Korean Job Discussion Forums

[edwardcatflap]

so it does sound like a ponzi scheme

[motiontodismiss]

[Lazio]

[Yaya]

I paid off all of my debts years ago so I have money to play with. Jeonsae is the best way for housing in my case because otherwise, I'd pay at least 8 million won in rent per year. I'd rather save that money for a rainy day.

And interest rates in Korea have dropped a lot over the years, which is why landlords prefer monthly rent. The reason jeonsae has skyrocketed is because of low rates, but if you do a simple credit check on both the property and the landlord, you can weed out the potential pitfalls like I did. My landlady has no debt and her property was left to her by her late mother.

[Michael_75]

If this is a troll attempt, then it's pretty pathetic.

If not, and you do earn that much and have that much to spend on property, then why on earth would you be asking people on this site for advice? ESL/EFL is a notoriously poorly paid paid profession, and most teachers will never find themselves in a similar situation to yours. Or, they might, but by that point they will no doubt have outgrown this board and its low-rent concerns.

I would hope that as a result of your (relative) affluence you would have at least a basic understanding of finance etc. If not, you should be consulting a professional, not the under-researched assertions of "teachers".

[edwardcatflap]

[TheUrbanMyth]

[edwardcatflap]

[Zyzyfer]

[Unposter]

Jeonsae is like a mortgage without the bank (directly), except that you get your money back when you change houses.

With a mortgage, you borrow the value of the house from the bank, pay the owner and then pay interest plus the value of the loan to the bank.

With jeonsae, you give the owner of the house, traditionally, half the value of the house, which the owner refunds when the contract expires.

You get the advantage of securing the residence for less than the actual value of owning.

The owner gets the advantage of temporarilly recovering the value of the residence while someone else uses it. The owner can than use that money to pay off debt or to invest it - either way - payoff debt: you get the money you would otherwise pay in interest - invest: you can make the interest (the opportunity cost of the value of the residence) back.

Think about it as banking before there were banks (in a Western sense) or just a private agreement that doesn't require a mortgage.

Now, these days jeonsae prices are going up. This may or may not be because the owner is debt. It has more to do with market correction. Traditionally, jeonsae was at about half the value of the residence but as residence prices have increase dramatically, jeonsae prices have not caught up. As demand for jeonsae has increased (people are afraid of buying), jeonsae prices have increased with the demand. This will probably continue until there is an equilibreum between the costs of buying and the costs of renting.

If you wish to rent or make a jeonsae deposit, find out the value of the apartment, half-it, and multiply it by the amount of interest you think someone could reasonably get with that money. That is roughly what you should pay in rent or in lost opportunity cost in a jeonsae deposit.

Please also make sure you are giving the deposit to the rightful owner of the residence (sometimes doesn't happen) and that the rightful owner is not in too much debt (the bank gets their money before you do if the owner goes bust). You should also make sure the local and appropriate government offices "confirm" the agreement.

[chachee99]

My housing allowance is more than the cost of my rent. Good news for me.

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[brier]

Just did the math. After taxes I pay 31 percent of my steady monthly income in rent. It's too much I know but I have a kid and want him to live in a place with sunshine, a breeze and quiet.