Key money and rent upfront for a year, how much do I get back?

[southernman]

Hi,  So I'm hoping to re-sign my contract and teach again for another year.

Someone told me that if I pay my key money plus a years rent in advance,  then I get both the key money and my rent back.  The whole system with keymoney confuses me a bit and frankly I'm very sceptical that I would get both back.  I know  that I definitely get my key money back at the end of my contract.

Can anyone with experience in these matters help me out,  please.   I live in a nice and rapidly growing suburb of Busan (well a satellite city really)  A major plus for the place is that it's ridiculously cheap for key money 5-7 Million for a new one bedroomed apartment, for instance.

[donuts81]

Usually what happens is the larger (or longer) the key money deposit you make the cheaper the monthly rent you pay. If you make a large enough deposit then you don't have to pay rent. You would have to negotiate on the amounts but you should get all your deposit back........ unless your landlord is a crook.

For a situation where you are paying no rent I'm assuming your deposit would have to be much larger than 7mil. If you think about it whatever your not paying in rent the landlord needs to be making from investing your deposit.

To give you an idea I was offered a 50,000w discount in my monthly rent for every 5 000,000w extra I deposited for 1year. I don't know if that's representative of how things usually happen but it was what I was offered. I turned it down.

[southernman]

Usually what happens is the larger (or longer) the key money deposit you make the cheaper the monthly rent you pay. If you make a large enough deposit then you don't have to pay rent. You would have to negotiate on the amounts but you should get all your deposit back........ unless your landlord is a crook.

For a situation where you are paying no rent I'm assuming your deposit would have to be much larger than 7mil. If you think about it whatever your not paying in rent the landlord needs to be making from investing your deposit.

To give you an idea I was offered a 50,000w discount in my monthly rent for every 5 000,000w extra I deposited for 1year. I don't know if that's representative of how things usually happen but it was what I was offered. I turned it down.

Awesome,  thanks for your feedback,  it makes a lot of sense.  I'd been told that and American and his wife in my city paid 9 Million and only had to pay 300 K a month in rent.  So in my rather naive (optimistic) thinking I thought maybe I could get away with paying around 12 Million and I'd get free rent for the year  hehe....    Then I'd  just pocket the housing allowance of 400 K

 I was just told yesterday from a fellow NET that she has to leave her large apartment because the POE will not pay more than 5 Million key money in my province. The key money in her apartment is going up to more than that when her current contract expires,  so she's looking for somewhere else to live.

But I'll give it a crack anyway,  I like that you said it's all down to negotiation. My current landlord is an awesome old dude,  the best landlord by far out of the four I've had in this country.  So I'll just ask him when the time comes.  Maybe we can come to some sort of compromise whereby I pay him a semi-decent  amount upfront  and maybe only 200 K  or so a month.

With the exchange rate the way it is (I'm from NZ),  I won't be sending a lot of money back home for the foreseeable future anyway,  so I might as well use it here. 

[Koreak]

It really depends on the landlord.  From my experience, if it is a one year contract, many landlords would rather you pay a monthly rent because they don't really make much off the interest with a one year contract.  So for the typical huge key money the landlords would rather you sign a two year contract. It also depends on the size of your apartment.  I am not sure on a one room, but a typical 전세 (large key money deposit, no monthly rent) for a one bedroom apartment (about 15-17 pyeong) is about 20 000 000 won.  But I am sure if you talk to your landlord you can come to an agreement.  Good luck with your housing!

[southernman]

It really depends on the landlord.  From my experience, if it is a one year contract, many landlords would rather you pay a monthly rent because they don't really make much off the interest with a one year contract.  So for the typical huge key money the landlords would rather you sign a two year contract. It also depends on the size of your apartment.  I am not sure on a one room, but a typical 전세 (large key money deposit, no monthly rent) for a one bedroom apartment (about 15-17 pyeong) is about 20 000 000 won.  But I am sure if you talk to your landlord you can come to an agreement.  Good luck with your housing!

Cheers...   Yes i'm looking forward to seeing how it goes, it should be interesting