The high cost of housing in urban areas often forces tenants to spend a significant portion of their income on rent, while landlords depend on steady monthly payments. Korea’s Cheonsae system presents an alternative: tenants provide a large upfront deposit (50-90% of the property value) in exchange for little or no monthly rent, with the deposit refunded when they leave. This model benefits tenants by reducing recurring expenses and landlords by providing lump-sum capital for further investments. However, this system is mostly limited to Korea, creating an opportunity to adapt it globally.

How a Global Cheonsae System Could Work

One way to expand this model is by creating a digital platform that connects landlords and tenants under Cheonsae-like agreements. Tenants could finance their deposits through low-interest loans, eliminating or minimizing monthly rent payments. Landlords, in turn, could reinvest deposits to acquire more properties or fund other ventures. The platform might earn revenue by:

• Charging transaction fees for matching services.
• Generating interest on deposits held in escrow.
• Offering insurance or legal support as premium services.

For tenants, this could appeal to those with existing savings or financing options, such as digital nomads or expatriates. Landlords would benefit from immediate capital and potential property appreciation, while investors could leverage the float for returns.

Execution Strategies

A pilot program in a flexible market—like Portugal or Thailand—could test demand. Starting small, a basic website could list properties and facilitate agreements with escrow and insurance safeguards. If successful, the platform could scale by:

1. Adding financing options to make deposits more accessible.
2. Expanding to other high-demand urban areas.
3. Developing automated tools for contract management and landlord investments.

Key assumptions to validate include tenant willingness to commit large deposits, landlord participation without monthly cash flow, and legal feasibility in target markets.

Differentiation from Existing Models

Unlike traditional rentals, this system shifts costs from recurring payments to a one-time deposit, potentially lowering long-term expenses. Compared to rent-to-own schemes, it doesn’t involve ownership, making it simpler for tenants who want flexibility. Co-living spaces focus on community and monthly payments, while this model prioritizes cost savings without communal living.

Trust could be addressed through escrow services and insurance, while legal partnerships would ensure compliance. If property values stagnate, hybrid models (partial rent) could balance incentives. The goal is to make housing more affordable for tenants while unlocking capital for landlords—a win-win if executed thoughtfully.