What is Korea's key money?

Under the key money system, tenants are required to pay a substantial deposit upfront, amounting to approximately one-third to two-thirds of the total cost of the leased property. This deposit serves as a form of payment in lieu of monthly rent.

In South Korea, the real estate market operates under a unique system known as the key money system. This system differs significantly from the conventional monthly rent or wolse arrangement prevalent in many other countries.

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The key money paid by the tenant is held by the landlord or property owner until the lease agreement expires. During this period, the tenant enjoys the use of the property without the need to make any further monthly payments.

The key money system has its advantages and disadvantages. On one hand, it allows tenants to avoid the burden of monthly rent payments, which can be a significant financial obligation. On the other hand, the large upfront deposit can be a barrier to entry for those who may not have the necessary funds.