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Q: Please explain the difference between Jeon-se(lease) and Wol-se(monthly rent).

(1) Jeon-se(Lease on a Deposit Basis)Korea has a unique housing rental system. Before moving into a house, tenants usually pay a large sum to the landlord. When the rental period ends, the deposit is returned to the tenant in full (minus any damages).Typically, you can rent a whole house, or only part of a house (1 floor, 1-2 rooms, etc.). If you want to rent a whole house, the deposit is usually 40-80% of the value of the house.Rental contracts are usually made for 2 years (for officetels, 1 year), and by law the landlord cannot terminate the contract before the end of the two-year period if the tenant wishes to stay until the end of the contract. In fact, a tenant has the right to stay in a house for 2 years even under a 1-year contract pursuant to the Housing Lease Protection Act. (2) Banjeon-se (Half Deposit System)With the recession in the housing market and the current trend of lower interest rates, leaseholders in Korea have recently been shifting their lease system from the previous jeonse (deposit system) to one of banjeonse (half deposit system), in which a deposit is combined with a monthly rent to secure profitability for the owner.Today, three out of ten houses are leased under the half deposit system. To calculate the rent for their properties, leaseholders use the average monthly interest (200% of the interest rates at banks) accrued by the deposit. For example, assuming that under higher interest rates, the deposit money would increase from KRW 300 million to KRW 400 million over two years, leaseholders now divide this increase of KRW 100 million into a monthly rent of KRW 400,000 to KRW 600,000, and offer their properties for the deposit money of KRW 300 million and a monthly rent of KRW 400,000 to KRW 600,000. (3) Wol-se (Monthly Rent)You can also get accommodations on a monthly rent basis. You will still have to pay a small deposit, much smaller than that of a lease, but you will have the advantage of being able to negotiate the deposit depending on the period of your contract. If you can afford a higher monthly rent amount, the deposit can be smaller, and vice versa.Wolse conditions depend on the size and number of rooms, and other facilities. Neither a lease nor a monthly rent arrangement will include the cost of utilities. You have to prepare furniture and home appliances separately, but many multiplex houses and officetels are equipped with basic home appliances such as a refrigerator, washing machine, etc.
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