Seoul 4-bed at ₩1.725bn and ₩10.26m monthly rent: does it stack up?

[DaanGale]

If the expected rent cannot be achieved consistently, the headline return could look attractive while the investment still loses its margin. The property is a 4-bed coastal home in Seoul at ₩1,725,000,000, with projected rent of ₩10,260,000 a month—about 7.1% gross.

I have allowed for empty periods, management, normal upkeep and a significant repair, with no price growth in the model. The missing piece is evidence for the rent: is it supported by recent leases for comparable 4-beds, and what deposit and tenancy terms produced those figures? I also need to test insurance and financing costs rather than treating them as fixed. Which lease evidence or ownership charge would you verify first before deciding whether the projected return is credible?

 

[knitsAndAtlas]

The gross arithmetic works: ₩10,260,000 over 12 months is ₩123,120,000. I’d focus less on choosing a target net yield initially and more on testing whether that rent is genuinely repeatable for this particular 4-bed. What tenancy structure and deposit assumption sit behind the monthly figure? Turnover, leasing gaps and costs between tenants could hurt more than routine management.

 

[DaanGale]

Good point. The ₩10,260,000 is an expected monthly figure rather than income from an existing tenant, so I should treat it as unproven. I haven’t relied on a large deposit to improve the return. I’ll rerun the model with a longer leasing gap, turnover work and a lower achieved rent instead of applying one general vacancy percentage.

 

[loft.balanced]

I’d also separate building maintenance from ownership costs. Property tax, insurance and management are not interchangeable, and a coastal property may have repair exposure that a visual inspection does not capture. I wouldn’t accept the 7.1% headline as compensation without seeing the net result after those items and purchase financing. If debt is involved, stress the interest cost and vacancy together, not separately.

 

[loft.real]

One caveat: an all-cash net yield and a financed cash-on-cash return answer different questions. Before deciding, get written estimates for insurance, taxes, management and likely tenant-change work, then model zero, one and several vacant months. If the deal only looks attractive in the best-rent, quick-reletting case, the margin is too thin regardless of the advertised gross yield.