Korean Job Discussion Forums

CabbageTownRoyals · Joined: 14 Sep 2006

Hi.
OK. I'm considering putting down a large sum as a deposit (jeon-se) in order to avoid paying rent. I'm not really saving now by paying rent and I do have some savings in Korea since the exchange rate is so bad for NZ I haven't been sending it home....
However, it IS a risk here in Korea and I've heard of horror stories of people not getting their deposit back. Would you do it? I'm talking about 40 million won deposit.

(obviously my job doesn't provide accommodation)

Ilsanman · Joined: 15 Aug 2003 Location: Bucheon, Korea

Make sure you have a Korean on your side who is willing to do some foot work. It's not as risky as you think.

maddog · Joined: 08 Dec 2005 Location: Daegu

On an E2 visa (read temporary guest in Korea) there's no way I'd put down that amount of money. NO WAY!

That amount of money could earn you $4K a year in a high interest acct.

Ilsanman · Joined: 15 Aug 2003 Location: Bucheon, Korea

10% a year? That's super high.

Yaya · Joined: 25 Feb 2003 Location: Seoul

People who do jeonsae are now better protected than ever. I hear that you can take over the property if the landlord fails to give back your key money within a specified period of time, but I'm not sure exactly about the details.

I have a NICE pad of 31 pyong that I am paying 600,000 won for with 40 million won down. Just get your leasing agreement stamped at the nearest district court having jurisdiction over your area.

In many cases, you might have to wait until the place is taken by another person, in the classic "rob Peter to pay Paul scheme."

maddog · Joined: 08 Dec 2005 Location: Daegu

CabbageTownRoyals · Joined: 14 Sep 2006

CabbageTownRoyals · Joined: 14 Sep 2006

Hanson · Joined: 20 Oct 2004

pesawattahi · Posted: Mon Jan 07, 2008 3:17 am Post subject:

What town are you getting your apartment in?

big_fella1 · Joined: 08 Dec 2005

Change your money into Chinese RMB (Yuan) then change to US dollars just before the Olympics, buy a bank foreclosed house in the US and sit on it for a while.

I am not authorised to provide financial advice in any jurisdiction and AMEX does have a hit man looking for me, so take it for what it's worth.

On a serious side I have heard you can get a credit check on your landlord before stumping up the deposit and I would seriously pay some money to speak to a lawyer (but I think w40 mill is a bit of money and I am paranoid).

The embassy should be able to guide you to an English speaking lawyer.

Good luck!

Juregen · Joined: 30 May 2006

40.000.000 on a 4% intrest rate would net you 1.600.000.

1.600.000 / 12 = 133.333

So as long as your rent is higher then 133.333 won, you make a profit.

Ofcourse interest rates can change, but do your own math.

After that you include a risk assessment....

Cheonmunka · Joined: 04 Jun 2004

If you are in Seoul or a big city then 40 million is too cheap.
If the chonsei is too cheap a record check on the landlord, this check offered by the dong office, might show you for example that they owe money on it and are waiting to foreclose so the bank gives them the market value of the actual property, leaving you to have to pay that price- or lose or at the very least have big problems securing your original chonsei money. That's one thing that was pointed out to me by my father in law, an agent himself, when looking at chonseiing a certain villa some time ago. The people would have had no trouble letting that happen - putting us in dire straits. The first in-line status if a landlord goes belly up means not just a payout to you, but if things are black you have to fit the bill. There are tricks and you might have to interpret the credit check statements yourself. It's not that easy I think and you have no choice but to trust what people are telling you.
Registering your chonsei at the office gives you first in-line (if you are the only tenant) status when the landlord's assets are divided. It doesn't secure you beyond that. There's no instant cash payout. Also, being first in line is not necessarily a good thing when people come looking to you with their hands out. Hey, I'm being negative - It's a skill I have to protect me from financial ruin. I, no, my wife chonseis, too, but it's not all our eggs in one basket. (It's funny, on the reverse side of what you want to do, most of my money goes to a NZ mortgage.)
On another note about what landlords actually do with chonsei: Landlords often use chonsei to buy the place, as the chonsei deposits give instant equity for their bankloans. So, your chonsei money is tied up in the mortgage and ownership of the property. If the house to buy is 300k, you have 100, tenants paid 100 in chonsei, you only need to borrow 100 to buy the 300k building and your interest is lower than would be if you borrowed 200. It's a good way to raise equity and a good way to reduce costs. Maybe we Kiwis should all get together, unite some money, and purchase a residential theme building calling it NZ House and charge tenants a little higher chonsei or wolsei for a chance to live in such a 'village.'
Ech. If it were me, single and on an E2 I wouldn't do it. I'd pay a small entry deposit and wolsei an office tel.
Also, NZ trading banks are offering a very secure 7.5% for long term deposits. It's not hard to get 10% in NZ at the moment - that's why the exchange rate is so damned high.

kiwiduncan · Joined: 18 Jun 2007 Location: New Zealand

Cheonmunka · Joined: 04 Jun 2004

Hi Duncan, I think you hit the spot with most of us about security having money in NZ. I mean, in NZ all trading bank deposits are govt. insured. Deposits in Korean trading banks are secured only to 50 million. What does that tell us?

I have heard of cheapish rents in and around Itaewon etc. My bad.

xrate was 724 yesterday. I don't worry about it too much. My wife hates it, but filling up in NZ for the future is what I want to do.