Updated: Jan 31
What is Jeonse?
Jeonse is a concept that runs only in Korea when renting a house. You rent a house with putting down a full amount of deposit to the landlord. There is no monthly payment and after the contract period is over; generally it is 2 years, you will get your deposit back in full coverage.
This sounds very attractive to others because theoretically, you won't lose a penny on renting a house. But there are a couple of issues to consider.
First consideration: need big capital
First off, the amount of full deposit is big. It depends on the location, but generally, if you are looking for a one-room in Seoul, you will need around 100~200 million KRW (worth 82,500~86,500 USD) all at once - thank god you will get them back at the end.
What good is it for the landlord then? He/she now has a capital to utilize thanks to you. The landlord can put it in a bank deposit to earn interest income or can temporally payoff a dept they have for some reasons.
Second consideration: it's all about the risk
The latter situation is definitely what you would want to look out for, which is the second issue. As you are exchanging a high amount of money, it can be very risky. The worst case is that you lose your whole deposit. The landlord could go bankrupt during your stay, or he/she can simply be a swindler. Therefore, trust should be based between the tenant and the landlord. But of course, there's not much chance for the parties to know each other already. That is why having a real-estate agency in the middle is very important. Even local Koreans pay great caution when signing Jeonse contract, and you should too.
▶ Helpful? To check out what Wolse is click here.
▶ One of the biggest housing community for expats in Korea: Housing-in-Seoul