How to Use the Jeonse Ratio Calculator
The jeonse-to-sale ratio = Jeonse Deposit ÷ Sale Price × 100%. Gap investing means purchasing a property by funding only the difference between the sale price and the jeonse deposit. A high ratio requires less upfront capital but significantly increases risk if property prices fall.
Risk thresholds: below 60% safe, 60-70% moderate, 70-80% caution, 80%+ high risk. At 80%+, even a 10% property price decline can leave the landlord unable to return the full deposit to the tenant. This risk is especially important for Korean real estate investors using the jeonse system.
Frequently Asked Questions
Jeonse deposit divided by property sale price, as a percentage. A higher ratio means less gap capital needed but greater risk of deposit return failure if prices drop.
When property prices fall near or below the jeonse deposit, the landlord may struggle to return the full deposit. Risk rises sharply when the ratio exceeds 80%.
Below 60% safe, 60-70% moderate, 70-80% caution, 80%+ high risk. Even a 10% price drop at 80%+ can trigger deposit return failure.