're screwed, you're screwed, the previous tenant might be screwed if it took a long time to give him the key money back, and the only person who isn't screwed is the bank. Because they know that people have to take out $60,000 loans all day every day just to find a place to live and pay them interest on that for basically forever.

[hagwonnewbie]

[Hanson]

[ajuma]

You can find housing, particularly in university areas, where you pay for the year, with maybe 1 or 2 million deposit.

Go to a realtor and see what you can find, or if you want to do it yourself (and you can read Korean or have a Korean friend to take with you,) you can look around uni areas and look for signs in the apartment entrance or on board put up for that purpose, or talk to the apartment management office.

[jellobean]

It can also help to find out how much equity the landlord has in the building (or how many liens against the building). They are supposed to show you this when you sign the lease. I felt okay putting down my key money because my landlord pretty much owned the building with only a few small loans against it (no big bank loan). Also, it's good to know you might have to wait a few weeks when you move out to get it back.

With smaller, non-apartment places, you can sometimes just put down the year's rent up front and they will take that instead (especially when that is enough to pay of the previous tenants key money).