Types of Lease
In general, the common two types of lease are Wolse (월세) and Jeonse (전세). The difference between the two is that you need to pay a monthly rent on top of a refundable security deposit for Wolse, whereas no additional rental needs to be paid for Jeonse. Another option that is commonly seen is called Mae Mae (매매), which essentially is to outright buy the property.
Payables During the Leasing Period
Security Deposit - Both Wolse and Jeonse requires that you pay a lump sum to the landlord at the start of your contract. This amount will be fully refunded to you at the end of your lease. However, should you damage anything during your stay, the repair cost will be deducted from the deposit. What the landlord does with this sum of money, is that they will put it into their bank account and earn the interest given by their bank. With this said, the security deposit amount is way higher for Jeonse as compared to Wolse hence the interest earned in a way offsets the monthly rental. As a result, no monthly payment is required for Jeonse. The security deposit for Jeonse is in the hundred thousands range minimally, whereas common security deposit amounts for Wolse are 5,000,000krw and 10,000,000krw.
Monthly Rental - None for Jeonse, as explained above. For Wolse, the monthly rental amount is determined by a couple of factors. Of course, the number one factor would be the location of the building, is it near the subway, easily accessible just by the main street, so on and so forth. Surely this factor applies to Jeonse as well in terms of security deposit amount, but this is a factor that affects all real estate properties not just in South Korea. On top of this, within the same building itself, different units could have different rental amount. This is because between the different units, there could be slight differences in the space, for example, a corner unit could be slightly bigger than a unit that is along the corridor. In South Korea, perhaps due to the how packed the buildings are in metropolitan Seoul, everyone seems to be wanting a south facing unit (남향 namhyang) because a south facing unit gets all, if not, most of the sunlight during the day. Another factor, not applicable to all, would be the floor that the unit is on. Units that are higher up tends to not be blocked by another building, hence there would be a better view from the window. Which in turns, becomes a selling point. One important thing to note about Wolse is that, the rental is negotiable. There is an inverse relationship between the security deposit amount and the monthly rental amount. Which means that if you negotiate for a lower rental, you need to pay more for the security deposit, and vice-versa. Currently, the rate seems to be 10,000,000krw of security deposit to 50,000krw of rental (i.e. lowering the monthly rent by 50,000krw will mean you need to pay 10,000,000krw more for the security deposit). But of course, this is just a general rate, different places could have different rate so make sure to ask the realtor! At the end of the day, if the landlord is nice enough, they could also drop the rental amount by a little without asking for more security deposit.
Maintenance Fees (관리비 gwanlibi) - This needs to be paid monthly on top of rental. Maintenance fees are paid to cover several things, like the electricity for the lights in common corridors in the building, lifts, security guard, garbage collection, so and so forth. The amount quoted by real estate agents are often an average, the actual amount could fluctuate month on month but generally will not deviate by a lot from the average amount quoted. For some rentals, this fee could already be included in your monthly rental amount, so make sure to check!
Utilities - Utilities are separate from the maintenance fees. While maintenance fees are paid for common facilities, utilities are paid for your own individual consumption of electricity, water and gas. If you have an induction stove, you might thinking why would you need to pay for gas? Well, you still need to pay for gas if you use the boiler for hot water consumption during showers or floor heating during winter. Utilities can be paid via automated teller machines or at convenience stores. There is a chance that your monthly rental covers utilities, so make sure to confirm with the landlord or real estate agent!
[Update] After having lived here for quite a few months, and seen more places with my friends who were also looking for an apartment, most places now seem to include utilities with the maintenance fees. By include, I mean that it comes out in one bill together with your maintenance fees so it reduces the hassle of having to make payment for multiple bills. The utility consumption is calculated on individual basis. My electricity and water consumption comes with my maintenance fees bill, while gas is separate, so every month I have two bills to take care of. On the other hand, there are places where you have might have to deal with every fee individually, so it comes up to four bills a month. All in all, make sure to ask in detail when viewing apartments here!
Brokerage Fees
If you found the apartment via a real estate agent, then be prepared to pay a fee. The amount of the fee depends on your type of housing, for example, a one room in a villa or a one room in an officetel. It also depends on your security deposit and monthly rental. For more details on the calculation and percentage, you can download the housing guide here. You can also find a list of English speaking agencies here, their realtors would be able to explain to you on how the fees are calculated if you ask them to give you a breakdown. Note that fees are only paid if you actually sign a leasing contract, there are no fees to pay to the realtor if you are merely viewing the place.
Cat-fishing Listings Online
There are many websites and mobile apps that realtors use to post their "available" listings. Some listings are on the sites to attract potential customers into contacting them. For me, there was one listing which I would like to view the place in person, upon contacting the agent, they told me that the place is no longer available, instead there is another place that is similar to the listing that I enquired about. In my case, I could just reject, or go ahead and arrange a time and date to view that listing. I read about other people's experience, whereby they were only told that the place was no longer available when they were physically at the real estate office.
Other than putting up listings for places that are no longer available, the photographs shown in the listings may not be updated, whether it is on purpose or not. In this case, some places may look like they are brand new through the photographs but in reality, they may be run down. So always check any other details provided in the listing. Best if you make the trip to view the place in person to check the current condition of the place before making any decision to lease.
What To Do After Signing
So everything checks out, you've signed a contract and you are happy with your new place. Don't get too comfortable yet! To play on the safe side, you should register your contract with your neighbourhood community center. The process is called "hwak jeong eul ja (확정일자)". Essentially, going through this process is to secure your security deposit. In case your landlord defaults or declare bankruptcy, you can recover your security deposit. Note that to do this, you need to bring along your contract and your Alien Resident Card (ARC). In my case, I signed the contract with my passport, since my ARC wasn't ready yet. Once my ARC is ready, I need to return to my real estate agent for them to update the contract with my ARC identification number in the system. Then I can head over to the community center to register my contract to secure my security deposit.
Useful Links
http://www.gwanak.go.kr/site/eng/02/10206000000002017022302.jsp
https://www.expatkidskorea.com/article/26-dos-and-donts-when-finding-housing-in-korea.html
No comments:
Post a Comment