magnetonic

if you don't know anything about the way you rent apartments in korea, i'll give you a little rundown. it's actually quite interesting, as you'll see.

the whole system relys on what's called "key money". you can pay "full key money" or "monthly key money". if you pay full key money, say, for a year leaase, at the end of the year, you get *all* of your money back. yes, that's right, you get the entire amount returned to you. how does that work? you may be asking. well, i'll tell you. full key money is a really really big amount of money. for my place, it's about W40,000,000, which is about CA$45,000 dollars. so if you have $45,000 cash lying around, you can live somewhere essentially for free. the catch is the person you just gave $45,000 to can now invest that cash for one year and make a crapload of money for nothing. she returns $45,000 to you and keeps the interest. this is essentially your rent - your lost potential at making money.

since most people do not have that much liquid cash the nice property owners allow you to pay "monthly key money". this amount is considerably less than the full key money. keeping with my example, one could pay 5 or 10 million won as the key money, but would have to pay an extra 350-450 thousand won more a month. this offsets the amount of money the owner could make if you had given them the full monty. the extra cash is not returned to you.

in my case, i am going to pay W5,000,000 (=CA$5840) key money, and i'll pay W350,000 (=CA$408) more a month. even 5 mil was hard to get, imagine trying to get 10 million.

but my place is small. to get an apartment big enough for a family of four, one would need over W100,000,000 (=CA$116,000) cash for full key money. in canada, you could put a hefty payment on a house with that.

i find the idea interesting, in that after a year, i'll get my W5,000,000 back. but i can see how it would be difficult for a poor student to move out of her house, or a middle-class worker to get a nice place to live.