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You perhaps missed that you get the whole deposit back. The landlord doesn't keep it. You could buy the property outright, or you could live somewhere for essen
by pie_flavor 5y ago
You perhaps missed that you get the whole deposit back. The landlord doesn't keep it. You could buy the property outright, or you could live somewhere for essentially free, as long as you don't value the interest on that cash more than you value the place you're staying.
- willcipriano 5y agoWho is responsible for repairs?
- Leftium 5y agoNot quite sure what the exact laws are, but generally the landlord fixes stuff. They will even replace lightbulbs, within reason. If there is a small thing I can fix on my own, I'll just do it myself. Usually there is a monthly management fee that ranges from $50 to $100+ dollars that covers cleaning of common areas, repairs, etc.
- throwawayswede 5y agoThat sounds strange, what's in it for the landlord?
- danr4 5y ago0 interest loan I guess
- jayadeeptp 5y agoOpportunity cost. Landlord can use the money to invest elsewhere and make more than the minimum 12% APY. It is like 0% interest loan for the length of the tenant stay.
- Leftium 5y agoSee my other comment: https://news.ycombinator.com/item?id=28319313 https://news.ycombinator.com/item?id=28319313
- beervirus 5y agoInterest income on the deposit.
- spoonjim 5y agoNo credit risk from the tenant.
- peakaboo 5y agoSounds like a too good to be true situation...
- flemhans 5y agoStill, why not pay 10% more and own the building? You could still get the money back (and hopefully more) when you sell it again.
- phonebanshee 5y agoOr potentially a lot less. The idea that real estate always goes up doesn't match reality.
- bigthymer 5y agoI'd imagine transaction costs on real estate are high...maybe even approaching 10%.
- lolsal 5y agoTransaction costs, taxes, maintenance, interest opportunity cost, etc. all of the same reasons that it might be cheaper to rent in the USA than buy.
- tannhauser23 5y agoOwner might not want to sell?
- glitchc 5y agoDidn’t miss it, just also noted that if the landlord loses the money or goes bankrupt or just skips town, in a foreign country without strong connections and shaky command of the language, you are likely screwed.
- jliptzin 5y agoGiving that much money to a landlord is absolutely terrifying to me given the history of landlords I’ve had. I’d much rather own the property and deal with any transaction costs associated with selling.
- vmception 5y agoBasically, nobody wants to admit that their own country's long established and respected systems are ponzi schemes. Many South Korean landlords are underwater on a bad investment and use the next renter's deposit to pay out the last. Citation not possible. The point of the system was to spur investment in the south korean economy.
- revel 5y agonext question: how would one go about betting on Korean residential mortgage credit spreads as an American retail investor?
- vmception 5y agoThats not the good bet - based solely on this information - the landlords would be fine on their own property, they would have lost a portion or all of a prior renters deposit in some other speculate bet instead of just letting it sit in a bank account, new renters deposits are paying for the ability of the landlord to pay the prior renters Of course that prior speculative bet could be in mortgage(s). You would need to look at other weakness in that economy to rationalize whatever bet you want.