omonatheydid | Celebrities Turn Real Estate Tycoons

From left, Park Chan-ho, Ko So-young and Ryu Si-won

Many celebrities and sports stars are turning a profit with their investment in real estate. One of them is Moon Hee-jun, of the now-disbanded boy band H.O.T., who has revealed that one house he bought for W120 million is now worth W1 billion (US$1=W1,129). Moon owns several properties.

Real Estate Tycoons

Pitcher Park Chan-ho, who recently joined the Orix Buffaloes in Osaka, Japan, is one of the most successful celebrity real estate investors. He built the Park's Sports Group Building in Sinsa-dong, southern Seoul in 2005, a 13-story structure with four basement levels worth around W20 billion. The price has doubled over five years.

A seven-story building built by Actor Ryu Si-won in Daechi-dong has grown in value to W10 billion. Actress Ko So-young built a five-story building in Cheongdam-dong in 2007 which is now appraised at around W11.6 billion. And slugger Lee Seung-yop owns a building in Seongsu-dong worth W30 billion.

Reliable Assets and Tax Benefits

Ko Jun-seok of Shinhan Bank says investing in real estate is one of the most reliable ways to keep windfall profits. "Owning several homes means you have to pay a lot of tax, but you don't have to pay as much on a commercial building," says property developer Park Won-gab.

Financial security is another main reason. Park Sang-eon of U&R Consulting Group says property is not subject to fluctuation like stocks and shares. Another advantage is that investors can keep a low profile. "Stock investments must be declared publicly, but real estate ownership can be kept confidential," said Ko of Shinhan Bank.

Looking Out for Opportunities

The rules of thumb are to make use of court auctions and to invest in properties downtown. Basketball player Seo Jang-hoon and TV personality No Hong-chul both made profits from repossessed properties. Seo acquired a seven-story building in Yangjae-dong at 2.8 billion in 2000, and has made profits of over W10 billion. No purchased an 160 sq.m apartment in Apgujeong-dong at W2.2 billion, 20 percent below market price.

But footballer Park Ji-sung and figure skating queen Kim Yu-na were not so lucky in their investments. Their respective investment in a building in Yongin, Gyeonggi Province and Songdo, Incheon did not bring major profits. "Those two places are emerging business areas that have yet to be fully developed," says Seon Jong-pil of consulting company Sangga News Radar.

Source: The Chosun Ilbo