[jimscard]

The article states that they get 2 years of free rent. In exchange, the property owner gets the use of the deposit money. From what I can tell, the scheme depends on property values going up, so that when one tenant leaves, the owner can get another tenant to put down a larger deposit, part of which they use to pay back the first tenant etc.

[xyzzyz]

It does not. The landlord can just invest the deposit, and then return the principal to the tenant when he leaves, keeping the interest.

[JCharante]

At that point how is it better than the tenant investing the jeonse money and using the returns from the investment to pay rent?

[lifthrasiir]

The very existence of Jeonse affects monthly rents, making Jeonse a worthy candidate to consider to tenants.

[hsbauauvhabzb]

Isn’t this normally called a Ponzi scheme?

[mistrial9]

https://ko.wikipedia.org/wiki/%ED%8F%B0%EC%A7%80_%EC%82%AC%E...

[IncRnd]

No, this isn't close to a Ponzi scheme. A Ponzi scheme is fraud where profits are paid to earlier investors with funds from more recent investors.

[fsckboy]

you mean simulated or pretend profits

[IncRnd]

The word profit refers to the profit of the earlier investors.

[fsckboy]

when fraud and bankruptcy courts unravel an investment scheme, they don't "claw back" distributed profits, but they do demand the return of the ponzi's payments that are meant to appear to be profits but were simply purloined from the earlier investors, is what I was referring to. The courts do not consider those to be profits.