Saturday, September 23, 2006

The Apartment

We decided some time ago to rent an apartment in Korea during our stay, so the hunt began for a place. At first it looked like we could only get an apartment for a minimum of a year, which was bad enough, but my greater shock was reserved for the financial terms - maybe a £30,000 deposit and little or no monthly rental charge, with the deposit returnable at the end of the tenancy. I don't know whether I was more shocked at the onerous deposit level or the financial illogicality of a piecemeal rent which couldn't possibly make the landlord a profit. It doesn't help that being a stockmarket trader by profession means if I see someone apparently willingly entering into a loss-making relationship with me I get suspicious. My girlfriend tried to explain that their motivation was likely to be their desire to use the lump-sum to generate greater returns in the year of its deposit, but this just made me even more dubious of them; I know what happens when the guy on the street puts large sums of money into the stockmarket - or anything else for that matter - hoping to generate quick returns.

I was a bit frustrated that no-one seemed to rent apartments in the logical way in which this happened in the UK, and everywhere else I knew. That is, with a couple of month's rent as deposit and a monthly rental which meant a profit for the landlord.
But it later transpired that there were such apartments with the discovery of Officetel, which are neither offices nor telephone kiosks, and the plan of getting our own place seemed back on track. My girlfriend's mother volunteered to look for places and the hunt was on.

When a few places came back with descriptions it was hard to know what to make of them really. Without pictures each one-room apartment seemed very much like another and when a decision was made it was mainly on the basis of proximity to my girlfriend's mother's place and the availability of TV and Internet in the apartment. That's fine by me though; sadly my life is founded on the principle on Internet access and I asked about that before I'd asked about cooking facilities. In my defence I do need to plug myself back into the markets as soon as reasonably possible to figure out what's going on in the world.

An intriguing alternative possibility arose during the course of the apartment hunting, which was to buy a two-room officetel-type property for £28,000. This got me quite excited because if it could be rented for £300 per month it could theoretically pay for itself in 7.7 years - or as traders would say, it has a price-to-earnings (p/e) ratio of 7.7. That's cheap; a typical apartment in the UK would be on an effective p/e of 20. Property in the UK is increasing in value (though it's probably overvalued), and I'm told that Korean property isn't, but for a p/e of 7.7 I didn't care. But I passed on the idea in the end because another thing I know from the market is that where there's a good deal, there are usually others to be had, and I'll have time to think about this in more depth when I'm in Korea, rather than trying to make big decisions outside it.

So we have our rental place, which
is allegedly near the university. From the maps I've seen this is clearly the Korean use of the word 'near' which in the UK would translate to 'not very close to at all'. It doesn't matter but I've made a mental note to be cautious of Koreans' ability to measure distances. We have no furniture, and no actual TV or Internet even if they can be linked up. The early days are going to be fun (i.e. hard).

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