The first question that Koreans ask when looking for a home in the U.S. is, "Why is there no Jeonse in the United States?"

If you have lived in Seoul for a long time, the Jeonse system feels like not only an intermediate step to home ownership but also a means of investing a large sum of money. However, the concept of Jeonse is structurally difficult to establish in the U.S.

This is because the financial, tax, rental methods, and legal structures in the U.S. are designed in a way that makes Jeonse impossible.

First, the U.S. real estate market strictly separates 'rent (monthly rent)' and 'mortgage (home loan)'.

People buying homes rely on bank funds and credit, while those renting only sign a lease agreement, and there is no structure where tenants deposit a large security deposit with the landlord as an investment.

There is no reason for a system to emerge where tenants deposit large sums with landlords instead of banks supplying funds. In other words, if the reason Jeonse developed in Korea was due to a lack of banking systems, and the real estate deposit effectively replaced the function of banks, then in the U.S., financial institutions have taken on that role from the beginning.

The structure of real estate investment returns in the U.S. centers around 'monthly rent'. The purpose of renting a home in the U.S. is to generate monthly income, and there is no need to manage funds with a large deposit left by the tenant.

Monthly rent is the income, and the model secures ROI through the amount left after deducting operating costs (taxes, insurance, management fees). The method of receiving a large sum like Jeonse to achieve indirect investment benefits offers no advantages for real estate investors.

In the U.S., there is no reason for landlords to receive large amounts from tenants, and even if they do, it is difficult to manage freely, and there is no structure to invest and maximize profits like a bank.

Legal issues are also key. In the U.S., security deposits are defined as tenant protection in lease agreements. Therefore, landlords must safely keep the security deposit paid by tenants in a government-designated account and often must return it with interest.

Using that for investment by the landlord is practically illegal. This is the opposite of Korea, where Jeonse effectively becomes the landlord's investment capital. In other words, if a landlord in the U.S. were to receive a deposit of $200,000 like Jeonse, they would not be able to use that money, and even if they could not earn interest properly, they would still be held responsible. If a system makes it uncomfortable to receive money or not to receive it at all, there is no reason for it to exist in the first place.

Finally, in the U.S. economic environment, Jeonse is likely to be classified as a risky product. Jeonse involves a structure intertwined with financial instability factors such as falling home prices, reverse Jeonse risks, and issues of non-refund of deposits in case of landlord bankruptcy, but the U.S. does not leave such risks in the market.

Financial institutions take on this role, and risks are either eliminated from the product structure or managed through an insurance system. The U.S. has a market mechanism that does not allow individual landlords to bear such risks. Ultimately, the reason there is no Jeonse in the U.S. is not simply that "it is not done" but rather that "there is no need to do it, it is disadvantageous to do it, and it is risky to do it."

In Korea, a system that compensates for the imbalance in the real estate market is already replaced by the financial system in the U.S.

So if someone asks why there is no Jeonse in the U.S., you can answer like this: Jeonse is a special function created by the Korean real estate market, and the U.S. has already solved that function through finance. The Jeonse system itself was never needed in the U.S.