I’m assessing a 2-bed townhouse in Seoul priced at ₩1,063,000,000, with expected rent of ₩6,705,000/month. That gives a headline gross yield close to 7.6%. The building appears sound, but shared-building reserves could change the outcome materially. My conservative model already includes vacancy, management, routine maintenance and one larger repair reserve. Which local cost am I most likely underestimating—insurance, property tax, turnover, building contributions or something else? Also, what net yield would justify the risk for you?
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Seoul 2-bed townhouse at ₩1.063bn: does the rental return hold up?
- Thread starter AwakeBench
- Start date
Before trusting the yield, clarify the proposed tenant deposit and whether ₩6,705,000 is realistic cash rent under the actual lease structure. That can make two apparently similar Seoul rentals economically quite different. I’d also request the building’s recent fee history and any planned works, rather than relying only on its current condition. A sound-looking building can still have expensive common-area needs.
I’d worry less about choosing a target net yield until the financing is stress-tested. At this price, even a modest change in borrowing cost or loan terms could outweigh small adjustments to insurance or routine maintenance. Run the deal with lower rent, a longer vacancy between tenants and a major repair occurring in the same year. If cash flow survives that combination, the 7.6% headline figure becomes more meaningful.
Financing matters, but it shouldn’t replace checking the rent assumption. ₩6,705,000 per month is doing nearly all the work here. Is that supported by comparable 2-bed townhouses with similar location, age, condition and deposit terms, or is it an agent’s optimistic estimate? I’d want evidence of achievable rent plus expected tenant turnover costs before discussing what net yield is acceptable.
I’d build three separate views: property return before debt, cash flow after financing, and a bad-year scenario. Include property tax and insurance based on quotes or assessments for this specific townhouse, not broad estimates. Then ask the building manager for current charges, reserve details and known upcoming projects. My decision point would be whether the return remains worthwhile after those verified costs—not whether the gross yield rounds to 7.6%.