After we relocated to Korea, I had to look for a place to rent for my family of 3. I decided on renting because I wanted to know the areas well before committing to a purchase, and for obvious reasons, we weren’t qualified for a mortgage just yet. (No history of working or tax payments to the Korean government etc.)
There are 3 major rent systems in Korea. Most popular among Koreans are Jeón-se (Key money for rent duration) and Wol-se (regular rent similar to the US), or Yeón-se (Annual rent). Jeón-se is popular because of its unique system in that you are giving a large sum of money (key money from here down) to the landlord and do not pay anything for the term (generally 2 years) then you get the full key money back making the expense practically free rent. That’s only if you have 100% of key money. Most people do not have much cash and lend from the bank and pay the interest only. (Essentially still cheaper than Wol-se)
Wol-se, you pay smaller key money and pay the monthly rent to the landlord. This is the most similar rent system to the US, but key money (depending on the market) is much larger than a security deposit of x amount of months. (1-month security deposit from where I used to live, Atlanta) For a place near Seoul for a family of 3-4, the key money is usually 1-2uk(억) (US$70k-US$140k ) which I think is still a crazy amount of money.
Yeón-se is similar to Wol-se, generally available in tourist cities such as Jéju island. You pay annual rent up front and these generally do not have key money requirements. The terms are shorter, and range from 3 months up to a year.
To make things a bit easier to understand, I’ve created a small chart.
In a nutshell, each 1-uk (approx $70,000) drops 400,000-500,000KRW per month. Of course, the market will be different and this chart is just used as a basis of what the rent will look like in comparison to each system. The last column I made does not generally work as 99% of time no key money rents are unicorns.
This is obviously market dependent, the closer you go toward Gangnam, the more expensive it becomes. The further away from the city center, the less it goes. (isn’t it essentially the same anywhere in the world?) The monthly payment on Wol-se rarely changes depending on market/location but the key money changes drastically based on location/availability.
You are paying for convenience when you rent, finding a place near the subway, bus stop or a myriad of shops near housing will generally be more expensive. Coming up with the key money is the major point in finding a home in Korea. OR find a job where they’ll provide housing. (It’s usually taken out from the pay but saves you the hassle of finding and coming up with big key money.)
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