South Korea Economy Real Estate and Jeonse Transactions

[Saluki]

 

I'm not opining on the South Korean economy, but I've never heard of this Jeonse thing.  My question is if you have 70% of the purchase price of the property, why wouldn't you just buy the property? If you don't have it and you have to borrow it, again why not just buy the property? If you have to pay interest on the borrowed money to live "rent free" for two years, then it isn't rent free. You are essentially borrowing money from a solvent lender and lending it to an unsecured borrower with you as the guarantor to the lender. 

 

Fascinating concept though.