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Korean Job Discussion Forums
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ed4444
Joined: 12 Oct 2004
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 Posted: Wed Jul 13, 2005 3:41 am Post subject: Confused about Renting system for Korean Apartments |
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I just talked with a friend of mine about it and now I am more confused than before.
She wants to find a tenant for her apartment. The key money is 30,000,000W with no rent.
So i asked how much profit she would make by keeping the money in a bank for a year. With current interest rates it would be about 400,000W.
It seems a very pointless system. The profit is negligible. It probably makes more sense just to leave the apartment empty and not have any wear and tear.
Does anyone understand the merits of this system and why the Koreans have not changed it since the bank interest rates got low? |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Wed Jul 13, 2005 4:01 am Post subject: |
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| The value of the apartment itself increases through things like speculation and shortages of housing. |
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inkoreaforgood
Joined: 15 Dec 2003
Location: Inchon
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| Posted: Wed Jul 13, 2005 4:02 am Post subject: |
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| Others often take the key money and put it in some kind of short term invesments. The system here is slowly switching to a monthly rent scheme, with a small key deposit sum. |
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ed4444
Joined: 12 Oct 2004
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| Posted: Wed Jul 13, 2005 4:47 am Post subject: |
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| Are there often disputes about key money at the end of the contract? |
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rapier
Joined: 16 Feb 2003
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| Posted: Wed Jul 13, 2005 6:42 am Post subject: |
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| ed4444 wrote: |
| Are there often disputes about key money at the end of the contract? |
After working in a hagwon, theres ZERO chance of my handing over tens of millions of won to a Korean, over any pretext whatsoever.
I can just imagine it: "here's one million for now, we'll pay you the rest when we get it. Don't you know? Korea has bad economy". |
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Goodgoings
Joined: 27 Mar 2003
Location: Seoul
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| Posted: Wed Jul 13, 2005 3:26 pm Post subject: |
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| ed4444 wrote: |
| Are there often disputes about key money at the end of the contract? |
I'd be really interested in hearing about the realistic dangers of putting down a large sum of money without rent. I'm going to move to Seoul in a few months and I won't be working under a hagwon so I'll have to provide the housing myself. I plan an staying in Korea for several more years so this "chun-say" money option seems viable. I've heard some lawsuits are pending against shady landlords, but it seems the percentage of people screwed are alot less then people who experience no problems with it. I also heard good research hedges your bet against it.
Questions:
1. What exactly and how do you research the landlord?
2. In your opinion, how safe is "chun-say"?
3. Do you think that putting down a little key money with monthly rent is better? I've heard the rooms are slightly better if you were to pay monthly.
Thanks
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Dawn
Joined: 06 Mar 2004
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| Posted: Wed Jul 13, 2005 3:42 pm Post subject: |
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Questions:
1. What exactly and how do you research the landlord?
There are private companies available to research the landlord and insure your chun-say.
2. In your opinion, how safe is "chun-say"?
I've got a friends who lost 110 million won when their landlord went bankrupt. They had done all the "right" research, and the money was supposedly guaranteed. The landlord, however, got tangled up in the speculation frenzy, lost his rear, and ended up in jail over some of his shenanigans. Apparently, if your landlord engages in criminal activity in the process of losing your chun-say, all insurance is nullified. (And this wasn't one of those sock-it-to-the-dumb-foreigner deals. All the Koreans in the apartment complex lost their money too.) |
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JongnoGuru
Joined: 25 May 2004
Location: peeing on your doorstep
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| Posted: Wed Jul 13, 2005 4:24 pm Post subject: |
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| Dawn wrote: |
Questions:
1. What exactly and how do you research the landlord?
There are private companies available to research the landlord and insure your chun-say.
2. In your opinion, how safe is "chun-say"?
I've got a friends who lost 110 million won when their landlord went bankrupt. They had done all the "right" research, and the money was supposedly guaranteed. The landlord, however, got tangled up in the speculation frenzy, lost his rear, and ended up in jail over some of his shenanigans. Apparently, if your landlord engages in criminal activity in the process of losing your chun-say, all insurance is nullified. (And this wasn't one of those sock-it-to-the-dumb-foreigner deals. All the Koreans in the apartment complex lost their money too.) |
It's very important that these kinds of stories make the rounds. I know plenty of Koreans who, while not actually losing all their money, either had to settle for the best the landlord could do at the time and then pray that the rest would be forthcoming, or who had no choice but to stay put until the landlord found another tenant. It can take a month, it can take a year -- who knows! How are you supposed to tell grad school in the States to "hang on for a few months until my landlady coughs up the 50 million won she owes me"? I've seen overseas study plans ruined, marriages delayed and lives massively disrupted, all thanks to the chonsei system.
Yes, chonsei does make sense in some cases for some people, but you've got to be forewarned and prepared to deal with the "what ifs", the unexpected delays, the craftiness, the sob stories, the song-&-dance explanations -- Ideally, you've got to have more flexibility in terms of your life's plans and have a thicker stomach lining that most foreigners living in Korea possess. Exceptions are if you're with the US military, foreign embassies or your employer is a big, ugly multinational that has the resources and manpower to ride out the nastiness while you go on life's merry way (i.e., if it ain't your money you're putting at risk).
Those "private companies available to research the landlord", they're good up to a point. But what you really need they don't offer: superior mind-reading and fortune-telling abilities.
| rapier wrote: |
| ed4444 wrote: |
| Are there often disputes about key money at the end of the contract? |
After working in a hagwon, theres ZERO chance of my handing over tens of millions of won to a Korean, over any pretext whatsoever.
I can just imagine it: "here's one million for now, we'll pay you the rest when we get it. Don't you know? Korea has bad economy". |
How about me, Rapier? You can trust the Guru, I hope. Although I've never done a chonsei arrangement, my wolsei+bojeunggeum and kkalsei records are spotless!  |
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