@rustix3
0:53 "You can move in today and live here for 2 years without spending a dime" 5:36 "On moving day you, the tenant, give your landlord 100,000s even millions of $"
@bovanshi6564
"I don't pay rent, I just have a loan I pay interest on!"
@johnw9038
The catch: it's not actually free
@doujinflip
tldr It’s the Jeonse 전세 system, where tenants lend the landlord much of the value of an outright purchase, in exchange for a multi-year lease at reduced or even no rent in lieu of interest. Sounds like a pretty good deal on paper, but there have been cases of landlords deducting for “damages” and other “fees” when they’re supposed to give back every Won to that former tenant.
@r.r.r.918
It’s not free rent and describing it as such is an economically inaccurate way to describe the situation. Rather South Koreans are paying for the apartments through the opportunity cost that comes with paying the deposit upfront, and that opportunity cost can be explicit in terms of the interest rate on the loan that South Koreans may have taken out or implicit in terms of not being able to save, in terms of bonds or equities or any other type of security that pays interest. This is just renting, but in a different form. There is no free lunch in finance.
@grproteus
hey, here's a wild idea for Nebula: why don't you let us give you 5000 USD for two years of content, then at the end of that period, you give us back exactly 5000 USD?
@51918
The mega corporations in South Korea are like something out of Blade Runner. I lived there in 2014 as an English teacher, and I can attest that saying these giant corporate conglomerates own everything is no exaggeration. Most Americans have probably never heard of Naver, Lotte, or Hanhwa, but in S. Korea these are just a small sample of companies that have everything from their own theme parks, baseball teams, cafes, or in some cases even entire towns.
@drac124
Very far from free rent. You give up interest rates, which in a country with high interest rates, is a lot. In Brazil for example the situation is weird. Its worth buying a house if you don't have the money for it. And its not worth buying a house, if you have the money for it. I explain: - You want a house worth $500,000. You dont have the money. Rent is around $3,000. But if you buy it, you pay like $2,500 per month for the bank. Hence better buy than rent. - You want a house worth $500,000. You have the money. Buy it? No. You invest that in a very conservative investment, and you get $5,000 a month in interest rates. With that you pay the rent and still have income left. If reinvested, your income will only grow. So better rent. This is how it works when interest rates are high and the market don't fully align. So say rent basically free, because you get your full money back in 2 years makes no sense, because you are giving up a lot of interest rates.
@RawbeardX
the banks hate this trick: don''t pay rent, just buy it!
@christianweibrecht6555
This situation is surprising because it’s so strange
@tHebUm18
No such thing as throwing away money on rent--you're paying for a place to live. There's significant opportunity cost in saving up a down payment then paying down a loan for 30 years vs being able live cheaper (basically every major US city is cheaper to rent than own for equivalent property) and invest the difference in assets that generally provide a better ROI than a home (like stocks).
@thanGacao
I live in Korea. My deposit is 80k USD and rent is 200USD and its a mix of this Jeonsae and regular rent. With this system I'm able to stack money and save like crazy cuz I didn't need a loan for that 80k. The downside is that my place isn't mine, not big enough if I want to start a family, or in the best condition.
@cocktail7342
a common scam in korea is the landlord simply not paying back their loans. and there is nothing you can do about it even if you sue them and win they will say they have no money and you wont get your money back.
@danielbenner7583
1:19 hey those are the Samnick Towers in Busan! I used to live there in 2014, they’re pretty old by Korean standards (built in the late 70s), so I only paid $275 USD per month (no Jeonse, no key money, no deposit). 2 bedroom apartment too.
@d.n.a5415
The Jeonse system simply put it is like a ponzischeme that no one in Korea thought it would eventually become fraudulent. Outsider who come to Korea have known this system would eventually be a major problem, but in Korea at one point the system was like a national pride only in a country like Korea a jeonse system would ever exist. Simply put it. With government lending support, For the past 50 years, landlords have bought up apartment complex using bank loans of up to 70-80%. Landlords will use the lump sum jeonse lease to pay off their debts and repay the tenants, by using new tenants jeonse money to pay off their previous tenant just like a ponzi scheme. It still goes on today. Citizens in Korea win apartment units from developers following government guidelines and eventually lease the apartment if they can’t afford to pay off their remaining balance.
@Lukeclout
So Jeonse is where the landlord have to play a modified Ponzi Scheme
@maxant4285
I used to live in free housing back in USSR. But there was a catch...
@debojitmandal8670
This is not just common in South korea it's also very common in India specially Karnataka so here my family paid money to one of the landlord as lease so they will return is the money within couple of years .The reason they do that is bcs they get the capital without paying a single penny as interest they just return the people without interest just the principal amount had they taken the amount from bank they had to pay 8-9% intrest rate over a period of 10 -15 years so this the approach they take
@chrishopkins8893
Its not quite as bleak as the video suggests. There's such a thing as jeonse insurance. While you can't get it for all types of houses. It costs around $1500, but it means that if your landlord can't give you the money back, the insurance will, and then you chase the landlord together. There are also ways of checking how many debtors they have for the house so you can ensure that if they go bankrupt you'll likely get your money back. So on some level you do have to trust, but there are precautions you can take.
@PolyMatter