Seoul rental deal: ₩1,773,000,000 purchase and ₩11,790,000 monthly rent

I’m assessing a 1-bed townhouse in Seoul at ₩1,773,000,000, with expected rent of ₩11,790,000 per month. That produces a headline gross yield near 8.0%.

The building looks sound, but its reserves could materially change the result. My conservative model uses eleven months of rent and deducts management, routine maintenance and a larger-repair reserve. I’m still concerned that the repair allowance is too light.

Which local ownership cost am I most likely underestimating—property tax, insurance, building charges, turnover or something else? Also, what net yield would justify the risks here?

Eleven months gives you ₩129,690,000 annually, or roughly 7.3% before any expenses. So the 8.0% figure should not drive the decision. I’d separate recurring building charges from major works rather than burying both under maintenance. A single large building expense could matter much more than routine repairs at this price.

One missing fact: is ₩11,790,000 pure monthly rent, and what tenant-deposit assumption sits behind it? The lease structure can affect both cash flow and risk. I’d also run the model with a lower achieved rent and a longer vacancy rather than assuming the quoted rent arrives immediately.

I disagree slightly on vacancy being the main stress point. Using eleven months already provides some allowance, while turnover can create several costs at once: lost rent, management or letting expense, cleaning and repairs. Financing is another sensitivity—if there is debt, test the cash flow at a meaningfully higher borrowing cost. There isn’t a sensible target net yield without knowing leverage and your alternative uses for ₩1,773,000,000.

Before deciding, get actual figures rather than adding broader percentage allowances: property-tax estimate, insurance quote, management terms, common charges and any available history of reserve spending or planned works. Then model a normal year, a turnover year and a major-repair year. If the deal only looks acceptable in the normal case, the repair reserve is probably not the real problem—the purchase price is.