Large Deposits on Apartments

[Marcus Coleman]

Hey people, 

So, first of all let me say, I'm new to real estate investing and I don't work in the finance or economics fields. So please excuse my ignorance, but I wanted to know what others think about this.

Earlier today I spoke with a friend that's living in and is from S. Korea. She lives in Seoul, and the housing market is insanely expensive there. So, she recently "bought" an apartment in Seoul for $80,000 USD. How it works in S. Korea is, you don't own an apartment, but you pay for it like you own it. She pretty much paid $80,000 USD to live there for 2 years. But here's the kicker, she gets it back at the end of the 2 years!! That blew my mind.

From the sound of it, you'd get a loan from a bank(or pay out of pocket), pay the landlord the $80,000, and live there for 2 years. The landlord makes money off the interest of the $80,000.

Has anyone heard of this system being used in the US? Do you think it's a good idea? She mentioned that landlords are trying to move toward a monthly payment system because interest rates are so low. But wow, if you did more with that money, you could make a killing!

[John Van Uytven]

That is the system here. 

My apartment is $3,000 as the refundable deposit and then $250 a month.

The Korean landlords are trying to go to the monthly rent system as well.

The problem for the landlord is they might have invested that somewhere else and then the tenant wants to leave early.

@Daniel Ryu

 or @Jacob Michaels

 can explain it better than me.