||Residential areas are spread all over Seoul, including the business districts in the northern part of the city. Even in commercial areas in Kwanghwamoon or Sinchon, you will find residential areas behind the main thoroughfares. Besides, in the suburbs of Seoul, there are huge residential complexes in so-called “new cities” that have been developed over the last decade (Bundang, Ilsan, etc). There are different types of payment methods for purchasing or leasing houses in Seoul.
For a foreigner wishing to purchase a house or building, it is advisable to seek the assistance of a real
estate agent. The price generally depends on the location and the age of the building. A real estate agent will provide additional services like checking all related documents and real estate law for registration, advice to you about market value and location value, etc.
Rental Type 1: Jeonse (Key Money)
The Jeonse system is one of the traditional rental options in Korea. When making a contract, you pay 40 to 70 percent of market value of the house as a deposit. There are no monthly payments. This deposit is returned to you upon termination of the lease. In fact, that the Jeonse system has been popular in Korea for so long reflects the high interest rate of Korean banks. There is, however, a tendency these days to replace the Jeonse system with the Wuelse system (monthly payment) as bank rates have declined.
* Features of Jeonse
Holding a house by lease on a only deposit basis
Deposit is returned upon termination (only principal, not interest)
No monthly payments
Contracting period : 2 years on average
10 percent of the deposit is paid at the time of contract signing
The remaining 90 percent of the deposit is paid when you move in the house
Tenants are responsible for maintenance.
Rental Type 2: Wuelse (Monthly Payment)
There are 2 kinds of Wuelse systems:
1) 10 to 30 times the amount of the monthly payment is deposited with the owner for the term of the lease. Tenant also pay for the house rental monthly fee to the owner. The deposit is returned to the tenant upon termination of the lease. (only principal, not interest)
2) This requires advance payment of the monthly rent at a set date every month for the entire lease term, or tenant have to pay the total amount of rent for lease term to owner before commencement date. No deposit is required. This system is popular among foreigners in Itaewon, Hannam-dong and Seongbuk-dong, etc.
Rental Type 3: Hasuk (Boarding House)
This system is suitable for single individuals or students from foreign countries. Rent is paid monthly to the owner, and no deposit is required and the contract is not required. In these settings, a landlord usually provides a room and one or two meals daily for the tenant.