My friend told me to "look for a jeonse place," but it's confusing when the landlord asks you to hand over the full 100 million won with no monthly rent at all. If they're not even collecting monthly rent, how on earth does the landlord make money? Real economics is hiding behind this question. ## What does the landlord do with this money Jeonse is basically the landlord borrowing the tenant's money for a few years. Back in the day, bank interest rates were high, so landlords could earn more than they would from monthly rent just by parking that lump sum in the bank. Interest rates have gone down now, but instead, landlords use that money to pay off the loan they took out to buy the house. Cutting the loan interest is basically the same as earning money, so they no longer need to collect monthly rent from tenants. ## Things to check before moving out - Ask first whether it's jeonse or ban-jeonse: ban-jeonse involves paying a lump sum plus a bit of monthly rent, so the calculation is different. - Check the property registration document to see how much debt the house carries: if the loan is too large, there's a higher risk the landlord won't be able to return your deposit. - Check whether jeonse deposit guarantee insurance is available: you can check in advance on the HUG (Korea Housing & Urban Guarantee Corporation) website whether this property is eligible for insurance. Even if the lump sum feels huge, once you understand what the landlord does with that money, you'll get why jeonse works the way it does.