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Korean Job Discussion Forums
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alongway
Joined: 02 Jan 2012
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 Posted: Mon Mar 05, 2012 9:23 pm Post subject: |
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| I think jeonse is good if you do your homework for the next few years. If there is a burst coming, it's better to do jeonse for a few years and wait for the price to tumble. So long as you're getting it from someone who can actually cover the jeonse if the market falls. You're probably not going to get 12% on anything you invest, so you're better off trying the money up in a secure and insured jeonse. Save your money, if there is a crash, get something on the cheap, because even if there is a crash, prices will go back up again. Real estate is a long term game. |
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Weigookin74
Joined: 26 Oct 2009
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| Posted: Mon Mar 05, 2012 10:01 pm Post subject: |
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| schwa wrote: |
| Weigookin74 wrote: |
| I thought if you register the payment at a local dong office, you have to legally get the money back. Also, if you insure the money that ought to cover you. Interest rates are low, so you wouldn't make much money on this deposit anyways. So, it's actually a better deal for you to deposit money and have either low rent or no rent. Unless, they simply raise the Jeonse to compensate for that fact. |
Registering your deposit is prudent but what that provides is a degree of assurance, not insurance. Also, the amount is capped. Varies by city but generally maxes out around 30 million. Key thing (best indicator) is to always make sure the owner isnt already in hock to others. Its on public record. |
Where do you check their record or debt levels? Also, where do you get this insurance? From a bank? Is it expensive to pay the premium every month?
I'm in a regional city in a new villa, but only have paid about 3 Mil but would cost 10 Mil in Seoul? Just a studio or one room as they are called. But I never registered the payment. But, it's not like I'll be out a lot if I lost it. But 10 Mil to 100 Mil or more, yikes! Maybe it would be good if someone can outline the procedures here for these things. |
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Tue Mar 06, 2012 12:20 am Post subject: |
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| meangradin wrote: |
One of the English papers recently ran a series of articles about how per capita debt in Korea has almost doubled over the past four years, with most of this debt tied to the increase in housing costs; quite scary if those, like myself, expect a crash.
For this reason, I bought an older apartment in a quieter and more rural (thus undesirable) location and had it renovated with high quality materials - Italian wood kitchen cabinets, top of the line build ins, and so on. Personally, I don't really care how nice my elevator or parking garage is, but I do care about the quality of the interior of my apartment.
In Ulsan, there are signs that cracks are appearing in the housing market. Anything in the 40-50 pyg. area can be had at a discount, but the price of the smaller units (28-34 pyg) is very stable. |
I like your thinking. You bought an apartment and made it nice because you plan to live in it. So many Koreans bought apartments (a great many with borrowed money) and they had no intention of ever living in them. |
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Unposter
Joined: 04 Jun 2006
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| Posted: Wed Mar 07, 2012 4:26 am Post subject: |
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Weigukin 74,
Sorry to sound vague because I just don't really remember anymore. You can find your landlord's tax information online (I believe there is a government website you can go to). Your real estate agent may have that information for you or he or she could point you in the right direction.
You should register your deed at the local dong office. They probably can offer you insurance as well (there may be a limit to how much they will insure).
Please also make sure that your "landlord" is legally the owner of the place. Sometimes they aren't, which is illegal, but it is one of the many strange grey areas of Korean real estate.
Like any major transaction, I would strongly recommend having someone who knows what he or she is doing look over the contract before you sign anything. |
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fosterman
Joined: 16 Nov 2011
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| Posted: Wed Mar 07, 2012 5:34 am Post subject: |
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| Poker wrote: |
http://www.koreatimes.co.kr/www/news/biz/2012/03/123_106294.html
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It is now possible to buy an apartment with less than 100 million won investment in Seoul, which has been notorious for its high real estate prices, a local property information provider said Monday.
The secret is buying an apartment with �jeonse� tenants and only paying the difference between the cost of renting and buying an apartment. That way people can own an apartment although they cannot reside there. |
What is the take on this? One can't live in the apartment but owns the property... |
OK, so the apt is 400 million won lets say..
there is a tenant currently living the house and has paid 200 million won for free rent living, the owner of the house wants to sell to you for 400million won. so you give the owner 200 million won in your cash, and he gives you the house, now of course you still owe 200 million to the tenant who is living there rent free. now when the tenant leaves, you just find another tenant and give the previous tenant the new 200 million.
now of course you are not making any money on the house, so the ownership tax you must pay every year, which can be a couple million won a year, now of course you are hoping your new house increases in value over the next couple years so you can flip it and turn a profit.
because remember while you own this house, you dont live there, so you live elsewhere, paying rent? and you have now just invested 200 million won into a house which doesn't make you anything back. NO ROI! unless the house increases in value.. quickly...
it's good for rich people I guess..well of course.. life always benefits the rich. you got money, you make more.. |
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alongway
Joined: 02 Jan 2012
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| Posted: Wed Mar 07, 2012 5:53 am Post subject: |
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| Quote: |
| and you have now just invested 200 million won into a house which doesn't make you anything back. NO ROI! unless the house increases in value.. quickly... |
It saves you bank interest on borrowing that money.
If you can increase the jeonse, you can make your own interest on that.
It's not uncommon for people to add a little to jeonse every couple of years. If you've got 200 million, make it 220 2 years later. That 20 can now be put to work for you.
the danger is if the market crashes and you can't get 200 mil for your jeonse anymore. Oops.
Then you're screwed. |
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Unposter
Joined: 04 Jun 2006
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| Posted: Wed Mar 07, 2012 5:21 pm Post subject: |
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| Well at least you now know why Jeonsae prices are increasing. |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Thu Mar 08, 2012 1:26 pm Post subject: |
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| alongway wrote: |
| Jeonses can be insured so if the owner loses all his money you will get your money back. The jeonse system is in fact actually quite useful. The bigger the jeonse the more homework you should before paying it, but there is a lot to be said for living rent free. |
Whilst you can register your Joense at the local Supreme Court Registry Office (they're everywhere), to my knowledge you cannot insure it.
By registering Jeonse you become the third inline to be paid after the government, and any mortgage holders. It is still possible that you won't be paid.
If you know of an insurance scheme other than this please tell me, as I haven't found it yet.
You are right about homework being the key, you need to do full credit checks on any landlord, and ensure that the landlord actually owns the property before paying the cash. Checks can be done by the real estate agent.
I know that many Koreans have built there wealth by not paying monthly rents, but I wouldn't put any money down for Jeonse in the current market as I believe property prices will fall and that it's going to be ugly.
Swampfox10mm I wonder of your friend took legal advice, I was told stay put until you get your Jeonse money or do a deal to buy the property, although due to the racism of all financial institutions in this country that could be difficult. |
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