RANTING/VENTING MEGATHREAD 3.0

With 240,000,000 KRW, with that kind of capital you would be able to easily buy a 500,000,000+ home, so I don't follow why you would simply park that money.

What was the upside/downside?

If you wanted to remain in your current place, why not take out a 90,000,000 note, which would only be 37% of value.

Surely, you could easily find a bank that would do that, no?

We've been doing Jeonse in our current place for 3 years now (contract ending next March) and heard today that the Landlady who bought it 1 year ago wants to sell up.

We moved in paying 240 million. The Landlady after we were there for 2 years sold it on and we stayed on as tenants to the new Landlady but our Jeonse increased to 290 million. Now, she wants to sell it for 330 million. Absolutely maddening prices!

Totally gutted that we didn't buy the place rather than taking out Jeonse as 240 million seems like a steal now. Would have made almost 100 million profit.

You paid 240 million for jeonse but you had the option to buy for the same amount. I don't quite understand, but that is an insane amount. Curious if this is in Seoul, some other metropolis, or a smaller area?

I think the actual cost to buy was 250 million (yeah, Jeonse was almost the same) but we were not looking to buy at that time. Since then lots of new developments have popped up in our area and more are being built, which I guess are driving up prices.

Edit: Not Seoul but Anyang area of Gyeonggi.

With 240,000,000 KRW, with that kind of capital you would be able to easily buy a 500,000,000+ home, so I don't follow why you would simply park that money.

What was the upside/downside?

If you wanted to remain in your current place, why not take out a 90,000,000 note, which would only be 37% of value.

Surely, you could easily find a bank that would do that, no?

We are not that rich and most of our Jeonse is through bank loans. It's a gamble to park your money in an area that you hope will rise in value. Our apartment is at least 20 years old but prices seem to keep rising.

Yeah, it would be "easy" to increase the loan from the bank but we could move into an area 15 minutes away for the same 평 size and far less price than the 330 million our apartment is going for now.

Day 3 of my strict diet.

I'm hangry and hate everyone and everything. 

We've been doing Jeonse in our current place for 3 years now (contract ending next March) and heard today that the Landlady who bought it 1 year ago wants to sell up.

We moved in paying 240 million. The Landlady after we were there for 2 years sold it on and we stayed on as tenants to the new Landlady but our Jeonse increased to 290 million. Now, she wants to sell it for 330 million. Absolutely maddening prices!

Totally gutted that we didn't buy the place rather than taking out Jeonse as 240 million seems like a steal now. Would have made almost 100 million profit.

You paid 240 million for jeonse but you had the option to buy for the same amount. I don't quite understand, but that is an insane amount. Curious if this is in Seoul, some other metropolis, or a smaller area?

my god .... you paid 240 mil for jeonse?

putting that money in index funds - which usually average 7-8% per year - would have netted you a return on investment of around 17 to 19 million Won. per year.

You gotta live somewhere, Kobayashi. Plus, the money's on loan for a specific purpose. That probably would have violated the terms of the loan to invest the money.

yeah i know. of course you can't take out 240 mil in loans from the bank and just invest it.

i was using it more as an illustration of how much the jeonse system can be a rip-off.

We've been doing Jeonse in our current place for 3 years now (contract ending next March) and heard today that the Landlady who bought it 1 year ago wants to sell up.

We moved in paying 240 million. The Landlady after we were there for 2 years sold it on and we stayed on as tenants to the new Landlady but our Jeonse increased to 290 million. Now, she wants to sell it for 330 million. Absolutely maddening prices!

Totally gutted that we didn't buy the place rather than taking out Jeonse as 240 million seems like a steal now. Would have made almost 100 million profit.

You paid 240 million for jeonse but you had the option to buy for the same amount. I don't quite understand, but that is an insane amount. Curious if this is in Seoul, some other metropolis, or a smaller area?

my god .... you paid 240 mil for jeonse?

putting that money in index funds - which usually average 7-8% per year - would have netted you a return on investment of around 17 to 19 million Won. per year.

Am I wrong in thinking that jeonse is usually paid using a bank loan? Me and my husband have a jeonse apartment for 190 million in Busan. We paid a 40 mill deposit and the rest is a loan that we pay interest on (a few hundred k per month). We will repay the loan when we leave the apartment and get the jeonse back. In my experience it's an awesome win-win way for everyone - I get a sweet apartment for 350k "rent" every month, the landlord invests the jeonse to get interest, and the bank gets to reap interest on a relatively low-risk loan. Wish they had this system back in the states.

Do you mind posting some pictures of what 330,000,0000 gets you in the outskirts of Seoul.  I've been to Anyang, some parts are nice, but other are shitholes and filthy.  Just wondering if 330,000,000 gets you into the nicer areas.  Cheers.

We've been doing Jeonse in our current place for 3 years now (contract ending next March) and heard today that the Landlady who bought it 1 year ago wants to sell up.

We moved in paying 240 million. The Landlady after we were there for 2 years sold it on and we stayed on as tenants to the new Landlady but our Jeonse increased to 290 million. Now, she wants to sell it for 330 million. Absolutely maddening prices!

Totally gutted that we didn't buy the place rather than taking out Jeonse as 240 million seems like a steal now. Would have made almost 100 million profit.

You paid 240 million for jeonse but you had the option to buy for the same amount. I don't quite understand, but that is an insane amount. Curious if this is in Seoul, some other metropolis, or a smaller area?

my god .... you paid 240 mil for jeonse?

putting that money in index funds - which usually average 7-8% per year - would have netted you a return on investment of around 17 to 19 million Won. per year.

Am I wrong in thinking that jeonse is usually paid using a bank loan? Me and my husband have a jeonse apartment for 190 million in Busan. We paid a 40 mill deposit and the rest is a loan that we pay interest on (a few hundred k per month). We will repay the loan when we leave the apartment and get the jeonse back. In my experience it's an awesome win-win way for everyone - I get a sweet apartment for 350k "rent" every month, the landlord invests the jeonse to get interest, and the bank gets to reap interest on a relatively low-risk loan. Wish they had this system back in the states.

Similar to us. 50 million was our own money. 190 million on loans. We pay 500k in monthly interest back to the bank. It is a nice system but also one that could come down like a house of cards.

Wow.

The numbers being thrown around are crazy.

Where have I been?

The standard used to be 10,000,000 KRW for every 100,000 KRW in rent.

Meaning, if the place had 100,000,000 deposit only option, you could substitute monthly for whatever portion of the deposit you didn't have.  If you only had 10,000,000 down, you would pay 900,000 a month in rent, or 50,000,000 down and 500,000 a month, etc.

I'm more than a little shocked by what I am hearing, as it sounds like some users are saying, given my example,  one could actually put down 100,000,000 deposit only option that was simply secured via the bank and only pay 200,000-300,000 a month on a place that we pay $1,000 a month to live in.

(scratching head)  You guys can't be serious.

We've been doing Jeonse in our current place for 3 years now (contract ending next March) and heard today that the Landlady who bought it 1 year ago wants to sell up.

We moved in paying 240 million. The Landlady after we were there for 2 years sold it on and we stayed on as tenants to the new Landlady but our Jeonse increased to 290 million. Now, she wants to sell it for 330 million. Absolutely maddening prices!

Totally gutted that we didn't buy the place rather than taking out Jeonse as 240 million seems like a steal now. Would have made almost 100 million profit.

You paid 240 million for jeonse but you had the option to buy for the same amount. I don't quite understand, but that is an insane amount. Curious if this is in Seoul, some other metropolis, or a smaller area?

my god .... you paid 240 mil for jeonse?

putting that money in index funds - which usually average 7-8% per year - would have netted you a return on investment of around 17 to 19 million Won. per year.

Am I wrong in thinking that jeonse is usually paid using a bank loan? Me and my husband have a jeonse apartment for 190 million in Busan. We paid a 40 mill deposit and the rest is a loan that we pay interest on (a few hundred k per month). We will repay the loan when we leave the apartment and get the jeonse back. In my experience it's an awesome win-win way for everyone - I get a sweet apartment for 350k "rent" every month, the landlord invests the jeonse to get interest, and the bank gets to reap interest on a relatively low-risk loan. Wish they had this system back in the states.

When we had a 40 000 000 won 'weolse' a couple of years ago to get a 34 pyeong, the bank did an 'interest only' loan for 32 000 000 won and we stumped up the 8 000 000 won.  That was only for a year, and then we got another place the same size, for the same 'interest only' for another year.  Then in the new city next to ours, a brand new apartment of the same size and 'weolse' was going for just 10 000 000 won.  We snapped that up.  But this time we paid with only our money.  I think the 'interest only' we paid was 70 000 won a month.  But now we have no monthly to pay, which feels nicer.

My wife kind of complained recently because her friends bought their houses, we don't live in Seoul, we're in Chungnam.  I mean we're talking Central Seoul and 600 000 000+ won in Ahyeon and Dongdaemun and they have jobs for Samsung and as Dongdaemun night market retailers so are raking it in. They have really nice apartments but that kind of outlay for 20-24 pyeong or so, doesn't seem worth it.

What do you mean weolse was 10,000,000?  Is that the deposit and then you pay monthly rent? You said, "you have no monthly to pay"..   

So Seoul is 600 milly for 700 square feet of characterless apartment block?  Guess I'll just live in a villa style place and keep stacking money until I can escape this overpriced jungle.

Monthly is 1,000,000 with 10,000,000 deposit, 700,000 with 40,000,000 deposit, or 500,000 with 60,000,000 deposit, etc.

When we had the 40 000 000 won deposit apartment we paid 500 000 won every month.   Expensive, but at that time there was no other options. Now in our 10 000 000 won deposit apartment we only pay 400 000 won, because it is a new city and there are loads of apartments.  The one we live in now was selling for about 1.4 billion originally.  When the Seoul friends come to stay they love it because we are 15th floor and have a view of the mountains from the living room.  No chance of a view like that in Seoul, unless you pay serious money.

If you'd bought that apartment for 1.4 billion, you'd expect to get at least 5% of the price for renting it out. Ie 70 mil a year. How could you get that with a 10,000,000 deposit and 400,000 won a month. I don't get the maths.

I'm trying to plan camp, vacation, and my future and I can't get my brain to think about them in an orderly fashion. My mind keeps jumping from one thing to another, and now I don't want to think about anything.

Either my co gave me the wrong pages to teach or she just decided to teach the stuff I had prepared. Was completely ready for class today when she starts teaching my part. I of course then had to come up with a game on the spot since the textbook games are the worst.
I also feel like I am living in an inescapable sauna and it's messing with my head. I need it to be winter.

Wow.

The numbers being thrown around are crazy.

Where have I been?

The standard used to be 10,000,000 KRW for every 100,000 KRW in rent.

Meaning, if the place had 100,000,000 deposit only option, you could substitute monthly for whatever portion of the deposit you didn't have.  If you only had 10,000,000 down, you would pay 900,000 a month in rent, or 50,000,000 down and 500,000 a month, etc.

I'm more than a little shocked by what I am hearing, as it sounds like some users are saying, given my example,  one could actually put down 100,000,000 deposit only option that was simply secured via the bank and only pay 200,000-300,000 a month on a place that we pay $1,000 a month to live in.

(scratching head)  You guys can't be serious.

What you're talking about it probably wolse; the bigger the deposit, the smaller the rent, right? But in jeonse you have to pay the entire value of the apartment tot he landlord, who will invest it for the contract period and then give it back after that period is over (simply put). That's why everyone gets a loan and pays the relatively low interest on it in place of monthly rent.

When we had the 40 000 000 won deposit apartment we paid 500 000 won every month.   Expensive, but at that time there was no other options. Now in our 10 000 000 won deposit apartment we only pay 400 000 won, because it is a new city and there are loads of apartments.  The one we live in now was selling for about 1.4 billion originally.  When the Seoul friends come to stay they love it because we are 15th floor and have a view of the mountains from the living room.  No chance of a view like that in Seoul, unless you pay serious money.

If you'd bought that apartment for 1.4 billion, you'd expect to get at least 5% of the price for renting it out. Ie 70 mil a year. How could you get that with a 10,000,000 deposit and 400,000 won a month. I don't get the maths.

Neither do I.  When we got it, it was 30 000 000 won less deposit, with a 100 000 won less in monthly rent than the previous place.  It was win all over, as it was the first place we saw, we took it right away.  Beautiful view, big and brand new.  The guy who owns it is an engineer who more than likely works for the company that built the complex, as he lives in Busan, but he was in the area to sign the contract.  My MIL got him to drop his original 500 00 won a month to 400 000 won saying that there was a load of other places to choose from.  He was ok with that.  Our two-year contract finishes next June so IF we stay then I'd expect a hike in deposit or monthly.  We'll cross that bridge when we come to it.

Sometimes the rent isn't as important as having a good tenant in it.

Investors are looking at the long game of capital gains.

What a fantastically boring topic you guys have stumbled upon.

So you are staying in an apartment that is over $1,200,0000....   but you pay 380$ in rent.....
I'm calling bullshit.  This doesn't add up whatsoever.  You couldn't rent a $50,000 apt anywhere in USA for 380$ month.  The taxes on the place would be your payment alone.

Also...   The Jeonse system is nothing more than a simple PONZI scheme that will crash, if and when, a large financial crisis occurs.  Most likely crippling the economy.  I would never give my own money even if I had it.  Better to get a loan and mitigate risk if losing it all if an implosion occurs.