Paying rent becomes easier in South Korea
July 7, 2003
YONGSAN GARRISON, South Korea — Sgt. William Hoover said he wasn’t too comfortable carrying around $1,500 to pay the rent for his off-post apartment.
“I don’t like carrying that much cash on me,” said Hoover, the training noncommissioned officer for the 34th Support Group.
But under a new program — called Automatic Rent Collection — soldiers can have rent automatically deducted from their paychecks and transferred to their landlords’ accounts, said Lt. Col. Robert E. Kucharuk, commander of the 176th Finance Battalion.
The old system was cumbersome and time-consuming: Soldiers would get an Overseas Housing Allowance payment in their paychecks. Then they’d convert that money to South Korean won and arrange a time to meet and pay their landlord.
“We looked at this whole thing, and we said, ‘We can do it a little better,’” Kucharuk said. “That is exactly what this program is about — time and convenience.”
Under the current system, each month a Per Diem Committee would predict the exchange rate. Soldiers would get money for rent, in dollars, based on that prediction. They’d be responsible for exchanging their paycheck dollars to won, then taking those won to their landlords.
But preparing the paychecks takes about 10 days. Depending on how the exchange rate changes during those 10 days, soldiers either make or lose money on the transaction.
Soldiers may choose to continue getting their rent reimbursement this way. But now, Kucharuk said, they have two other options:
• Option one:
The finance battalion will exchange soldiers’ housing dollars into won at a “command” exchange rate, which should be just a few won less than the best rates available commercially — but about 2.5 percent higher than available at Community Bank. Then the battalion will pay landlords electronically.
The finance battalion has calculated that a captain with dependents and a rent of 3 million won would have profited $803.14 from June 2002 to April 2003 under option one. A sergeant living off-post with no dependents would have come out $323.07 ahead.
• Option two:
The finance battalion will take the exact amount of housing dollars given to a soldier out of his or her paycheck and pay the rent electronically. Any loss or gain in currency is absorbed by the government in a special Defense Department account, Kucharuk said.
Under option two, he said, “the soldier has no risk but he’s not ahead, he’s not behind.”
The automatic transfer to landlords also should help with delinquent payments, said Maj. Ike Zeitler, chief of the Area II housing division. Last month, about 18 soldiers defaulted on their rent payments, resulting in calls from the real estate agents, he said.
Sometimes soldiers are on leave or temporary duty when the rent is due, but the most common default excuse is that a spouse in the States spent the money from the paycheck, Zeitler said.
About 45 people are signed up for ARC, Zeitler said. In Area II — which encompasses Yongsan Garrison, Camp Colbern, K-16 and others — from 2,300 to 2,500 soldiers have off-post apartments, Kucharuk said.
The program requires the cooperation of landlords, who must consent to having money electronically wired to them, Zeitler said.
He’s met with local real estate agents and briefed them on the program. Kucharuk said he’s seen some resistance to the program from landlords who may prefer to be paid in cash, but many already have agreed to participate.
Chief Warrant Officer David A. MacKenzie said paying rent used to be a three-day process. Because he had no bank account in South Korea, and because automatic teller machines have withdrawal limits, he’d have to hit the ATM over two or more days to withdraw his rent money. Then he’d have to go off-post to seek a good exchange rate. The last step was making an appointment with his real estate agent, which MacKenzie said was difficult because the real estate agent frequently was out.
“It didn’t make sense, and I asked that when I got here if there’s another way to do this and they said ‘Not yet,’” said MacKenzie, who lives in Itaewon and commutes to K-16 every day.
Now, he said, the convenience of electronic payment to his landlord even outweighs any loss he might incur on the exchange rate.
“My job is more important,” MacKenzie said.