Korea’s system for renting apartments is pretty interesting and is unique to Korea. When I first arrived, I asked several people about short-term housing rental, and they all said the same thing, “you will have to pay the deposit”. Paying a deposit didn’t seem like a big deal. In Canada, the deposit is half of one month’s rent, so it’s several hundred dollars at most. When I asked how much the deposit should be, they said usually ten to thirty thousand dollars. What?!
The Korean rental system is unique. You pay a very large deposit, say $50,000, and then live rent free. The landlord makes interest off your deposit and gives it back when you move out. The system is called Jeonse.
The first line in the advertisement above says Halla Vivaldi 422 – it’s the name of the building where I’ve been living. The building is a modern high-rise similar to apartments in downtown Vancouver. The size of the studio is listed as 18 pyeong. A pyeong is 3.3 square meters and is also the size of 2 tatami mats (rooms in Japan are often measured in tatami mats).
The four options for rental prices are listed in man won, or multiples of 10,000 Korean won. You can pay a smaller deposit of $2000 and then pay $480/month or pay a larger deposit of $10,000 and then pay only $400/month.
However, it seems that the Jeonse system is in decline. As you can see from this ad, the ratio of deposit to monthly rent is not large. From what people have told me, the system is being used less and less with newer apartments. Still, if you have the cash, Korea is the place to be for cheap rent.