Korean Cashflow Condo & Living Rent/Mortgage/Tax Free

[Eric Gabriel]

I leased a condo in South Korea with a deposit of $50,000 with no monthly rent. This system is called "Jun-say" and is unique to Korea. The condo has a market value of about $70,000 and has no existing mortgages per the realtors title search. I subleased it to a tenant on a monthly basis that was paying $500/mo. This person is an expat (American English teacher) with an employment contract and a work visa for at least 1-year, which is the period of the lease. There are no other expenses except (1) the HOA/management fee paid my me of $80/mo (water, garbage, and grounds maintenance), and (2) the realtor processing fee of $200 paid upon each contract renewal.

Upon lease expiration, we received our deposit money back.  If they hadn't, we become the bank in 1st lean position and then receive title to the property with 30% equity.  The owner pays for all the repairs and taxes, and assumes all the benefits/risks of appreciation/depreciation. My End of Year Return Without Leverage $50,000 deposit for 12 months +$6,000/year rent -$960/year HOA/Management Fee =$5,040/year ROI 10% Cash on Cash Return Pretty good for little effort and little risk. I also use this system for my primary residence.  I have not paid rent nor property taxes for 8 years since the owner pays the property taxes.  I have deposited $380,000 for our primary residence in a property that is worth $450,000.  It is better than buying.  Wish me well on the next one when I ramp it up and actually start networking.